HomeMy WebLinkAboutItem 22 - Ordinance Second Reading - Commercial Cannabis Amendments Planning and Building
santa-ana.org/departments/planning-and-building
Item # 22
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
October 4, 2022
TOPIC: Ordinance Second Reading - Commercial Cannabis Amendments
AGENDA TITLE:
Ordinance Amendment No. 2022-01 – Commercial Cannabis Amendments Second
Reading
RECOMMENDED ACTIONS
1. Place on second reading and adopt Ordinance Amendment No. 2022-01 to Update
Chapters 18, 21, and 40 of the Santa Ana Municipal Code Addressing Medicinal
Cannabis Retail, Consumption Lounges and Temporary Events, Retail Facility
Relocation, Commercial Cannabis Eligible Areas, Commercial Cannabis Tax Rate
Reductions for Commercial Cannabis Retail, Cultivation, Distribution, and
Manufacturing, and Adopt Language Addressing Proposed Tax Treatment of
Microbusinesses and Shared Manufacturing, and Make Other Administrative
Amendments of a Complimentary Nature.
2. Adopt a resolution modifying various commercial cannabis retail and non-retail tax
rates.
3. Adopt a resolution modifying the medicinal cannabis retail tax rate.
4. Adopt a resolution establishing a map of commercial cannabis eligible areas in the
City, the number of annual temporary consumption events, and the community
benefit, sustainable business practices, and social equity plan template.
DISCUSSION
On September 20, 2022, the City Council considered an ordinance and accompanying
resolutions to update Chapters 18, 21, and 40 of the Santa Ana Municipal Code
addressing medicinal cannabis retail; the number of retail storefronts; termination of the
Measure BB Waitlist; consumption lounges and temporary events; retail facility relocation;
commercial cannabis eligible areas; commercial cannabis tax rate reductions for
cultivation, distribution, and manufacturing; and adopt language addressing proposed tax
treatment of microbusinesses and shared manufacturing; and other administrative
amendments of a complimentary nature. The City Council provided direction to follow
staff’s recommendation, but with the following modifications:
1. Remove language allowing five (5) additional commercial cannabis retail
businesses;
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2. Remove language allowing termination of the Measure BB Waitlist;
3. Reduce all medicinal and commercial cannabis retail taxes by one percent (1%)
and update the City Council on fiscal impacts within one year of the effective date;
4. Incorporate language codifying certain social equity measures in order to qualify
for an additional two-percent (2%) reduction in adult-use commercial cannabis
retail taxes;
5. Incorporate language codifying priority processing of commercial cannabis
consumption lounge applications for social equity retailers;
6. Require locally-sourced cannabis products and foods to be sold at temporary
consumption festivals.
7. Incorporate administrative clarifications specific to commercial cannabis eligible
areas and other minor provisions.
The ordinance and accompanying resolutions were subsequently updated to reflect these
topics, and the ordinance is included as Exhibit 1 (redlines reflecting changes at first
reading) and Exhibit 2 (clean).
ENVIRONMENTAL IMPACT
In accordance with the California Environmental Quality Act (CEQA), these actions are
exempt from further CEQA analysis pursuant to CEQA Guidelines Section 15061(b)(3),
as the proposed amendments address business activities already permitted in the City
and will not result in any significant physical effect on the environment. Because Santa
Ana is a built-out, urbanized community, and the uses permitted and regulated by the
cannabis ordinance are already allowed by the underlying zoning designations and the
development standards in Chapter 41 (Zoning) of the Santa Ana Municipal Code, the
updates to the ordinance will not lead to any cumulative or unforeseen impacts. A Notice
of Exemption, Environmental Review (ER) No. 2022-15, was filed on September 23, 2022
for these actions.
FISCAL IMPACT
The September 20, 2022 staff report included an estimated loss of revenue, ranging from
$685,000 to $1,100,000 for Fiscal Year (FY) 22-23, resulting from the proposed across
the board non-retail commercial cannabis supply-side tax rate decrease of five percent
(5%), and assuming an effective date of January 1, 2023. The midpoint of that estimated
range is $892,500. The estimate for a full year of impact in FY23-24 ranged from
$1,360,000 to $1,600,000, with a midpoint of $1,480,000.
On September 20, the City Council amended the proposed Ordinance to decrease the
retail tax rate across the board (medicinal and nonmedicinal) by one percent (1%). Actual
FY21-22 revenue for both medicinal retail and adult-use retail, along with the impact of a
one-percent (1%) decrease is as follows:
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Retail
Type
Actual
Revenue
FY21-22
Impact of 1% tax rate
decrease
FY22-23 (6 months)
Impact of 1% tax rate
decrease
FY23-24 (12 months)
Medicinal $843,780 $70,315 $140,630
Adult-
Use
$20,438,677 $1,277,417 $2,554,835
Total $1,347,732 $2,695,465
The City Council also amended the proposed Ordinance to offer a further two-percent
(2%) tax rate decrease for Qualified Social Equity Commercial Cannabis Retail Business
Operators as defined and regulated by Santa Ana Municipal Code Section 40-16. If
assumed that half of the adult-use cannabis retail businesses in the City will comply with
the social equity practices, then the potential impact of the two-percent (2%) decrease
follows:
Retail
Type
Actual
Revenue
FY21-22
Impact of 2% tax rate
decrease
50% participation
FY22-23 (6 months)
Impact of 2% tax rate
decrease
50% participation
FY23-24 (12 months)
Adult-
Use
$20,438,677 $1,277,417 $2,554,835
If all of adult-use cannabis retail businesses attain Qualified Social Equity Commercial
Adult Use Cannabis Retailer Operator status and comply with social equity practices, then
the potential impact of the decrease grows.
Retail
Type
Actual
Revenue
FY21-22
Impact of 2% tax rate
decrease
100% participation
FY22-23 (6 months)
Impact of 2% tax rate
decrease
100% participation
FY23-24 (12 months)
Adult-
Use
$20,438,677 $2,554,835 $5,109,670
These estimates do not factor-in potential tax base increases due to lounges and event
activity, for which the City has no data. In addition, regulatory process requirements may
result in the passing of time before lounges are open for business. A summary of the
combined estimated fiscal impact is as follows.
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Modification FY22-23 (6 months)FY23-24 (12 months)
Supply Side Reduction of
5%
$892,500 $1,480,000
Retail Rate Reduction of
1%
$1,347,732 $2,695,465
Qualified Social Equity
Commercial Cannabis
Retail Business Operators
(Social Equity Practices)
Adult-Use Rate Reduction
of 2%
Range of
$1,277,417 to $2,554,835
Range of
$2,554,835 to $5,109,670
Estimated Fiscal Impact
Range of
$3,517,649 to $4,795,067
Range of
$6,730,300 to $9,285,135
The City deposits commercial cannabis tax revenue into the General Fund. In compliance
with Ordinance No. NS-2959, the City then transfers two-thirds of the tax revenue
attributable to supply-side and adult-use retail, but not medicinal retail, to the Cannabis
Public Benefit Fund to pay for youth and enforcement programs.
The estimated June 30, 2023 General Fund balance available to spend is $6 million after
meeting the 18-percent reserve requirement. The estimated June 30, 2023 Cannabis
Public Benefit Fund balance available to spend is also $6 million. Therefore, at this time,
the potential loss of revenue does not necessitate FY22-23 spending plan adjustments.
As part of the FY23-24 budget process, staff will reassess revenue estimates and
available fund balance and provide recommendations accordingly, which may warrant
decreased spending plans for both youth and enforcement programs within the Cannabis
Public Benefit Fund.
EXHIBIT(S)
1. Ordinance (reflecting changes at first reading)
2. Ordinance (clean)
3. Resolution (commercial cannabis tax rates)
4. Resolution (medicinal cannabis tax rate)
5. Resolution (map of commercial cannabis eligible areas, number of annual
temporary consumption events, and community benefit, sustainable business
practices, and social equity plan template)
6. Recommended commercial cannabis tax rate adjustments table
Submitted By: Minh Thai, Executive Director of Planning and Building Agency and
Kathryn Downs, Executive Director of Finance and Management Services Agency
Approved By: Kristine Ridge, City Manager
Ordinance No. NS-XXX
Page 1 of 68
ORDINANCE NO. NS-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA READOPTING AND AMENDING CERTAIN
SECTIONS OF ARTICLE XIII OF CHAPTER 18 OF THE
SANTA ANA MUNICIPAL CODE PERTAINING TO
MEDICINAL MARIJUANA RETAIL AND CHAPTER 40 OF
THE MUNICIPAL CODE PERTAINING TO COMMERCIAL
CANNABIS BUSINESSES TO MODIFY ZONING
REQUIREMENTS; ALLOW AND REGULATE RETAIL
FACILITY RELOCATION, CANNABIS CONSUMPTION
LOUNGES, AND TEMPORARY CONSUMPTION EVENTS
AND FESTIVALS; AND AMEND BACKGROUND CHECK
AND BADGE REQUIREMENTS; AND AMENDING CERTAIN
SECTIONS OF ARTICLES XII AND XIII OF CHAPTER 21 OF
THE SANTA ANA MUNICIPAL CODE PERTAINING TO THE
TAX TREATMENT OF COMMERCIAL CANNABIS
MICROBUSINESSES AND SHARED MANUFACTURING
BUSINESSES TO REDUCE THE TAX RATES FOR
MEDICINAL CANNABIS RETAIL, COMMERCIAL
CANNABIS RETAIL, CULTIVATION, DISTRIBUTION, AND
MANUFACTURING / SHARED MANUFACTURING AND TO
ADOPT SEPARATE TAX RATE CATEGORIES AND TAX
RATES FOR COMMERCIAL CANNABIS ADULT-USE
CONSUMPTION LOUNGES, AND TEMPORARY
CONSUMPTION EVENTS AND FESTIVALS, AND FOR
QUALIFIED SOCIAL EQUITY OPERATORS
THE CITY COUNCIL OF THE CITY OF SANTA ANA HEREBY ORDAINS AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines and
declares as follows:
A. On November 4, 2014, Santa Ana voters approved Santa Ana’s Medical
Marijuana Regulatory Program ordinance (“Measure BB”) which was codified in
Chapters 18 and 21 of the Santa Ana Municipal Code. Such regulations govern
medicinal marijuana and the retail sale thereof.
B. In 2015, the Governor signed into law Senate Bill 643, Assembly Bill 266,
and Assembly Bill 243, collectively referred to as the Medical Marijuana Regulation
and Safety Act, further amended in 2016 as the Medical Cannabis Regulation and
Safety Act, which established regulations and a state licensing system for medical
cannabis cultivation, manufacturing, delivery, and dispensing.
Ordinance No. NS-XXX
Page 2 of 68
C. In November 2016, the voters of the State of California approved
Proposition 64, the California Marijuana Legalization Initiative, also known as the Adult
Use of Marijuana Act.
D. In 2017, the Governor signed into law Senate Bill 94 also known as
Medicinal and Adult-Use Cannabis Regulation and Safety Act.
E. On November 9, 2017, the City Council created Chapter 40 of the Santa
Ana Municipal Code (Ordinance No. NS-2929), allowing adult-use commercial
cannabis retail businesses in the city, and amended certain sections of Chapters 18
and 21 of the Santa Ana Municipal Code to ensure consistency with State law and
Chapter 40.
F. Since November 2014, the City of Santa Ana has permitted the retail sale
of cannabis for medicinal purposes and since January 2018 for adult-use purposes.
On March 20, 2018, the City Council adopted Ordinance NS-2941 and NS-2942,
allowing and regulating commercial cannabis testing laboratories.
G. On April 17, 2018, the City Council adopted Ordinance NS-2944 allowing
and regulating commercial cannabis cultivation, distribution, and manufacturing
activities.
H. On November 6, 2018, the voters of the City of Santa Ana approved
Measure Y (Ordinance NS-2962), establishing a tax on commercial cannabis business
activities except medicinal cannabis retail sales, which continue to be subject to taxes
under Measure BB.
I. On September 3, 2019, the City Council adopted Ordinances NS-2972 and
NS-2973 amending certain sections of chapters 18, 21, and 40 of the Santa Ana
Municipal Code allowing vertical and horizontal integration of cannabis businesses;
updating ownership transfers procedural standards and requirements, security
deposits, and various administrative processes; updating and streamlining regulatory
components; reducing cannabis testing taxes to the greater amount of one (1%)
percent of gross receipts or one and one-half ($1.50) dollars per square foot; and
adopting a canopy measurement and square footage allocation service fee.
J. The State of California continues to update its regulations on commercial
cannabis business licensing, resulting in the need for local jurisdictions to update and
amend local commercial cannabis ordinances from time to time.
K. It is the desire of the City Council to combine and unify the regulations for
medicinal cannabis retail and all other types of commercial cannabis business
activities, currently contained in Chapters 18 and 40 of the Santa Ana Municipal Code,
respectively, for clarity and cohesion.
Ordinance No. NS-XXX
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L. The City Council recognizes those entities that have remained on the
Medicinal Cannabis Waitlist pursuant to Santa Ana Municipal Code Section 40-104,
and those entities that were scored as part of the merit-based selection process in
Section 40-9.
M. Commercial cannabis businesses form an integral part of the Santa Ana
economy, contributing revenues and community benefits through business
engagement with the Santa Ana community.
N. The City Council of the City of Santa Ana intends that nothing in this article
shall be deemed to conflict with federal law as contained in the Controlled Substances
Act, nor to otherwise permit any activity that is prohibited under that Act or other
applicable law.
O. The City of Santa Ana has a compelling interest in ensuring that cannabis
is not sold, cultivated, manufactured, tested, consumed, or distributed in an illicit
manner, in protecting the public health, safety and welfare of its residents and
businesses, in preserving the peace and quiet of the neighborhoods in which these
uses may operate, and in providing access of cannabis to residents.
P. The City Council has held a duly noticed public hearing on September 20,
2022 in connection with consideration and adoption of this ordinance, during which
comments were provided by the City Council and members of the public on additional
retail storefronts, reduction of retail tax rates, community benefits and social equity,
the map of commercial cannabis eligible areas, and priority processing for commercial
cannabis consumption lounges that opt in to social equity measures.
Q. The resulting changes to this Ordinance were presented to the City Council
for second reading on October 4, 2022.
Section 2. This Ordinance is adopted pursuant to the authority granted by the
California Constitution and State law, including but not limited to: Article XI, Section 7 of
the California Constitution, the Compassionate Use Act of 1996 (California Health and
Safety Code Section 11362.5), the Medical Marijuana Program (California Health and
Safety Code Section 11362.7 et seq.), the Medical Marijuana Regulation and Safety Act
(AB 266, AB 243, and SB 643; hereafter “MMRSA”), the Adult Use of Marijuana Act
(Proposition 64), and the Medical and Adult Use Cannabis Regulation and Safety Act (SB
94; hereafter “MAUCRSA”).
Section 3. Pursuant to the California Environmental Quality Act (“CEQA”) and
the State CEQA Guidelines, the adoption of this ordinance is exempt from CEQA review
pursuant to California Code of Regulations section 15061(b)(3), which is applicable if it
can be seen with certainty that there is no possibility that the project may have a
significant effect on the environment. Santa Ana is a built-out, urbanized community, and
Ordinance No. NS-XXX
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the uses permitted and regulated by this Ordinance are already allowed by the underlying
zoning designations and the development standards in Chapter 41 (Zoning) of the Santa
Ana Municipal Code. The uses permitted and regulated by this ordinance will not lead to
any cumulative or unforeseen impacts. As a result, a Notice of Exemption will be filed
upon the adoption of this ordinance.
Section 4. All provisions of the Santa Ana Municipal Code which are repeated
herein are repeated solely in order to comply with the provisions of Section 418 of the
City Charter. Any such restatement of existing provisions of the Code is not intended,
nor shall it be interpreted, as constituting a new action or decision of the City Council, but
rather such provisions are repeated for tracking purposes only in conformance with the
Charter.
Section 5. The title of Chapter 40 of the Santa Ana Municipal Code is hereby
amended to read in its entirety as follows:
Chapter 40 - REGULATION OF COMMERCIAL CANNABIS BUSINESS
ACTIVITIES
Section 6. Article I of Chapter 40 of the Santa Ana Municipal Code is hereby
amended to read in its entirety as follows:
Sec. 40-1. Purpose, intent, and community benefits required.
A. The purpose and intent of this article is to regulate commercial cannabis business
activities, as defined in this article, in order to ensure the health, safety and welfare of
the residents of the City of Santa Ana by establishing regulations necessary for
commercial cannabis business operating in the City of Santa Ana to obtain and
maintain a Regulatory Safety Permit ("RSP"). Any commercial cannabis businesses
operating in the City of Santa Ana shall at all times be in compliance with current State
Law and this article. All commercial cannabis facilities shall operate in accordance
with the regulations in this article and with the conditions of approval associated with
the applicable zone for the parcel of real property upon which the commercial
cannabis activities are conducted. Any commercial cannabis business shall qualify for
and receive a Regulatory Safety Permit from the City of Santa Ana as provided by this
article and operate only in a zone in compliance with Santa Ana Municipal Code before
commencing with any commercial cannabis business activity. Any commercial
cannabis business without a Regulatory Safety Permit is in violation of this article. The
regulations in this article, in compliance with the Compassionate Use Act, the
Medicinal Marijuana Program Act, SB 94, AB 133, Proposition 64, and the California
Health and Safety Code (collectively referred to as "State Law") do not interfere with
the right to use adult-use cannabis or medicinal cannabis as authorized under State
Law, nor do they criminalize the possession of cannabis as authorized under State
Law.
Ordinance No. NS-XXX
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B. Any person operating a medicinal marijuana collective/cooperative (as defined in
Article II of this Chapter) as of December 14, 2017, or who has a RSP application
pending to operate a medicinal collective/cooperative, and has met all of the
requirements of Article II, shall be allowed to apply for a Regulatory Safety Permit for
the sale of Adult-Use cannabis.
C. Community Benefits, Sustainable Business Practices, and Social Equity Plan
Required.
1. Effective January 1, 2024, all commercial cannabis businesses operating in the
City shall be required to provide community benefits through a Community
Benefits, Sustainable Business Practices, and Social Equity Plan (“Plan”) that
promotes health and sustainability of the community in a format acceptable by the
Executive Director of the Planning and Building Agency or his or her designee as
reviewed and verified from time to time as a component of issuance of a regulatory
safety permit (RSP). By January 1, 2025, all such Plans shall contain provisions
for social equity obligations, as per the approved format established by the City.
2. The Plan shall document each of the business’s commitment to local hiring, local
sourcing, community engagement and contributions, sustainable business
practices, and consideration of social equity goals through paying prevailing
wages, hiring from disadvantaged communities, supporting local non-profit
organizations (NPOs), and job and skills training. The Plan shall quantify the value
of each commitment therein.
3. Documentation of fulfillment of the aforementioned Plan shall be submitted to the
Code Enforcement Division on an annual basis, including as part of a renewal
application for an RSP during the annual renewal process. Said documentation
shall detail said business’s satisfaction of its commitments and shall be evaluated
for satisfaction by the Executive Director of the Planning and Building Agency or
his or her designee. Failure to provide the requested documentation shall result in
a suspension or revocation of an RSP, delay or denial of an RSP renewal
application, as applicable.
4. The Planning and Building Agency may enforce these provisions pursuant to
Section 40-12 of this Chapter, including issuance of warnings, citations, and fines
as authorized by the Santa Ana Municipal Code, and suspension and revocation,
to enforce the commitments in each Plan.
5. Commercial cannabis retailers exempt. The Community Benefits, Sustainable
Business Practices, and Social Equity Plan requirements of Section 40-1(C) shall
not apply to those commercial cannabis retailers in compliance with Section 40-16
of this Chapter.
Sec. 40-2. Definitions.
Ordinance No. NS-XXX
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The definitions are incorporated herein as fully set forth and are applicable to this article.
All definitions are intended to comply with those set forth by the State of California for all
commercial cannabis business activities.
1. "Applicant" means a person who is required to file an application for a permit under
this article, including an individual owner, managing partner, officer of a corporation,
or any other operator, manager, employee, or agent of a commercial cannabis
business. "Adult-Use" means cannabis or cannabis products that are intended to be
used for non-medicinal purposes by a person twenty-one (21) years of age or older.
3. "Adult-Use Cannabis Retailer Operating Agreement" or "Operating Agreement"
means the agreement entered into by and between the City and the commercial
cannabis business operator which will specify terms for local hiring and sourcing,
community benefit plans, and fees to compensate for authorized impacts on City
services.
4. "Adult-Use cannabis retail business" means an Adult-Use retail business that obtains
a Regulatory Safety Permit and engages in the delivery or sale of Adult-Use cannabis,
or an Adult-Use cannabis product, except as related Business and Professions Code
Section 19319, or Health and Safety Code Sections 11362.1 through 11362.45, as
amended from time to time, excepting medicinal cannabis retail.
5. "Authorized City of Santa Ana representative" means any police officer, city employee,
contractor or agent of the city designated by the director of any city department which
has the authority and responsibility to enforce provisions as set forth in this article.
6. "Business owner" means any of the following:
a) A person with an aggregate ownership interest of twenty (20) percent or more in
the person applying for a license or a licensee, unless the interest is solely a
security, lien, or encumbrance.
b) The chief executive officer of a nonprofit or other entity.
c) A member of the board of directors of a nonprofit.
d) An individual who will be participating in the direction, control, or management of
the person applying for a license.
7. "Cannabis" or "cannabis product" means all parts of the Cannabis sativa Linnaeus,
Cannabis Indica, or Cannabis Ruderalis, whether growing or not; the seeds thereof;
the resin, whether crude or purified, extracted from any part of the plant; and every
compound, manufacture, salt, derivative, mixture, or preparation of the plant, its
seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified,
obtained from marijuana. "Cannabis" also means marijuana as defined by Section
11018 of the California Health and Safety Code as enacted by Chapter 14017 of the
Statutes of 1972. "Cannabis" does not include the mature stalks of the plant, fiber
Ordinance No. NS-XXX
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produced from the stalks, oil or cake made from the seeds of the plant, any other
compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks
(except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the
plant which is incapable of germination. For the purpose of this chapter, "cannabis"
does not mean industrial hemp as that term is defined by Section 81000 of the
California Food and Agricultural Code or Section 11018.5 of the California Health and
Safety Code.
8. "City" means the City of Santa Ana, a charter city and municipal corporation.
9. "Commercial cannabis activity" means the cultivation, possession, manufacture,
distribution, processing, storing, laboratory testing, packaging, labeling,
transportation, delivery or sale of cannabis and cannabis products as provided for this
Chapter. Permitted commercial cannabis activities are listed in Land Use Table 40-5
of this Chapter and are allowed in the Commercial Cannabis Eligible Areas Map as
adopted and modified from time to time by resolution of the City Council.
10. "Commercial cannabis business" means a business that obtains a Regulatory Safety
Permit and engages in the cultivation, possession, manufacture, processing, storing,
laboratory testing, labeling, distribution, delivery, or sale of adult-use cannabis,
medicinal cannabis or an adult-use cannabis or medicinal cannabis product, except
as related Business and Professions Code Section 19319, or Health and Safety Code
Sections 11362.1 through 11362.45, as amended from time to time.
11. "Cultivation" means to plant, grow, harvest, dry, cure, grade or trim cannabis, as
defined by California Business and Professional Code Section 26001, as amended
from time to time.
12. "Customer" means a natural person twenty-one (21) years of age or over.
13. "Delivery" means the commercial transfer of cannabis or cannabis products from a
retail cannabis business to a customer up to an amount determined to be authorized
by the State of California, or any of its departments or divisions. "Delivery" also
includes the use by a retail cannabis business of any technology platform owned,
controlled, and/or licensed by the retail cannabis business, or independently licensed
by the State of California under the State law (as amended from time to time), that
enables anyone to arrange for or facilitate the commercial transfer by a licensed retail
cannabis business of cannabis or cannabis products. For the purposes of this article,
"delivery" does not include distribution or purchase of cannabis from a licensed
cultivator, and cannabis products from a licensed manufacturer, for sale to a licensed
cannabis retail business.
14. "Delivery employee" means an individual employed by a licensed retail cannabis
business who delivers cannabis goods from the permitted retail premises to a
customer at a physical address.
Ordinance No. NS-XXX
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15. "Display" means cannabis goods that are stored in the licensed retail business during
the hours of operation.
16. "Distribution" means the procurement, sale, and transport of cannabis or cannabis
products between Licensees.
17. "Edible cannabis product" means manufactured cannabis that is intended to be used,
in whole or in part, for consumption. An edible cannabis product is not considered food
as defined by Section 109935 of the California Health and Safety Code or a drug as
defined by Section 109925 of the California Health and Safety Code.
18. "Free sample" means any amount of commercial cannabis goods provided to a
purchaser of cannabis without cost or payment or exchange of any other thing of
value.
19. "Labor Peace Agreement" means a legally binding agreement between an employer
and a bona fide labor organization in which the employer agrees to remain neutral in
the event its employees wish to unionize, as described more fully in Business and
Professions Code 26001(z), as amended from time to time. For the purposes of this
Chapter, a "Bona Fide Labor Organization" means any organization or any agency or
employee representation committee or any local unit thereof in which employees
participate, and exists for the purpose, in whole or in part, of working with employers
concerning grievances, labor disputes, wages, hours of employment or conditions of
work, which labor organization is not found to be or to have been financed in whole or
in part, interfered with, dominated or controlled by the employer or any employer
association.
20. "License/Licensee" means a license issued by the State and includes both an A-
license (Adult-Use) and an M-license (Medicinal), and the holder of such license.
21. "Manufacturer" means a Licensee that conducts the production, preparation,
propagation, or compounding of cannabis or cannabis products either directly or
indirectly or by extraction methods, or independently by means of chemical synthesis,
or by a combination of extraction and chemical synthesis at a fixed location that
packages or repackages cannabis or cannabis products or labels or relabels its
container.
22. "Manufacturing" means all aspects of the extraction and/or infusion processes,
including processing, preparing, holding, storing, packaging, or labeling of cannabis
products. Manufacturing also includes any processing, preparing, propagating,
holding, or storing of components and ingredients.
22.5. “Shared Manufacturing” means manufacturers who work in a shared-use
facility. Shared-use facilities are places where multiple shared manufacturers
engaging in cannabis extraction using butter or cooking oils, infusion, and/or
packaging and labeling rotate on a schedule and share space and equipment.
Ordinance No. NS-XXX
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All or part of manufacturing premises may be registered as a shared-use
facility.
23 "Medicinal cannabis patient" is a person whose physician has recommended the use
of cannabis to treat a serious illness, including cancer, anorexia, AIDS, chronic pain,
spasticity, glaucoma, arthritis, migraine, or any other illness for which cannabis
provides relief.
24. "Microbusiness" means a commercial cannabis business that cultivates cannabis on
an area less than ten thousand (10,000) square feet and acts as a licensed
distributor, Level 1 manufacturer, and retailer.
25. "Nursery" means a commercial cannabis Licensee that produces only clones,
immature plants, seeds, and other agricultural products used specifically for the
planting, propagation, and cultivation of cannabis.
26. "Medicinal/medical cannabis" or "Medicinal cannabis product," means cannabis or a
product containing cannabis, including, but not limited to, concentrates, and
extractions, intended to be sold for use by medicinal cannabis patients in California
pursuant to the Compassionate Use Act of 1996, found at Section 11362.5 of the
California Health and Safety Code. Medicinal cannabis retail is regulated by this
Chapter 18 and Chapter 21 of the Santa Ana Municipal Code.
27. "Outdoor cultivation" means the cultivation of cannabis outside a permanent enclosed
building. Outdoor cultivation is prohibited within the City of Santa Ana.
28. "Ownership interest" means an interest held by a person who is an owner as defined
by State of California commercial cannabis regulations or who has a financial interest
in the commercial cannabis business of twenty (20) percent or more.
29. "Package" and "Packaging" means any container or wrapper that may be used for
enclosing or containing any cannabis goods for final retail sale. "Package" and
"packaging" does not include a shipping container or outer wrapping used solely for
the transport of cannabis goods in bulk quantity to a Licensee.
30. "Person" includes any individual, firm, partnership, joint venture, association,
corporation, limited liability company, estate, trust, business trust, receiver, syndicate,
or any other group or combination acting as a unit, and the plural as well as the
singular.
31. "Premises" means the designated structure(s) and land specified in the application
that are in possession of and used by the applicant or Licensee to conduct the
commercial cannabis activity.
32. "Primary Caregiver" has the same meaning as that term is defined in Section 11362.7
of the Health and Safety Code, as amended from time to time.
Ordinance No. NS-XXX
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33. "Private Residence" shall have the same definition as that contained in Health and
Safety Code section 11362.2(5) and also means a lawfully established structure,
suitable for human occupancy as required by section 17922 and 17958 of the
California Health and Safety Code. A recreational vehicle does not constitute a lawfully
established structure for the purposes of this article.
34. "Private security officer" has the same meaning as that term as defined in the State of
California Business and Professions Code section 7574.01.
35. "Purchase" means obtaining cannabis goods in exchange for consideration.
36. "Purchaser" means a person who is engaged in a transaction with a Licensee for
purposes of obtaining cannabis goods.
37. "Qualified patient" has the same meaning as such term is defined in California Health
and Safety Code section 11362.5, as amended from time to time, and means a person
whose physician has recommended the use of cannabis to treat a serious illness,
including cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis,
migraine, or any other illness for which cannabis provides relief.
38. "Responsible person" means any of the following:
a) A person who causes a Code violation to occur.
b) A person who maintains or allows a Code violation to continue by way of his or her
action or failure to act.
c) A person whose agent, employee, or independent contractor causes a Code
violation by its failure to act.
d) A person who is the owner of, and/or a person who is a lessee or sub lessee with
the current right of possession of, real property where property-related Code
violation occurs.
e) A person who is the on-site manager of a business who normally works daily at
the site when the business is open and is responsible for the activities of such
premises.
39. "Retail business" means a premises where cannabis, cannabis products, or devices
for the use of cannabis or cannabis products are offered, either individually or in any
combination for retail sale, including an establishment that delivers cannabis or
cannabis products as part of a retail sale.
39.1. For the purposes of this Chapter, “Consumption lounge” means a facility for
the onsite retail sale and consumption or smoking of cannabis or cannabis
products that is a licensed premises that is a physical location from which
commercial cannabis activities are conducted, as defined by Business and
Professions Code Section 26070 as amended from time to time. For the purposes
Ordinance No. NS-XXX
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of this definition, “consumption” and “smoking” shall also include inhalation, vaping,
and/or ingestion.
39.2. For the purposes of this Chapter, “Temporary Consumption Event” shall
mean an event organized by a commercial cannabis retail business where people
can sell and consume cannabis subject to full compliance with local, County, and
State licensing requirements.
39.3. For the purposes of this Chapter, “Temporary Consumption Festival” shall
mean a large-scale event organized and held by the City of Santa Ana where
people can sell and consume cannabis subject to full compliance with local,
County, and State licensing requirements.
39.4. For the purposes of this Chapter, “Commercial Cannabis Adult-Use Retail
Business” shall mean a retail business operation which engages in the sale of
commercial adult-use cannabis pursuant to a State issued A-license, and that does
not engage in the sale of medicinal cannabis.
39.5 For the purposes of this Chapter, “Commercial Cannabis Medicinal Retail
Business” shall mean a retail business operation which engages in the sale of
medicinal cannabis pursuant to a State issued M-license (Medicinal), and that does
not engage in the sale of commercial adult-use cannabis.
40. "Regulatory Safety Permit (RSP)" means a permit issued by the City pursuant to this
article to a commercial cannabis business.
41. "Sell," "sale," and "to sell" include any transaction whereby, for any consideration, title
to cannabis is transferred from one (1) person to another, and includes the delivery of
cannabis goods pursuant to an order placed for the purchase of the same and
soliciting or receiving an order for the same, but does not include the return of
cannabis goods by a Licensee to the Licensee from whom such cannabis goods were
purchased.
42. "State" means the State of California.
43. "Testing Facility" or "Testing Laboratory" defined in the Business and Professions
Code section 26001, as amended from time to time, means a laboratory, facility, or
entity in the State that offers or performs tests of cannabis or cannabis products and
that is both of the following:
a) Accredited by an accrediting body that is independent from all other persons
involved in commercial cannabis activity in the State; and,
b) Licensed by the Bureau of Cannabis Control.
44. "Wholesale" means the sale of cannabis goods to a distributor for resale to one (1) or
more retail cannabis businesses.
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Sec. 40-3. Compliance with state and local licensing requirements.
A. Any commercial cannabis business as defined by the State of California and the
City of Santa Ana shall operate in conformance with all regulations and standards
set forth in this article to assure that the operations of any commercial cannabis
business as defined by the State of California and allowed by the City of Santa
Ana are in compliance with local and State law and are established to mitigate any
adverse secondary effects from its operations.
B. Commercial cannabis businesses shall be required to obtain a Regulatory Safety
Permit (RSP) from the City of Santa Ana and a State license, and shall comply
with any applicable State licensing requirements, such as operational standards
and locational criteria.
C. Co-location of commercial cannabis businesses proposed on any one (1) site shall
occur only if authorized by the State and the City of Santa Ana and only if allowed
pursuant to the City's Zoning Code. Any commercial cannabis activity not
specifically permitted by this article is prohibited.
Sec. 40-4. Maximum number of regulatory safety permits for commercial cannabis
retail businesses.
A. In no case shall the maximum number of regulatory safety permits for commercial
cannabis retail businesses be less than thirty (30).
B. All commercial cannabis retail businesses may sell medicinal and adult-use
cannabis.
Sec. 40-5. Zoning compliance and regulatory safety permit requirements.
Commercial cannabis activities are expressly prohibited in all zones in the City of Santa
Ana; however, specific commercial cannabis businesses are permitted in the Light
Industrial (M1), Heavy Industrial (M2), and select Specific Development and Professional
zoning districts of an industrial nature in areas as specified on the Commercial Cannabis
Eligible Areas Map as adopted by resolution of the City Council. The allowed current
permit types are described in Table 40-5 and the City of Santa Ana's zoning ordinance
as a requisite for obtaining a Regulatory Safety Permit. No commercial cannabis business
may operate in the City of Santa Ana without a Regulatory Safety Permit.
This Land Use Table 40-5 shall be used to determine whether a commercial cannabis
business is permitted — "P," or not permitted — "X." Any commercial cannabis business
in the City of Santa Ana shall also operate in compliance with the City's zoning ordinance.
If a Zoning District is not listed in the Land Use Table in this section, then the use is
expressly not permitted.
Ordinance No. NS-XXX
Page 13 of 68
City of Santa Ana Municipal Code Table 40-5
Commercial
Cannabis
Business
Activities Use
Type
Land Use
Classification
Indication on the
Commercial
Cannabis Eligible
Areas Map
Regulatory
Safety
Permit
Required
Cultivator/Nursery Indoor only P Yes
Cultivator/Nursery Outdoor or mixed-
light X NA
Cultivator/Nursery
Indoor— Type 5A
(Cultivation;
Indoor; Large), as
defined and
amended by the
State, permitted
beginning
January 1, 2023)
P Yes
Manufacturing
(including “shared
manufacturing”)
Manufacturing P Yes
Retail Medicinal Retail P Yes
Retail Adult-Use Retail P Yes
Testing Laboratory
Adult-Use and/or
Medicinal
Industrial
P Yes
Distribution Freight/Transport P Yes
Microbusiness
Cultivation/Retail/
Manufacturing/
Distribution
P – only as part of
a vertically-
integrated/co-
located business
in full
conformance
with the
requirements of
this Chapter.
Yes
Ordinance No. NS-XXX
Page 14 of 68
Consumption
Lounge
Consumption
Lounge, as an
ancillary
component to
Retail
P Yes
Sec. 40-6. Location and Separation requirements for all commercial cannabis retail
businesses.
A. Commercial cannabis businesses may only operate within an area in accordance with
the Commercial Cannabis Eligible Areas Map as adopted by resolution of the City
Council.
B. No commercial cannabis retail business shall be located within five hundred (500) feet
of another retail cannabis business, as measured from primary entrance of the
business to primary entrance of the other business.
C. No commercial cannabis business shall be located within one thousand (1,000) feet
of any:
1. School (K-12) as defined by Section 11362.768 of the Health and Safety Code,
as indicated by the Commercial Cannabis Eligible Areas Map; or
2. Park, as indicated by the Commercial Cannabis Eligible Areas Map; or
3. Residential zoning district, as indicated by the Commercial Cannabis Eligible
Areas Map.
Sec. 40-7. Relocation of commercial cannabis retail businesses (medicinal and/or
adult-use).
(a) Relocation of an existing medical marijuana collective, medical marijuana cooperative,
and/or adult-use cannabis retail business as defined in this Chapter is permitted within
the City of Santa Ana subject to the following:
(1) The medical marijuana collective, medical marijuana cooperative, and/or adult-use
cannabis retail business must hold a valid RSP, business license, and the
appropriate State commercial cannabis license, and be operating with all required
permits and licenses. For the purposes of this sub-section, “operating” means a
medical marijuana collective, medical marijuana cooperative, and/or adult-use
cannabis retail business currently holding a valid RSP and Santa Ana business
license.
(2) The existing RSP holder and existing location must be in good standing, including
but not limited to full compliance with all requirements of the Santa Ana Municipal
Code, no active code enforcement and/or building safety violations, no violations
Ordinance No. NS-XXX
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of regulations imposed by the State of California and County of Orange, and have
no outstanding business license fees and taxes, except those subject to and
performing under a Finance and Management Services Agency approved
payment plan agreement.
(3) An application to relocate to a proposed new location may be filed after October 1,
2023.
(4) The proposed new location of the medical marijuana collective, medical marijuana
cooperative, and/or adult-use cannabis retail business is in full compliance with the
zoning and separation requirements for commercial cannabis retail businesses as
outlined in Sections 40-5 and 40-6 of the Santa Ana Municipal Code.
(5) The proposed new location of the medical marijuana collective, medical marijuana
cooperative, and/or adult-use cannabis retail business must comply with
separation requirements of this Chapter except that the proposed new location
must also satisfy said separation requirements from any location identified on the
Qualified Registration Applicant List (“Waitlist”), as defined in Section 40-104 of
this chapter and from any entity selected during the City’s evaluative process in
2018.
(b) Any operating medical marijuana collective, medical marijuana cooperative, and/or
adult-use cannabis retail business wishing to relocate shall be required to
concurrently: (1) File an application for an RSP by and (2) Submit all required
construction plans for plan check by the City, subject to the requirements of this
Chapter and other applicable chapters of the Santa Ana Municipal Code, and operate
within 180 days of construction permit issuance. An extension may be issued for a
period of time as may be reasonably required to affect upgrades, modifications,
repairs, or other property issue mitigations as approved by the Director of Planning
and Building or his or her designee.
(c) Upon issuance of the RSP for the new location, the previous location’s RSP and
certificate of occupancy immediately becomes null and void and the location must
cease to operate.
(d) Within 60 days of issuance of the RSP for the new location, the applicant must provide
the City documentation demonstrating that any State-issued commercial cannabis
retailer license associated with the previous location has been cancelled, rescinded,
or updated to reflect the new location.
Sec. 40-8. General provisions for commercial cannabis activities in the City of
Santa Ana.
1. Regulatory Safety Permit Required.
a. Each commercial cannabis business shall obtain a Regulatory Safety Permit (RSP)
specific to the business activity or activities defined by the State pertaining to that
Ordinance No. NS-XXX
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activity. The only allowed current activity types pursuant to this article are for
commercial cannabis retail sales and cultivation, distribution, manufacturing, and
testing laboratories/facilities. Co-location is permitted pursuant to Section 40-9.3.1.
b. It shall be unlawful for any person, as defined by this ordinance, to engage in, conduct
or carry on, in or upon any premises within the City of Santa Ana any commercial
cannabis business without a RSP. A commercial cannabis business shall register and
obtain a RSP from the City of Santa Ana prior to operation. The RSP applicant shall
pay an annual non-refundable application fee in an amount established by the City
Council.
c. A copy of the RSP shall be displayed at all times in a place visible to the public.
d. A RSP shall be valid for a period of one (1) year from the date of issuance, unless
sooner revoked. No permit granted herein shall confer any vested right to any person
or business for more than the above-referenced period.
2. Maintenance of Records and Reporting. All records shall be maintained by the
commercial cannabis business for a period of five (5) years and shall be made
available by the commercial cannabis business to an authorized City of Santa Ana
representative upon request. If they are not produced as requested, the City may seek
a search warrant, subpoena, or court order. In addition to all other formats that the
commercial cannabis business may maintain, these records shall be stored by the
business at the location in a printed format in a fireproof safe or filing cabinet. Any
loss, damage or destruction of the records shall be reported to the Police Department
within twenty-four (24) hours of the loss, destruction or damage.
a. The business shall obtain and maintain a valid Seller's Permit from the California
Department of Tax and Fee Administration (CDTFA).
b. Financial records include, but are not limited to: bank statements, sales invoices,
receipts, tax records, and all records required by the CDTFA under Title 18
California Code of Regulations section 1968.
c. Personnel records, including each employee's full name, address, phone number,
social security, or individual tax payer identification number, date of beginning
employment, and date of termination of employment if applicable.
d. Training records, including, but not limited to, the content of the training provided
and the names of the employees that received the training.
e. Contracts with other businesses regarding commercial cannabis business activity.
f. Permits, licenses, and other local authorizations to conduct the commercial
cannabis business activity.
g. Security records, as outlined in the Operational Standards for All Commercial
Cannabis Business Activities.
Ordinance No. NS-XXX
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h. Proof of building ownership or landlord letter acknowledging business type.
i. Proof of insurance.
3. Operational Standards for All Commercial Cannabis Business Activities.
a. The location, interior and exterior, shall be monitored at all times by web-based
closed circuit television for security purposes. The camera and recording system
must be of adequate quality, color rendition and resolution to allow the ready
identification of any individual committing a crime anywhere on or adjacent to the
location. The recordings shall be maintained unaltered in a secure location for a
period of not less than ninety (90) days. The Police Department may request the
recordings in connection with an investigation.
b. All controlled access areas, security rooms and all points of ingress/egress to
limited access areas and all point of sale (POS) areas shall have fixed camera
coverage capable of identifying activity occurring within a minimum of twenty (20)
feet.
c. The surveillance system storage device or cameras shall be transmission control
protocol/TCP capable of being accessed through the internet by the police
department or their designee on request.
d. If applicable, the applicant shall conduct and pay for any required CEQA reviews
and analyses, and pay for all costs, including those of the City, associated with
project review under CEQA.
e. Commercial cannabis businesses shall create and maintain an active account
within the State's track and trace system prior to commencing any commercial
cannabis retail activity. In the event of system failure, the business shall keep a
hard copy record and transfer the information to the track and trace system within
twenty-four (24) hours of the system being available.
f. No physical modification of the licensed premises is allowed without written prior
permission by the City of Santa Ana and payment of any additional fees required
by the City.
g. Commercial cannabis business businesses shall provide adequate off-street
parking and comply with the City of Santa Ana Municipal Code parking
requirements in order to service customers without causing negative impact.
h. The commercial cannabis business shall provide adequate disabled access
parking per the requirements in the California Building Code.
i. The commercial cannabis business shall minimize nuisances such as trash, litter,
and graffiti.
Ordinance No. NS-XXX
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j. Any and all signage, packaging, and facilities shall not be "attractive," as it is
defined by the State, to minors.
k. Commercial cannabis business facilities shall be required to provide an air
treatment system that ensures off-site odors shall not result from its operations.
This requirement at a minimum means that the facility shall be designed to provide
sufficient odor absorbing ventilation and exhaust systems so that any odor
generated inside the location is not detected outside the building, in any adjacent
tenant suites, on adjacent properties or public rights-of-way, or within any other
unit located within the same building as the facility if the use occupies only a portion
of a building.
l. The commercial cannabis business shall comply with all State regulations
regarding:
i. Testing, labeling and storage of all cannabis products.
ii. Use of appropriate weighing devices.
iii. Electrical and plumbing regulations subject to periodic and unannounced
inspections to ensure compliance.
iv. State deadlines for applying for a State license and receiving a State license
within six (6) months after the date the State begins issuing licenses. This may
be waived if the State has longer delays in issuing licenses of the type the
commercial cannabis business seeks.
m. The commercial cannabis business shall maintain a comprehensive general
liability combined single occurrence insurance policy issued by an "A" rated
insurance carrier in an amount no less than two million dollars ($2,000,000.00),
with primary coverage, naming the City of Santa Ana as additional insured.
n. No free samples of any cannabis or cannabis product may be distributed at any
time.
o. Badges shall be worn by any individuals as required to do so pursuant to the
California Code of Regulations, Title 4, Section 15043 and California Business and
Professions Code Section 7582.28, as amended from time to time.
p. All private security officers acting for or employed by a commercial cannabis
business shall be licensed by the State and issued a security/patrol services
business license from the City of Santa Ana.
q. The commercial cannabis business shall have a centrally monitored fire and
burglar alarm system which shall include all perimeter entry points and perimeter
windows and the building or portion of the building where the business is located
shall contain a fireproof safe or fireproof filing cabinet and include a safety and
security plan.
Ordinance No. NS-XXX
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r. The commercial cannabis business shall ensure a licensed alarm company
operator or one (1) or more of its registered alarm agents installs, maintains,
monitors and responds to the alarm system. The alarm company shall obtain a
City of Santa Ana business license.
s. The commercial cannabis business shall provide the name and phone number of
an on-site staff person to the police department and the Code Enforcement
Division of the Planning and Building Agency for notification if there are operational
problems with the establishment.
t. The commercial cannabis business must obtain and maintain a valid City business
license at all times as a condition for receiving, renewing, and maintaining its
regulatory safety permit.
u. Occupancy shall not exceed that required under the Uniform Building Code and
Uniform Fire Code, and the maximum occupancy load shall be posted at the main
entrance.
v. For any commercial cannabis business with two (2) or more employees, the
business owner shall attest that he/she has entered into a labor peace agreement
and provide a copy of the agreement to the City.
w. Any individual with an ownership interest shall complete a live scan and submit the
results to the City.
x. All signage for the commercial cannabis business must comply with Article XI of
Chapter 41 of the Santa Ana Municipal Code.
y. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during the business's regular business hours.
4. Additional Operational Standards for Cannabis Retail Business.
a. At all times the cannabis retail business is open, it shall provide at least one (1)
private security guard who is licensed, possesses a valid Department of Consumer
Affairs "security guard card," and has a valid business license from the City of
Santa Ana as a security/private patrol service.
b. The private security guard and retail cannabis business personnel shall monitor
the site and the immediate vicinity of the site to ensure that patrons immediately
leave the site and do not consume cannabis in the vicinity of the retail business or
on the property or in the parking lot.
c. Exterior signage shall comply with Article XI of Chapter 41 of the Santa Ana
Municipal Code. Interior signage or advertising may not be visible from the exterior.
Retail cannabis businesses must comply with the advertising and marketing
provisions of Business and Professions Code §§ 26150—26155.
Ordinance No. NS-XXX
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d. There shall be no on-site sales of alcohol or tobacco products, (excluding rolling
papers and lighters) and no on-site consumption of alcohol or tobacco by patrons.
Food may not be consumed on site, except as permitted by Section 40-8 (10) of
this chapter.
e. Hours of operation shall be limited to: 7:00 a.m. to 11:00 p.m. daily. No licensed
retail business shall be open to the public between the hours of 11:01 p.m. and
6:59 a.m. of any day.
f. The cannabis retail business shall notify patrons of the following both verbally and
through posting of a sign in a conspicuous location:
i. Secondary sale, barter or distribution of adult-use cannabis is a crime and can
lead to arrest.
ii. That loitering on and around the retail site is prohibited by California Penal
Code § 647(e) and that patrons must immediately leave the site and not
consume cannabis in the vicinity of the retail site or on the property or in the
parking lot.
iii. A warning that patrons and/or employees may be subject to prosecution under
federal cannabis laws.
iv. That the use of cannabis may impair a person's ability to drive a motor vehicle
or operate machinery.
g. No one under the age of twenty-one (21) shall be allowed to enter a cannabis retail
facility unless the licensed cannabis facility holds a medicinal use cannabis RSP
issued by the City and retail license issued by the State, and the licensed premises
for the cannabis license and medicinal cannabis license are the same in
accordance with Business and Professions Code section 26140.
h. If non-cannabis food is distributed, the retail business shall comply with all relevant
State laws, County and City ordinances pertaining to the preparation, distribution
and sale of food.
i. All cannabis retail businesses shall establish and implement a program to
incentivize the recycling of used containers. Failure to establish and implement a
program to incentivize the recycling of used containers will result in a violation of
the terms of the required commercial cannabis Operating Agreement requiring
sustainable building or business practices.
j. Cannabis retail businesses shall also record on the video surveillance system
point-of-sale areas and areas where cannabis goods are displayed for sale.
k. Adequate signage shall clearly state who has inspected any cannabis product for
pesticides, or other regulated contaminants, distributed at this location.
Ordinance No. NS-XXX
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l. Shipments of cannabis goods may only be accepted during regular business
hours.
m. Inventory shall be secured using a lockable storage system during non-business
hours.
n. No cannabis product shall be visible from the exterior of the business.
o. All required labelling shall be maintained on all product, as required by State law,
at all times.
p. Educational tours of retail cannabis businesses shall be allowed.
q. A permitted commercial cannabis retail business shall have one hundred eighty
(180) days after construction permit issuance by the City of Santa Ana to operate.
A permitted commercial cannabis retail business that ceases to operate for more
than ninety (90) calendar days shall be deemed "abandoned" and the permit shall
be forfeited. A permitted commercial cannabis business may temporarily suspend
operations for a period of time as may be reasonably required to affect upgrades,
modifications, repairs, or other property issue mitigations as approved by the
Director of Planning and Building or his or her designee. For the purposes of this
section, "operate" shall mean that the gross receipts fees charged for the business
exceed the fee per square foot calculations by the end of the one hundred eighty
(180) day period. A pending commercial cannabis retail business shall be required
to concurrently: (1) File an application for an RSP and (2) Obtain all required
construction permits for the facility from the City within six months of the effective
date of this ordinance, subject to the requirements of this Chapter and other
applicable chapters of the Santa Ana Municipal Code, and open within 180 days
of construction permit issuance. An extension may be issued for a period of time
as may be reasonably required to affect upgrades, modifications, repairs, or other
property issue mitigations as approved by the Director of Planning and Building or
his or her designee. Failure to satisfy these requirements by that deadline will
disqualify the applicant from the RSP Eligibility List and the Waitlist described in
Article II of this Chapter. Relocation is permitted pursuant to Section 40-7 of this
Chapter.
r. A licensee that is authorized to conduct medicinal and/or adult-use retail sales may
donate cannabis or cannabis products and the use of equipment in compliance
with any State compassionate use, equity, or other similar program in accordance
with Section 26071 to the Business and Professions Code.
s. Subject to approval of an operations plan by the Executive Director of the Planning
and Building Agency, the opening of cannabis packages and demonstration of
cannabis products at a commercial cannabis retail business is permitted for
educational purposes without establishment of a consumption lounge, subject to
the following requirements:
Ordinance No. NS-XXX
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i. The maximum amount of cannabis product which may be consumed in such
a setting is one-half (1/2) of one gram.
ii. There shall be a separate room dedicated for such purposes. Activities in
said dedicated room shall be limited to the opening of packages, use
demonstration, and consumption for consumer education purposes, by the
consumer only.
iii. The dedicated room shall be limited to 100 square feet maximum size, shall
be included as part of the facility’s ventilation and odor control methods, and
shall be monitored using video surveillance systems.
iv. Such activities shall be subject to an administrative permit issued by the
Planning and Building Agency. As part of the permit application, the
applicant shall include administrative policies ensuring the opening of
packages, demonstration and education, and limited consumption are
restricted to the room and for ensuring such activities do not pose a threat
to the health, safety, and welfare of other consumers, employees of the
business, and visitors to the surrounding area.
5. Additional Operational Standards for Commercial Cannabis Retail Delivery Services.
a. Commercial cannabis retail deliveries may be made only from a commercial
cannabis retail business permitted by the City in compliance with this article, and
in compliance with all State regulations.
b. All employees who deliver cannabis shall have valid identification and a copy of
the commercial cannabis retail business' Regulatory Safety Permit and State
license at all times while making deliveries.
c. All commercial cannabis retail businesses shall maintain proof of vehicle insurance
for any and all vehicles being used to transport cannabis goods as required by
State law.
d. Deliveries may only take place during normal business hours of the commercial
cannabis retail business.
e. During delivery, the delivery employee shall maintain a physical or electronic copy
of the delivery request and shall make it available upon request by the licensing
authority and law enforcement officers. The delivery request documentation shall
comply with State law.
f. A licensed delivery employee shall not leave the State of California while
possessing cannabis products.
Ordinance No. NS-XXX
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g. A commercial cannabis retail business shall maintain a list of all deliveries,
including the address delivered to, the amount and type of product delivered, and
any other information required by the State.
h. A manifest with all information required in this section shall accompany any
delivery person at all times during the delivery process and delivery hours.
i. Any delivery method shall be made in compliance with State law, as amended,
including use of a vehicle that has a dedicated GPS device for identifying the
location of the vehicle (cell phones and tablets are not sufficient).
j. Each delivery request shall have a receipt prepared by the commercial cannabis
retail business with the following information:
i. Name and address of the commercial cannabis retail business.
ii. The name of the employee who delivered the order.
iii. The date and time the delivery request was made.
iv. The complete delivery addresses.
v. A detailed description of the cannabis goods requested for delivery including
the weight or volume, or any accurate measure of the amount of cannabis
goods requested.
vi. The total amount paid for the delivery including any fees or taxes.
k. At the time of the delivery, the date and time delivery was made, and the signature
of the person who received the delivery.
l. No cannabis delivery vehicle shall display signs, decals or any other form of
advertisement with the exception of a maximum four-inch by four-inch decal.
m. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during regular business hours.
6. Additional Operational Standards for Commercial Cannabis Testing Facilities or
Laboratories.
a. A licensed cannabis testing facility or laboratory business, its owners and
employees may not hold an interest in any other cannabis business except another
testing laboratory business.
b. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during the business's regular business hours.
c. Educational tours of cannabis testing facility/laboratory businesses shall be
allowed.
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7. Additional Operational Standards for Commercial Cannabis Manufacturing Facilities.
a. A licensed commercial cannabis manufacturing facility may conduct all activities
permitted by the State. This includes, but is not limited to: extractions, repackaging
and relabeling, infusions and extractions.
b. Any manufacturing that will be conducted by the commercial cannabis business
shall be included on the application. No additional manufacturing activity can be
conducted without notifying the Executive Director of the Planning and Building
Agency or his or her designee, after which a determination will be made if the new
activity may commence with or without modification to the RSP or if a new RSP is
required.
c. At all times, the commercial cannabis manufacturing facility will be compliant with
all State regulations for cannabis manufacturing including Health and Safety Code
§ 11362.775, as amended from time to time. Signage shall be posted regarding
the type(s) of chemicals being used at the manufacturing facility.
d. Cannabis manufacturing facilities shall not contain an exhibition or product sales
area or allow for retail distribution of products at that location unless the facility is
co-located with an approved commercial cannabis retail business with a RSP.
e. Extraction equipment and extraction process utilizing hydrocarbon solvents shall
be located in a room or area dedicated to extraction.
f. All commercial cannabis manufacturing/processing facilities shall comply with any
and all applicable safety guidelines adopted by the Orange County Fire Authority,
the State of California, and/or the City of Santa Ana for cannabis plant processing
and extraction.
8. Additional Operational Standards for Indoor Commercial Cannabis Cultivation
Facilities.
a. There shall be no exterior evidence of cannabis cultivation from a public right-of-
way.
b. The Building Official may require additional specific standards to meet the
California Building Code and Fire Code, including, but not limited to, installation of
fire suppression sprinklers.
c. Compliance with Section 13149 of Water Code as enforced by the State Water
Resources Control Board is required.
d. All commercial cannabis cultivation facilities shall comply with any and all
applicable safety guidelines adopted by the Orange County Fire Authority, the
State of California, and/or the City of Santa Ana for cannabis carbon dioxide
enrichment systems.
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e. Cannabis cultivation facilities shall not contain an exhibition or product sales area
or allow for retail distribution of products at that location unless the facility is co-
located with an approved commercial cannabis retail business with a RSP.
9. Additional Operational Standards for Commercial Cannabis Distribution Facilities.
a. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during the business's regular business hours.
b. A distributor shall ensure that all cannabis goods stored in compliance with all
applicable State regulations to ensure conformance to any and all applicable Track
and Trace systems required by the State.
c. Employee breakrooms, eating areas, changing facilities, locker rooms and
bathrooms shall be completely separated from the storage areas.
10. Additional Operational Standards for Consumption Lounges and Onsite Cannabis
Consumption.
a. Inspections by an authorized City of Santa Ana representative may be
conducted anytime during the business's regular business hours.
b. Consumption lounges are permitted as an ancillary use to a licensed
commercial cannabis medicinal or adult-use retail business.
c. Consumption lounges must be on the same site as and physically contiguous
to a licensed commercial cannabis retail business.
d. All retail sales transactions for the purposes of onsite consumption shall be
conducted using point-of-sales equipment and reported separately in a format
satisfactory to the Executive Director of the Finance and Management Services
Agency.
e. Two (2) parking spaces per 1,000 square feet of gross building square footage
shall be provided for any building expansion constructed for a consumption
lounge.
f. Consumption lounges shall be designed such that a patron need not enter a
consumption lounge in order to access a retail-only portion of the facility. There
shall be no connection between a consumption lounge and another tenant
suite.
g. Medicinal or adult-use cannabis and cannabis products may be sold on the
premises of a consumption lounge, subject to the following:
i. The operator must hold a valid adult-use and/or medicinal retail business
RSP.
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ii. Products shall be sold for on-site consumption only. Products may not be
sold for off-site consumption. All cannabis products purchased and opened
at the facility must be smoked or consumed on site and shall not be
permitted to leave the facility unless in a resealed package that meets all
State guidelines.
iii. All products consumed or smoked on premises shall be sold at the
consumption lounge. Operators shall not permit patrons to bring their own
personal cannabis or cannabis products to the consumption lounge.
h. Outdoor smoking is permitted with the installation of odor-control mechanisms
as reviewed and approved by the Planning and Building Agency.
i. Food may be consumed in the consumption lounge; however, the sale or
consumption of alcohol or tobacco products is prohibited.
j. Access to the consumption lounge shall be restricted to persons twenty-one
(21) years of age or older, or as allowed by State law.
k. The consumption or smoking of cannabis products shall not be visible from any
public place, public right-of-way, or area where minors may be present. If the
consumption lounge contains an outdoor area, the outdoor area shall be
oriented so as to eliminate visibility from any adjacent public place, public right-
of-way, area where minors may be present, or adjacent business, tenant space,
or building.
l. Commercial cannabis consumption lounges shall be required to provide an air
treatment system that ensures off-site odors shall not result from its operations.
The facility shall be designed to provide sufficient odor absorbing ventilation
and exhaust systems so that any odor generated inside the location is not
detected outside the building, in any adjacent tenant suites, on adjacent
properties or public rights-of-way, or within any other unit located within the
same building as the facility if the use occupies only a portion of a building.
m. Odor control response.
i. Within twenty-four (24) hours of any complaint concerning odors emanating
from or originating at the facility, the operator shall respond to the complaint
in question and shall timely file a written disclosure to the Planning and
Building Agency documenting any and all actions taken and planned to
address the odor complaint(s). The City, upon determination of the
continued existing of detectable odor from the facility, may require an
operator to submit an implementation plan and/or a performance schedule,
above and beyond this written disclosure filed within twenty-four (24) hours,
to ensure the employment of measures to control the odor.
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ii. The Executive Director of the Planning and Building Agency shall have the
authority to require an operator of a consumption lounge to amend any
implementation plan and/or performance schedule submitted pursuant to
this sub-section to cause compliance herewith.
iii. Any failure to timely submit a written disclosure, a more detailed
implementation plan and/or performance schedule or amendment thereto,
to timely adhere to terms of either, or to complete any required
improvements within the timeframe specified by the Executive Director of
the Planning and Building Agency shall be grounds for revocation of the
RSP.
iv. Odors from a consumption lounge are identified as a public nuisance
pursuant to the Santa Ana Municipal Code. The City may pursue all
administrative, civil, and criminal remedies available in relation to any
nuisance determined to exist with respect to the operation of a consumption
lounge in violation of this sub-section.
n. All consumption lounges shall be equipped with point-of-sale or similar
equipment to distinguish sales of products made for onsite consumption from
sales of retail products for offsite consumption.
11. Additional Operational Standards for Temporary Consumption Events and
Temporary Consumption Festivals.
a. Inspections by an authorized City of Santa Ana representative may be
conducted anytime during the event.
b. All retail sales transactions for the purposes of onsite consumption during a
temporary consumption event shall be conducted using point-of-sales
equipment and reported separately in a format satisfactory to the Executive
Director of the Finance and Management Services Agency.
c. Temporary Consumption Festivals.
i. Temporary consumption festivals may be held on public or private
property as approved by the City.
ii. Temporary consumption festivals may only be organized and held by
the City of Santa Ana.
iii. Temporary consumption festivals are subject to all applicable
standards promulgated by this Chapter for temporary consumption
events.
iv. All cannabis products and food available for purchase must be
sourced locally from Santa Ana-based businesses.
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d. Temporary consumption events are permitted as an ancillary use to each
commercial cannabis medicinal or adult-use retail business, subject to review
and approval of a Land Use Certificate (LUC), pursuant to Section 41-675
through 41-677 of the Santa Ana Municipal Code, and verification of any
applicable required valid business licenses required pursuant to Chapter 21,
Articles XII and XIII of this Code. The number of temporary consumption events
permissible per business per calendar year is subject to establishment by
resolution of the City Council.
e. Live entertainment may be provided only in conjunction with an approved LUC.
f. Applications for temporary consumption event LUCs must be submitted at least
45 days prior to the event date.
g. Applicant(s) for a temporary consumption event must provide a copy of all final
application materials submitted to the State of California pursuant to California
Code of Regulations Section 15002.1 (Temporary Cannabis Event Application)
as amended from time to time.
h. The event shall last no longer than 48 hours and in all cases shall begin no
earlier than 8:00 a.m. and end no later than 10:00 p.m. The duration of setup
and dismantling activities associated with the event shall be specified on the
LUC application.
i. Location. Temporary consumption events must be on the same site as a
commercial cannabis medicinal or adult-use retail business.
j. Medicinal or adult-use cannabis and cannabis products may be sold on the
premises during temporary consumption events, subject to the following:
i. The operator must hold a valid adult-use and/or medicinal retail business
RSP.
ii. Products shall be sold for on-site consumption only. All unconsumed
cannabis products purchased and opened at the facility must be resealed
prior to leaving the facility.
iii. All products consumed or smoked on premises shall be sold at the facility.
Operators shall not permit patrons to bring their own personal cannabis or
cannabis products to the event.
k. Outdoor smoking is permitted with the installation of odor-control mechanisms
as reviewed and approved by the Planning and Building Agency.
l. Food may be consumed; however, the sale or consumption of alcohol or
tobacco products on the premises is prohibited.
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m. Access to the temporary consumption and/or special event shall be restricted
to persons twenty-one (21) years of age or older.
n. The consumption or smoking of cannabis products shall not be visible from any
public right-of-way or area where minors may be present. If the temporary
consumption event takes place in an outdoor area, the outdoor area shall be
oriented to eliminate visibility from any adjacent public place, public right-of-
way, area where minors may be present, or adjacent business, tenant space,
or building, and shall be oriented to minimize odor intrusion onto adjacent
tenant spaces and properties.
o. All events shall be required to provide an air treatment system that ensures off-
site odors shall not result from its operations. The site shall be designed to
provide sufficient odor absorbing ventilation and exhaust systems so that any
odor generated inside the location is not detected outside the building, in any
adjacent tenant suites, on adjacent properties or public rights-of-way, or within
any other unit located within the same building as the facility if the use occupies
only a portion of a building. Outdoor smoking, including vaping and the use of
other electronic inhalation devices, must take place within ventilated
enclosures subject to the satisfaction of the Planning and Building Agency and
Orange County Fire Authority.
p. Odor control response.
i. Odors from a temporary consumption event are identified as a public
nuisance pursuant to the Santa Ana Municipal Code. The City may pursue
all administrative, civil, and criminal remedies available in relation to any
nuisance determined to exist with respect to the operation of a consumption
lounge in violation of this Chapter.
ii. Upon receipt of any complaint concerning odors emanating from or
originating at the temporary consumption event, the Planning and Building
Agency may suspend or revoke the LUC.
q. All temporary consumption events shall be equipped with point-of-sale or
similar equipment to distinguish sales of products made for onsite consumption
from sales of retail products for offsite consumption.
Sec. 40-9. Commercial cannabis selection process.
1. Commercial Cannabis — Registration Application and Regulatory Safety Permit
Required.
a. For applicants prior to January 1, 2018: Existing medicinal cannabis business
operators, or those with pending applications for a medicinal RSP, who desire to
operate an adult cannabis retail business shall apply for the cannabis Regulatory
Safety Permit ("RSP") on or before December 14, 2017. The Director of Planning
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and Building shall review such application and issue the RSP, without
consideration of the merit based point system, so long as they satisfy all other
requirements of this Chapter.
b. The Regulatory Safety Permit ("RSP") selection process will be conducted in two
(2) phases, Phase 1 (Registration Application) and Phase 2 (Regulatory Safety
Permit Application). Registration Applications will be reviewed by the Director of
Planning and Building or designees(s) for completeness and compliance, and if
eligible, will be notified in writing to enter into the Phase 2 Regulatory Safety Permit
Application process. In Phase 2, the City of Santa Ana has established a merit
based point system for adult-use commercial cannabis retail businesses to
objectively award permits as described in the Regulatory Safety Permit
Application.
2. Phase 1 — Registration Application.
a. Following the adoption of this article, the Director of Planning and Building shall
prepare commercial cannabis business registration application forms and a related
administrative policy. Each commercial cannabis business interested in operating
pursuant to this article may submit an application together with a non-refundable
processing fee in an amount established by the City Council.
b. The Registration Application period shall be thirty (30) calendar days from the date
the applications are released. Following the application period, the Director of
Planning and Building or designee(s) shall stop accepting applications and review
all applications received in Phase 1. Each application that is complete and in
compliance with the application requirements in Phase 1 shall be notified in writing
whether they are a "RSP Eligible Applicant" or not. Each complete and compliant
applicant may then choose to file an application for a RSP in Phase 2.
c. The requirements for Phase 1 include, but are not limited to:
i. All application documents required in the City's Phase 1 Registration
Application package.
ii. Application was submitted during the application period.
iii. Application forms are filled out completely.
iv. Phase 1 application fee is paid.
v. A signed statement that the proposed location of the commercial cannabis
business on the application meets the zoning criteria established in this article
including, but not limited to, any and all sensitive use separation criteria
required by this article.
vi. Proof of site control for commercial cannabis retail businesses submitting
Phase 1 applications on or after July 1, 2018.
Ordinance No. NS-XXX
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d. The Director of Planning and Building or his or her designee(s) shall review each
application upon submission and ensure that the application is complete.
Incomplete applications will be promptly rejected and the applicant shall be notified
in writing of the deficiencies. The applicant shall be given an opportunity to cure
any incomplete or deficient application prior to the conclusion of the application
processing term, if such time period is applicable.
3. Phase 2 — Regulatory Safety Permit Application.
a. Each complete and compliant applicant may choose to complete and file a RSP
application to the Director of Planning and Building. The application shall be filed
together with a nonrefundable fee as established by resolution of the City Council,
to defray the cost of investigation required by this article.
b. The RSP application period shall be open for thirty (30) calendar days and may
run concurrently with the Phase 1 review period. Following the RSP application
period, the Director of Planning and Building or designee(s) shall stop accepting
applications and review all applications received in Phase 2.
c. The Director of Planning and Building or designee(s) will review all application
documents required in the City's Phase 2 application package plus the additional
requirements in subsection (d) below. The Director of Planning and Building or his
or her designee(s) will use a merit based point system to review and rank each of
applications from the most to the least points and objectively award the top
applicants a RSP. A complete description of the merit based point system and all
merit based point considerations shall be included with the application forms.
d. Phase 2 requirements include, but are not limited to:
i. All application documents required in the City's Phase 2 RSP application
package.
ii. Phase 2 application fee is paid and a comprehensive background check is
completed on all owners, managers, security guards, and/or agents.
iii. The Building Official or designee has inspected all structures in which the use
is located to determine that all applicable standards and requirements are met.
If a building permit is required for site improvements, Permit issuance will be
deferred until a certificate of occupancy or other building permit approval is
issued. Additionally, the Building Official has determined that there are no
notices of nuisance or other code compliance issues recorded or on the
property.
iv. The Planning Manager or designee has issued zoning clearance documenting
compliance with the following:
a. The use is permitted;
Ordinance No. NS-XXX
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b. All land use permits, if any, have been approved and all conditions of
approval have been met or are in good standing; and,
c. No zoning violations exist on the property.
e. The Director of the Planning and Building Agency or his or her designee(s) shall
review each application upon submission and ensure that the application is
complete. Incomplete applications will be promptly rejected and the applicant shall
be notified that business day of the deficiencies. The applicant shall be given an
opportunity to cure any incomplete or deficient application prior to the conclusion
of the application processing term, if such time period is applicable.
3.1 Commercial Cannabis — Registration Application and Regulatory Safety Permit for
Additional Commercial Cannabis Business Activities on the Same Premises (Co-
Location).
a. An existing commercial cannabis business with an RSP may co-locate additional
non-retail commercial cannabis business activities (cultivation, distribution, and/or
manufacturing) by applying for a new RSP for the additional use(s). The new RSP
must meet the all requirements of the Santa Ana Municipal Code except that
background checks (live scans) shall only be required for any new owners as
outlined in Section 40-8. A single RSP that lists any and all approved cannabis
business activity/activities may be renewed annually thereafter.
b. New or pending RSP applicants wishing to co-locate additional non-retail
(cultivation, distribution, and/or manufacturing) uses may submit a new RSP for
any of the non-retail commercial cannabis business activities. The additional RSP
must meet the all requirements of the RSP except that background checks (live
scans) shall only be required for any new owners as outlined in Section 40-8. A
single RSP that lists any and all approved cannabis business activity/activities may
be renewed annually thereafter.
c. New commercial cannabis business applicants — co-location.
1. New commercial cannabis retail applicants wishing to co-locate additional non-
retail (cultivation, distribution, and/or manufacturing) uses shall submit
separate RSPs for the proposed retail activity and another RSP for any of the
non-retail (cultivation, distribution, and/or manufacturing) commercial cannabis
business activities. Each RSP application will be evaluated independently and
must meet any applicable requirements of the RSP as outlined in Sections 40-
8 and 40-9, including, but not limited to, merit evaluation and additional
separation requirements for the retail RSP. A single RSP that lists any and all
approved cannabis business activity/activities may be renewed annually
thereafter.
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2. New non-retail commercial cannabis applicants wishing to co-locate additional
non-retail (cultivation, distribution, and/or manufacturing) uses may submit a
single RSP for the proposed activity or activities. The RSP application must
meet any applicable requirements of the RSP as outlined in Sections 40-8 and
40-9. A single RSP that lists any and all approved cannabis business
activity/activities may be renewed annually thereafter.
4. Regulatory Safety Permit Annual Renewal.
a. Applications for the renewal of a permit shall be filed with the Director of Planning
and Building or designee(s) at least sixty (60) calendar days before the expiration
of the current permit. Temporary permits will not be issued. Any permittee allowing
their permit to lapse or which permit expired during a suspension shall be required
to submit a new application, pay the corresponding original application fees and
be subject to all aspects of the selection process.
b. Any person desiring to obtain a renewal of their respective permit shall file a written
application under penalty of perjury on the required form with the Director of
Planning and Building or his or her designee(s) who will conduct a review. The
application shall be accompanied by a nonrefundable filing fee established by the
City Council to defray the cost of the review required by this article. An applicant
shall be required to update the information contained in their original permit
application and provide any new and/or additional information as may be
reasonably required by the Director of Planning and Building or designee(s) in
order to determine whether said permit should be renewed based on compliance
with all applicable provisions of the Santa Ana Municipal Code.
c. Compliance with Section 40-1(C) to provide for community benefits is required for
all commercial cannabis businesses seeking renewal of the RSP.
5. Appeal of Denial of Regulatory Safety Permit/Denial of RSP Renewal. The Executive
Director of the Planning and Building Agency or his or her designee(s) will review all
Regulatory Safety Permit applications and renewal requests, along with all other
relevant information, and determine if a RSP should be granted and/or renewed based
on compliance with all applicable provisions of the Santa Ana Municipal Code. If the
Executive Director of the Planning and Building Agency determines that the permit
shall not be granted and/or renewed, the reasons for denial shall be provided in writing
to the applicant. No such denial shall become effective until the applicant for the
regulatory safety permit and/or renewal has been notified in writing by certified mail of
the right to appeal the denial decision pursuant to the provisions of Chapter 3 of this
Code. If a timely appeal is filed, the denial shall be effective only upon decision of a
hearing officer as provided for in Chapter 3 of the Santa Ana Municipal Code.
Otherwise, the denial shall become effective after the timely appeal period has
passed. The matter may be subject to judicial review under the provisions of California
Code of Civil Procedure Sections 1094.5 and 1094.6.
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Sec. 40-9.1. Non-retail commercial cannabis business (cultivation, manufacturing,
distribution, and testing facility/laboratory) selection process.
1. Non-Retail Commercial Cannabis Businesses — Registration Application (Phase 1)
and Regulatory Safety Permit (Phase 2) Required.
a. Every Non-Retail Commercial Cannabis Business shall apply for the Phase 1
(Registration Application) and Phase 2 (Regulatory Safety Permit Application) in
the manner described in Section 40-9, except that the Director of the Planning and
Building Agency or his or her designee may accept Phase 1 and Phase 2
applications for a Non-Retail Commercial Cannabis Business concurrently, and
shall review such applications and issue the Regulatory Safety Permit Application
without consideration of the merit based point system, insofar as the applications
satisfy all other requirements of this article.
b. Applications for a Non-Retail Commercial Cannabis Business shall be accepted
during normal City Hall business hours and are not subject to the thirty (30) day
Phase 1 or Phase 2 application periods.
Sec. 40-9.2. Commercial cannabis consumption lounge permitting process.
1. After the adoption of this Ordinance, the Executive Director of the Planning and
Building Agency shall prepare application forms to evaluate a proposed commercial
cannabis consumption lounge. Each commercial cannabis retail business interested
in operating a consumption lounge pursuant to this article may submit an RSP
application together with a non-refundable processing fee in an amount established
by the City Council.
a. Beginning the effective date Ordinance No. NS-XXXX (January 1, 2023) and for
one year thereafter (until January 1, 2024), the City shall only accept RSP
applications for commercial cannabis consumption lounges from those licensed
commercial cannabis retail business with a valid RSP in the City of Santa Ana that
are in compliance with and having provided the attestation form signed by a Bona
Fide Labor Organization pursuant to Section 40-16 of this Chapter.
b. Beginning January 1, 2024, the City shall accept RSP applications for commercial
cannabis consumption lounges from any other licensed commercial cannabis retail
business with a valid RSP in the City of Santa Ana.
2. The Director or his or her designee shall determine whether each RSP application
demonstrates compliance with this article as prescribed by Section 40-9 of this
Chapter and notify the applicant of the outcome of the application as either eligible or
ineligible.
3. Qualified Consumption Lounge Applicants shall be notified by the City that they may
submit any/all required documentation and plan drawings to complete the City’s plan
check and permitting process to construct a consumption lounge.
Ordinance No. NS-XXX
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4. Upon notification of eligibility, applicants shall have 180 days to complete the plan
check and construction process, and be issued a certificate of occupancy, unless an
extension is granted by the Executive Director of the Planning and Building Agency to
resolve required building or site upgrades, modifications, repairs, or other property
issue mitigations tied directly to construction of the lounge.
Sec. 40-10. Audits - Commercial Cannabis Businesses.
Annual audits. No later than September 30 of every year, each licensed commercial
cannabis business, except commercial cannabis businesses licensed and operating
solely as shared manufacturers, shall be liable to file with the City an independent audit
or financial review of its operations of the previous calendar year. Provided, however, that
licensed commercial cannabis businesses which operate as microbusiness, or that
operate on a vertically or horizontally integrated basis as established in Chapter 21,
Article XIII of this Code, or that are co-located on shared premises may file a consolidated
independent audit or financial review. The form and contents of the document shall be
specified by the Executive Director of Finance and Management Services, or his or her
designee(s). The Executive Director of Finance and Management Services, or his or her
designee(s) may waive this requirement for certain licensed commercial cannabis
businesses in accordance with guidelines established by the Finance and Management
Services Agency.
Sec. 40-11. Inspection and enforcement responsibilities.
The Code Enforcement Division of the Planning and Building Agency may enter and
inspect the location of any commercial cannabis business between the hours of 7:00 a.m.
and 10:00 p.m., or at any reasonable time, to ensure compliance with this article. In
addition, any police officer may enter and inspect the location of any commercial cannabis
business and the recordings and records maintained as required by this article, except
that the inspection and copying of private medical records shall be made available to the
police department only pursuant to a properly executed search warrant, subpoena, or
court order. It is unlawful for any owner, responsible person, landlord, lessee, member
including, but not limited to, a member engaged in the management), or any other person
having any responsibility over the operation of the commercial cannabis business to
refuse to allow, impede, obstruct or interfere with an inspection, review or copying of
records and closed-circuit monitoring authorized and required under this article, including,
but not limited to, the concealment, destruction, and falsification of any recordings,
records, or monitoring.
Sec. 40-12. Violation and enforcement.
1. Violation/enforcement. Each and every violation of this article shall constitute a
separate violation and shall be subject to all remedies and enforcement measures
authorized by this Code. Additionally, as a nuisance per se, any violation of this article
shall be subject to injunctive relief, revocation of the commercial cannabis business
Ordinance No. NS-XXX
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Regulatory Safety Permit, revocation of the certificate of occupancy for the location,
disgorgement and payment to the City of any and all monies unlawfully obtained, costs
of abatement, costs of investigation, attorney fees, and any other relief or remedy
available at law or equity. The City may also pursue any and all remedies and actions
available and applicable under local and State laws for any violations committed by
the commercial cannabis business and persons related or associated with the
business.
2. Suspension or revocation. When an authorized City of Santa Ana representative finds
that any person holding a Regulatory Safety Permit under the provisions of Chapter
40 has violated the provisions of this chapter or is found guilty of conduct which would
form the basis of denial of the Regulatory Safety Permit as set forth in Article XIII of
this Chapter 18, s/he may revoke or suspend the permit. No such revocation shall
become effective until the Regulatory Safety Permit holder has been notified in writing
by certified mail of the right to appeal the revocation decision pursuant to the
provisions or Chapter 3 of this Code. If a timely appeal is filed, the revocation shall be
effective only upon decision of a hearing officer as provided for in Chapter 3 of the
Santa Ana Municipal Code. Otherwise, the revocation shall become effective after the
timely appeal period has passed.
3. State License Suspension/Revocation. Revocation or suspension of a Licensee's
State issued commercial cannabis business permit or license by the State shall
constitute a violation of this article and result in revocation of the Licensee's RSP.
Sec. 40-13. Transfer of ownership.
1. Upon the transfer of any interest in a commercial cannabis business, the Regulatory
Safety Permit shall be null and void. Any person, firm or entity desiring to own and
operate the commercial cannabis business shall make a new Regulatory Safety
Permit application. Prior to or concurrent with the submission of said application the
transferee shall obtain all required business licenses, post all required security
deposits, acquire all necessary, certificates, permits or other licenses allowing the
doing of any act which the person paying or holding the same would not otherwise be
entitled to do; and any permit, license, variance or other instrument of approval or
evidence that any conditions exist as required by any other section of this Code or by
any statute or code provisions of the state must first be obtained or complied with
before the doing of any act or thing for which it is required. A fee as established by
resolution of the City Council shall be payable for each such application involving
transfer of any interest in an existing commercial cannabis retail business. The
provisions of this section shall apply to any person, firm, or entity applying for a
Regulatory Safety Permit for premises previously used as such establishment.
2. Any such transfer of any interest in an existing commercial cannabis business or any
application for an extension or expansion of the building or other place of business of
Ordinance No. NS-XXX
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the commercial cannabis retail business shall require inspection and compliance with
section 40-11 of this article.
3. The owner or operator of a commercial cannabis business shall be responsible for
notifying the City of any intention to rename, change management, or convey the
business to another person/entity. Notification to the City must be made a minimum
of sixty (60) days prior to such transfer.
Sec. 40-14. Limitations on the city's liability.
To the fullest extent permitted by law, the City shall not assume any liability whatsoever,
with respect to approving any Regulatory Safety Permits pursuant to this article or the
operation of any commercial cannabis business approved pursuant to this chapter. As a
condition of approval of a Regulatory Safety Permit as provided in this chapter, the
applicant or its legal representative shall:
1. Execute an agreement indemnifying the City from any claims, damages, injuries or
liabilities of any kind associated with the registration or operation of the commercial
cannabis business or the prosecution of the applicant or business or its members for
violation of federal or State laws;
2. Maintain insurance in the amounts and types that are acceptable to the City Attorney
or his or her designee;
3. Name the City as an additionally insured on all City required insurance policies;
4. Agree to defend, at its sole expense, any action against the City, its agents, officers,
and employees related to the approval of a Regulatory Safety Permit; and,
5. Agree to indemnify and reimburse the City for any court costs and attorney fees that
the City may be required to pay as a result of any legal challenge related to this
ordinance and/or the City's approval of a Regulatory Safety Permit. The 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.
Sec. 40-15. Fees and taxes.
All commercial cannabis businesses shall pay applicable fees and taxes, which shall
include one (1) or more of the following:
1. Application Fees. The business owner shall submit a non-refundable fee to cover the
cost of processing an application for the commercial cannabis business. These fees
may be divided into two (2) fees according to Registration Application Fee (Phase 1)
and RSP Application Fee (Phase 2).
2. Regulatory Safety Permit Renewal Fees. The business owner shall submit a non-
refundable fee to cover the cost of processing an application renewal annually.
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3. Business License Taxes. The business owner shall at all times maintain a current and
valid City of Santa Ana business license and shall pay all business license taxes,
deposits, charges, fees, deficiencies, penalties, interest, and other associated
assessments as may be required pursuant to ordinances of the City of Santa Ana
and/or the Santa Ana Municipal Code.
4. Operating Agreement Fees.
5. Additional cannabis-specific gross receipts, excise taxes, or other municipal tax
approved by the voters of the City of Santa Ana.
6. All required state taxes including sales and use taxes, business/franchise or income
taxes, payroll taxes, etc.
7. All required federal taxes.
Sec. 40-16. Tax Rates for Qualified Social Equity Commercial Cannabis Retail
Business Operators.
Commercial cannabis retail businesses opting-in to the social equity measures described
in this subsection shall, upon confirmation of their certification as a Qualified Social Equity
Commercial Cannabis Business Operator by the City of Santa Ana Planning and Building
Agency, be eligible for the applicable rate of Commercial Cannabis Retail Business taxes
payable on the socially equitable retail activities specified in their City of Santa Ana
business license(s), as set forth in Section 21-133(d) of the Santa Ana Municipal Code.
These activities are to include: Socially Equitable Adult-use Cannabis Retail Business
(including Delivery and Consumption Lounge) and Socially Equitable Adult-use Cannabis
Retail Business Temporary Consumption and/or Special Events. Qualified Social Equity
Commercial Cannabis Retail Business tax rates become effective on the first day of the
first calendar month following the issuance of a confirmation of qualification notification
as set out hereunder by the City of Santa Ana Executive Director of the Planning and
Building Agency or his or her designee.
A Commercial Cannabis Retail Business seeking certification as a Qualified Social Equity
Commercial Cannabis Retail Business shall provide documentation showing that it
commits to and satisfies the following social equity measures to be eligible for Socially
Equitable Adult-use Cannabis Retail Business tax rates:
1. Full-time jobs. Sixty percent (60%) of its workforce is hired for full-time work (paid
hourly wages for an average of at least 32 hours per week or 1,664 hours per year).
2. Wages. Employees, not including supervisors, must receive wages that exceed 115
percent of the California minimum wage at the time of hire. This wage shall increase
to 120 percent within three years of the effective date of this Ordinance.
3. Delivery Drivers. Delivery drivers must be reimbursed for mileage according to the
Internal Revenue Service’s Standard Mileage Rates.
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4. High Road Training Partnerships. Applicant participates in a High Road Training
Partnership of the sort defined by Unemployment Insurance Code Section 14005 as
amended from time to time and that is recognized by the State of California.
5. Social Equity Policy. The commercial cannabis retail business owner maintains a
written social equity policy that describes:
a. How the cannabis retail business owner aims to recruit, hire, and retain employees
who reside in low-income census tracts in Santa Ana where at least fifty-one
percent (51%) of the current residents have a household income at or below eighty
percent (80%) of the County Area Median Income;
b. How the cannabis retail business owner will partner with Community Benefit
Organizations or its High Road Training Program to recruit, hire, and retain
employees arrested or convicted for a crime relating to the sale, possession, use
or cultivation of cannabis prior to November 8, 2016 that could have been
prosecuted as a misdemeanor or citation under Current California law, or currently
receiving unemployment benefits.
c. Any other measures or employee benefits aimed to address the disproportionate
impact of the War on Drugs in certain communities affected by it.
6. Equity Opportunities.
a. An “Equity Employee” is a natural person who resides in low-income census tracts
in Santa Ana where at least fifty-one percent of the current residents have a
household income at or below eighty percent (80%) of the County Area Median
Income.
b. On or before Jan 1, 2024, Applicants must demonstrate that forty percent (40%)
of all employees employed in the last tax period were Equity Employees, or
demonstrating that hourly, non-supervisorial employees receive employee stock
ownership options or other equity.
7. Local Hiring. The commercial cannabis business owner demonstrates that:
a. Beginning January 1, 2023, the cannabis retail business owner demonstrates that
twenty percent (20%) of its employees reside within the City of Santa Ana, then
b. Beginning January 1, 2024, the cannabis retail business owner demonstrates that
forty percent (40%) of its employees reside within the City of Santa Ana.
The Executive Director of the Planning and Building Agency or his or her designee shall
determine whether each RSP application demonstrates compliance with this article as
prescribed by Section 40-16 of this Chapter, and as prescribed by subsections 1 and 2
below. The Director or his or her designee shall notify the Finance and Management
Services Agency of the outcome of the application as either eligible or ineligible for the
socially equitable Adult-use Cannabis Retail Business tax rates referenced by this
subsection.
1. To demonstrate conformance with the social equity measures promulgated by Section
40-16 of this Chapter, commercial cannabis retail business owners must submit an
attestation form signed by a Bona Fide Labor Organization, as defined by Section 40-
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2 (19) of this Chapter, and a copy of an active Collective Bargaining Agreement with
a Bona Fide Labor Organization that indicates the business is in compliance with the
social equity measures of this subsection. The City may require any supplemental
documentation as needed to review and verify the submitted attestation.
2. Proof of active participation in High Road Training Partnership recognized by the State
of California can be demonstrated only by providing a signed letter on official
letterhead from an administrator or trustee of the 501(c)(3), 501(c)(4), or 501(c)(5)
entity responsible for managing the Training Partnership. The letter must confirm the
High Road Training Partnership’s State recognition and the business’s participation,
and shall describe the High Road Training Partnership, its constituent organizations,
goals, and trainings offered to cannabis employees. A copy of a grant contract with
the State of California that recognizes the program as a High Road Training
Partnership shall be attached to the letter.
The Responsible Agency shall create and maintain on file the required attestation form to
be signed by a Bona Fide Labor Organization.
Sec. 40-17 to 40-99. Reserved.
Section 7. Article XIII of Chapter 18 of the Santa Ana Municipal Code (Medicinal
Marijuana Collectives/Cooperatives) is hereby deleted in its entirety, renamed
“Reserved,” and re-adopted and amended as Article II of Chapter 40 of the Santa Ana
Municipal Code to read as “Regulation of Commercial Cannabis Medicinal Retail
Activities” as follows:
ARTICLE II. – REGULATION OF COMMERCIAL CANNABIS MEDICINAL RETAIL
ACTIVITIES
Sec. 40-100. Purposes and intent.
It is the purpose and intent of this article to regulate the collective distribution of medical
marijuana at a commercial cannabis retail business in order to ensure the health, safety
and welfare of the residents of the City of Santa Ana. The regulations in this article, in
compliance with the Compassionate Use Act, the Medical Marijuana Program Act, and
the California Health and Safety Code (collectively referred to as "State Law") do not
interfere with a patient's right to use medical marijuana as authorized under State Law,
nor do they criminalize the possession or cultivation of medical marijuana by specifically
defined classifications of persons, as authorized under State Law. Under State Law, only
qualified patients, persons with identification cards, and primary caregivers may cultivate
medical marijuana collectively. Businesses operating as medical marijuana collectives
shall comply with all provisions of the Santa Ana Municipal Code, State Law, the 2008
California Attorney General Guidelines for the Security and Non-Diversion of Marijuana
Grown for Medical Use, and all other applicable local laws. Nothing in this article purports
to permit activities that are otherwise illegal under state or local law.
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Sec. 40-101. Definitions.
(a) "Medical marijuana collective" or "cooperative" or "collective" means any facility
otherwise known as a commercial cannabis medicinal retail or retailer, or location
where medical marijuana is made available and/or distributed by or to one (1) or
more of the following: a primary caregiver, a qualified patient or a person with an
identification card in strict accordance with California Health and Safety Code §
11362.5 et seq., as sometimes amended. This term shall include any legal form of
business recognized in the State of California. A "medical marijuana collective"
shall not include the following uses, as long as the location of such uses are
otherwise regulated by this Code or applicable law: a clinic licensed pursuant to
Chapter 1 of Division 2 of the Health and Safety Code, a health care facility
licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code, a
residential care facility for persons with chronic life-threatening illness licensed
pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code, a residential
care facility for the elderly licensed pursuant to Chapter 3.2 of Division 2 of the
Health and Safety Code, a residential hospice or a home health agency licensed
pursuant to Chapter 8 of Division 2 of the Health and Safety Code, as long as such
use complies strictly with applicable law including, but not limited to, Health and
Safety Code Section 11362.5 et seq.
(b) "Identification card" shall have the same definition as that contained in Health and
Safety Code § 11362.7 et seq., as sometimes amended.
(c) "Manager" means any person responsible for the establishment, organization,
supervision, or oversight of the operation of a Collective, including, but not limited
to, members who perform the functions of president, vice-president, director,
operating officer, financial officer, secretary, or treasurer. Ability to control one (1)
or more of the following functions shall be prima facie evidence that such person
is a manager:
(1) To hire, select, or separate employees or staff, including volunteers;
(2) To acquire facilities, furniture, equipment or supplies other than occasional
replenishment of stock;
(3) To disburse funds of the business other than occasional expenditures for
replenishment of stock; or
(4) To make, or participate in making, policy decisions relative to the operations
of the business.
(d) "Marijuana" shall have the same definition as that contained in Health and Safety
Code § 11018 as sometimes amended.
(e) "Medical marijuana" shall have the same definition as that contained in Health and
Safety Code § 11362.5 et seq., as sometimes amended.
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(f) "Primary caregiver" shall have the same definition as that contained in Health and
Safety Code §§ 11362.5 and 11362.7, as sometimes amended.
(g) "Qualified patient" shall have the same definition as that contained in Health and
Safety Code § 11362.5 as sometimes amended.
(h) "Private Residence" shall have the same definition as that contained in Health and
Safety Code §§ 11362.2(5) and 17922. A recreational vehicle does not constitute
a lawfully established structure for the purposes of this article.
(i) "Premises" means a single, legal parcel of property. Where contiguous legal
parcels under common ownership or control, such contiguous legal parcels shall
constitute a single "premises" for purposes of this chapter.
(j) "Marijuana Products" shall have the same definition as that contained in Health
and Safety Code § 11018.1.
(k) "Marijuana Accessories" shall have the same definition as that contained in Health
and Safety Code § 11018.2.
(l) "Personal Cultivation" shall mean the planting, growing, harvesting, drying, curing,
grading or trimming of marijuana plants for personal use within a private residence
or accessory structure to a private residence.
(m) "Fully enclosed and secure structure" means a space within a building,
greenhouse or other structure which has a complete roof enclosure supported by
connecting walls extending from the ground to the roof, which is secure against
unauthorized entry, provides complete visual screening, and which is accessible
only through one (1) or more lockable doors.
(n) "Dispensary" means a premises where medical cannabis or medical cannabis
products, or devices for the use of medical cannabis or medical cannabis products
are offered, either individually or in any combination, for retail sale, including an
establishment that delivers, pursuant to Business and Professions Code § 19340,
medical cannabis and medical cannabis products as part of a retail sale.
Sec. 40-102. Scope of article.
The operating standards established in this article apply to any site, facility, location, use,
cooperative or business currently operating in the City of Santa Ana, or which commences
operations after the effective date of this article, that distributes, dispenses, stores, sells,
exchanges, processes, delivers, or gives away, medical marijuana to qualified patients,
health care providers, patients' primary caregivers, or physicians, pursuant to Health &
Safety Code § 11362.5 (adopted as Proposition 215, the "Compassionate Use Act of
1996") or any state regulations adopted in furtherance thereof. Any collective in the City
of Santa Ana shall operate in conformance with the operating standards set forth in this
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Code to assure that the operations of the collective are in compliance with California law
and to mitigate the adverse secondary effects from operations of dispensaries.
Sec. 40-103. Operating Standards.
(a) No recommendations from a doctor for medical marijuana shall be issued on-site.
(b) A collective shall only dispense medical marijuana to qualified patients and their
caregivers as defined by California Health and Safety Code § 11362.5 (Proposition
215). This shall include possession of an original valid doctor's recommendation, not
more than one (1) year old, for medical marijuana use by the patient.
(c) A collective shall notify patrons of the following through posting of a sign in a
conspicuous location:
(1) Use of medical marijuana shall be limited to the patient identified on the
doctor's recommendation. Secondary sale, barter or distribution of medical
marijuana is a crime and can lead to arrest.
(2) That loitering on and around the collective site is prohibited by California Penal
Code § 647(e) and that patrons must immediately leave the site and not consume
medical marijuana in the vicinity of the collective or on the property or in the parking
lot.
(3) Forgery of medical documents is a felony crime.
(4) A warning that patrons may be subject to prosecution under federal marijuana
laws.
(5) That the use of medical marijuana may impair a person's ability to drive a motor
vehicle or operate machinery.
(d) A collective shall not provide marijuana to any individual in an amount not consistent
with personal medical use
(e) Marijuana shall not be grown or cultivated at collective sites, except that cuttings of
the marijuana plant may be kept or maintained on-site for distribution to qualified
patients and primary caregivers as follows:
(1) The cuttings shall not be utilized by a collective as a source for the provision
of marijuana for consumption on-site, however, upon provision to a qualified patient
or primary caregiver, that person may use the cuttings to cultivate marijuana plants
off-site for their own use and they may also return marijuana from the resulting
mature plant for distribution by the collective.
(2) For the purposes of this paragraph, the term "cutting" shall mean a rootless
piece cut from a marijuana plant, which is no more than six (6) inches in length, and
which can be used to grow another plant in a different location.
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(f) A collective shall comply with applicable provisions of the California Health and
Safety Code §§ 11362.5 through 11362.83, inclusive.
Sec. 40-104 Medical Marijuana Waitlist.
(a) Pursuant to Ordinance No. NS-2864, adopted December 9, 2014, the Director of
Planning and Building shall prepare Cooperative/Collective registration application
forms and a related administrative policy. Each collective interested in operating
pursuant to this article may submit an application together with a non-refundable
processing fee in an amount established by the City Council. Within 60 days after the
adoption of Ordinance No. NS-2864, the Director shall stop accepting applications and
process all applications received.
(b) The Director or his or her designee shall have determined whether each application
demonstrates compliance with this article. Each application that is in compliance with
this article shall be placed on the "Qualified Registration Applicant List" and the
Director shall notify the applicant in writing that it is a "Qualified Registration
Applicant."
(c) Once all applications are processed, the Director shall have held an independent
selection process ("lottery") in an open and public location and select 20 applications.
The 20 applications chosen through the independent selection process (lottery) will
be placed on the "Regulatory Safety Permit ("RSP") Eligibility List." Each applicant on
the RSP Eligibility List may then choose to file an application for a RSP pursuant to
section 40-9. All applicants identified on the RSP Eligibility List following the February
5, 2015 independent selection process (lottery) shall be required to concurrently: (1)
File an application for an RSP and (2) Submit all required construction plans for plan
check by the City by March 30, 2023, subject to the requirements of this Chapter and
other applicable chapters of the Santa Ana Municipal Code, and be operational with
sustained business activity within 180 days of construction permit issuance. An
extension may be issued for a period of time as may be reasonably required to affect
upgrades, modifications, repairs, or other property issue mitigations as approved by
the Director of Planning and Building or his or her designee. Failure to satisfy these
requirements by that deadline will disqualify the applicant from the RSP Eligibility List
and the Waitlist described in subsection (d). Relocation is permitted pursuant to
Section 40-7 of this Chapter.
(d) Qualified Registration Applicants will appear on the "Qualified Registration Applicant
List" in the order that they are selected during the independent selection process
(lottery). This list is the Waitlist. The Waitlist will become active if (1) an applicant on
the RSP Eligibility List is disqualified from that List; (2) a location appearing on the
RSP Eligibility List becomes available; or (3) a location not appearing on the RSP
eligibility list becomes available. A Qualified Registration Applicant's ability to move
from the Waitlist to the RSP Eligibility List is determined by the applicant's proposed
medical marijuana collective location and the applicant's position on the Waitlist.
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(e) A Qualified Registration Applicant that moves from the Waitlist to the RSP Eligibility
List must submit a completed RSP application within three (3) months following
issuance of a written notice advising the applicant of that opportunity. Failure to submit
a completed RSP application by that deadline will disqualify the applicant from the
RSP Eligibility List and the Waitlist.
(f) The Director shall maintain the Waitlist and update it on an annual basis unless
terminated pursuant to subsection 40-104 (g) through (j). A Qualified Registration
Applicants on that Waitlist must submit a written request each year to maintain its
status on the waitlist.
(g) Relocation of an existing and licensed medical marijuana collective or medical
marijuana cooperative as defined in Article II of this Chapter that is operating in full
compliance with the provisions of this Article is permitted subject to Section 40-7 of
this Chapter.
Sec. 40-105. Maintenance of records.
A medical marijuana collective shall maintain records at the location accurately and
truthfully documenting:
(a) The full name, address, and telephone number(s) of the owner, landlord and/or lessee
of the location;
(b) The full name, address, and telephone number(s) of all members who are engaged in
the management of the collective and the exact nature of each member's participation
in the management of the collective;
(c) The full name, address, and telephone number(s) of all patient members to whom the
collective provides medical marijuana, a copy of a government-issued identification
card for all patient members;
(d) The full name, address, and telephone number(s) of all primary caregiver members to
whom the collective provides medical;
(e) All receipts of the collective, including but not limited to all contributions,
reimbursements, and reasonable compensation, whether in cash or in kind, and all
expenditures incurred by the collective for the cultivation of medical marijuana; and
(f) Proof of compliance with the California Attorney General Guidelines for the Security
and Non-Diversion of Marijuana Grown for Medical Use.
These records shall be maintained by the collective for a period of five (5) years and shall
be made available by the collective to the police department and/or community
preservation division upon request. If they are not produced as requested the city may
seek a search warrant, subpoena, or court order. In addition to all other formats that the
collective may maintain, these records shall be stored by the collective at the location in
a printed format in its fireproof safe. Any loss, damage or destruction of the records shall
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be reported to the police department within twenty-four (24) hours of the loss, destruction
or damage.
Sec. 40-106. Audits – Cooperatives/Collectives.
Annual audits. No later than September 30 of every year, each licensed medical
marijuana collective shall be liable to file with the city an independent audit or financial
review of its operations of the previous calendar year. Provided, however, that licensed
collectives which operate on a vertically or horizontally integrated basis as established in
Chapter 21, Article XII of this Code, or that are co-located on shared premises may file a
consolidated audit or independent financial review. The form and contents of the
document shall be specified by the executive director of finance and management
services, or his/her designee(s). The Executive Director of Finance and Management
Services, or his or her designee(s) may waive this requirement for certain licensed
collectives in accordance with guidelines established by the Finance and Management
Services Agency.
Sec. 40-107. Applicability to existing medical marijuana operations.
Any existing medical marijuana collective, dispensary, operator, establishment, or
provider that does not comply with the requirements of this article must immediately cease
operation until such time, if any, when it complies fully with the requirements of this article.
No medical marijuana collective, dispensary, operator, establishment, or provider that
existed prior to the enactment of this article shall be deemed to be a legally established
use under the provisions of this article, and such medical marijuana collective,
dispensary, operator, establishment, or provider shall not be entitled to claim legal
nonconforming status.
Sec. 40-108. Compliance with this article and state law.
(a) It is unlawful for any person to:
i. Cause, permit or engage in the giving away of marijuana, or
ii. Own, establish, operate, use or permit the establishment or operation of a medical
marijuana collective or cooperative, or to participate as an employee, contractor,
agent, responsible person or volunteer of a collective or cooperative, except as
provided in this article, and pursuant to any and all other applicable local and state
laws.
iii. The prohibition in subsection (ii) above includes, renting, leasing, or otherwise
permitting a medical marijuana business to occupy or use a location, vehicle, or
other mode of transportation.
(b) It is unlawful for any person to cause, permit or engage in any activity related to
medical marijuana except as provided in Health and Safety Code § 11362.5 et seq.,
and pursuant to any and all other applicable local and state laws.
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(c) It is unlawful for any person to knowingly make any false, misleading or inaccurate
statements or representations in any forms, records, filings or documentation required
to be maintained, filed or provided to the City under this article, or to any other local,
state or federal government agency having jurisdiction over any of the activities of
collectives.
(d) It shall be the sole responsibility of the members engaged in the management of the
collective to ensure that the collective is at all times operating in a manner compliant
with all applicable state laws and this article. Nothing in this article shall be construed
as authorizing any actions which violate state law with regard to the cultivation,
transportation, provision, and sale of medical marijuana.
(e) Cultivation of Marijuana.
(1) Personal Cultivation. Individuals twenty-one (21) years of age or older may plant,
cultivate, harvest, dry, or process up to six (6) living marijuana plants for personal
(non-commercial) use in a private residence or accessory structure to a single
private residence in the City of Santa Ana and must comply with the following
requirements:
i. The marijuana cultivation area shall be located indoors within a private
residence or accessory structure on a single parcel of property;
ii. No more than six (6) living marijuana plants is permitted for indoor personal
cultivation;
iii. Marijuana in excess of twenty-eight and one-half (28.5) grams produced by
plants kept for indoor personal cultivation must be kept in a locked space on
the grounds of the private residence not visible from the public right-of way.
iv. There shall be no exterior visibility or evidence of marijuana cultivation outside
the private residence from the public right-of-way, including but not limited to
any marijuana plants, equipment used in the growing and cultivation operation,
or any light emanating from the cultivation; or
v. The cultivation may not violate any California Building, Electrical or Fire Codes
or any other health and safety standards.
(2) Commercial Cultivation. Commercial cultivation of marijuana or cannabis is
prohibited anywhere in the City except as allowed and regulated in Article I of this
Chapter.
(3) Outdoor Cultivation. Outdoor commercial cultivation of marijuana or medical
marijuana is prohibited anywhere in the City. No person, including a qualified
patient or primary caregiver, shall engage, permit, or participate in the outdoor
commercial cultivation of marijuana in the City.
(4) Public Nuisance Prohibited.
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(i) It is hereby declared to be unlawful and a public nuisance for any person
owning, leasing, occupying, or having charge or possession of any parcel within
the City to create a public nuisance in the course of cultivating marijuana plants
or any part thereof in any location, indoor or outdoor, except as allowed and
regulated in Chapter 40 of the Santa Ana Municipal Code. A public nuisance
may be deemed to exist, if such activity produces:
(1) Odors which are disturbing to people of reasonable sensitivity residing or
present on adjacent or nearby property or areas open to the public;
(2) Repeated responses to the parcel by law enforcement personnel;
(3) A repeated disruption to the free passage of persons or vehicles in the
neighborhood, excessive noise which is disturbing to people of normal
sensitivity on adjacent or nearby property or areas open to the public;
(4) Any other impacts on the neighborhood which are disruptive of normal
activity in the area including, but not limited to, grow lighting visible outside
the dwelling, excessive vehicular traffic or parking occurring at or near the
dwelling, and excessive noise emanating from the dwelling.
(5) Outdoor and Commercial growing and cultivation of marijuana, except as
allowed and regulated in Chapter 40 of the Santa Ana Municipal Code.
(f) A permitted medical marijuana dispensary may deliver medical marijuana only to a
qualified patient or caregiver. Medical marijuana delivery services by dispensaries
possessing regulatory safety permits must comply with Business and Professions
Code §19340. Delivery of cannabis from a dispensary permitted pursuant to this
Chapter can only be made in a city or county that does not expressly prohibit it by
ordinance. Delivery services by dispensaries not in possession of regulatory safety
permits is expressly prohibited.
(g) Non-Retail Commercial Cannabis Businesses for Medicinal and Adult-Use Cannabis
as defined in Article I of Chapter 40 of the Santa Ana Municipal Code (SAMC) are
permitted subject to the regulations and standards contained within Chapter 40 of the
SAMC.
Section 8. Section 21-127 of Article XII of Chapter 21 of the Santa Ana Municipal
Code is hereby amended to read in full as follows:
Sec. 21-127. - Marijuana collectives/cooperatives—Annual business license tax
assessment.
(a) Annual business license tax assessment for marijuana collectives/cooperatives.
(1) Every collective/cooperative whether it is organized or conducted as a "not
for profit" business, a "non-profit" business, or a "for-profit" business, shall
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pay an annual business license tax in accordance with Chapter 21 and the
sections and subsections hereunder.
(2) For the purposes of this article, a marijuana collective/cooperative is defined
in section 40-101(b) and is considered to be a business as that term is
defined in section 21-3.
(3) For the purposes of this article, a collective/cooperative is not considered to
be a religious or charitable organization.
(4) "Medical marijuana collective/cooperative" or "collective/cooperative" shall
mean any activity regulated or permitted by chapter 40.
(5) For the purposes of this article, a marijuana collective/cooperative is not
considered to be a business or person having a "specified exemption" or
"specified exclusion" from business license taxation as set forth in sections
21-48 and 21-49.
(6) For the purposes of this article, a "nonprofit organization" shall mean any
institution or organization that is exempted from taxes measured by income
or gross receipts pursuant to Article XIII, Section 26 of the California
Constitution as codified under Chapter 4 (commencing with Section 23701)
of Part 11 of Division 2 of the Revenue and Taxation Code and Section
37101 (c) of the Government Code or Sub-Chapter F (commencing with
Section 501) of Chapter 1 of Subtitle A of the Internal Revenue Code of
1986. An institution or organization operating as a collective/cooperative
and claiming a gross receipts assessment business license tax exemption
under this section shall have the burden of furnishing to the collector such
information as the collector may require to validate the claim of exemption
including but not limited to such a determination by the California Franchise
Tax Board or any other information requested by the collector.
(7) For the purposes of this article, "gross receipts" shall mean any transfer of
title or possession, exchange or barter, conditional or otherwise, in any
manner or by any means whatsoever, of tangible personal property for a
consideration including any monetary consideration for marijuana
whatsoever, including, but not limited to, membership dues,
reimbursements provided by members, regardless of form, or the total
amount of cash or in-kind contributions, including all operating costs related
to the growth, cultivation or provision of marijuana or any transaction related
thereto. "Gross receipts" shall also include without limitation anything else
of value obtained by a collective/cooperative. The term "gross receipts"
shall also include the total amount of the sale price of all sales, the total
amount charged or received for the performance of any act, service or
employment of whatever nature it may be, whether or not such service, act
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or employment is done as a part of or in connection with the sale of goods,
wares, merchandise, for which a charge is made or credit allowed, including
all refunds, cash credits and properties of any amount or nature, any
amount for which credit is allowed by the seller to the purchaser without any
deduction therefrom, on account of the cost of the property sold, the cost of
materials used, the labor or service cost, interest paid or payable, losses,
or any other expense whatsoever; provided that cash discounts allowed or
payment on sales shall not be included. "Gross receipts" shall also include
the amount of any federal, manufacturer's or importer's excise tax included
in the price of property sold, even though the manufacturer or importer is
also the retailer thereof and whether or not the amount of such tax is stated
as a separate charge. "Gross receipts" shall not include the amount of any
federal tax imposed on or with respect to retail sales whether or not the
amount of such tax is stated as a separate charge. "Gross receipts" shall
not include the amount of any federal tax imposed on or with respect to retail
sales whether imposed upon the retailer or the consumer and regardless of
whether or not the amount of federal tax is stated to customers as a
separate charge, or any California state, city or city and county sales or use
tax required by law to be included in or added to the purchase price and
collected from the consumer or purchaser, or such part of the sales price of
any property previously sold and returned by the purchaser to the seller
which is refunded by the seller by way of cash or credit allowances given or
taken as part payment on any property so accepted for resale. "Gross
receipts" shall be calculated without any deduction on account of any of the
following:
(i) The cost of tangible property sold or bartered;
(ii) The cost of materials or products used, labor or service cost,
interest paid, losses, or other expense; or
(iii) The cost of transportation of the marijuana, or other property or
product.
(b) Business license tax rates for marijuana collectives/cooperatives.
(1) Every collective/cooperative, excepting a qualified "nonprofit organization,"
whether it is organized or conducted as a "not for profit" business, a "non-
profit" business, or a "for-profit" business, shall pay a separate business
license tax at a rate of up to ten (10) percent of the gross receipts generated
or otherwise received for each branch establishment or separate property
location of the business. The gross receipts tax shall be initially set at a rate
of five (5) percent. The maximum tax rate shall not exceed ten (10) percent
of gross receipts. This tax shall not be adjusted for inflation pursuant to
section 21-121.
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(2) Notwithstanding the maximum tax rate of ten (10) percent of gross receipts
imposed under subsection (b)(1), the city council may in its discretion at any
time by ordinance implement a lower gross receipts tax rate for all marijuana
collectives/cooperatives, as defined in such ordinance, subject to the
maximum rate of ten (10) percent of gross receipts. The city council may by
ordinance increase any such gross receipts tax rate from time to time, not
to exceed the maximum gross receipts tax rate established under
subsection (b)(1).
(3) Effective January 1, 2018, the gross receipts tax initially set at a rate of five
(5) percent pursuant to subsection (b)(1), shall be increased to a rate of six
(6) percent. The maximum tax rate shall not exceed ten (10) percent of
gross receipts. This tax rate shall not be adjusted for inflation pursuant to
section 21-121.
(4) Effective January 1, 2023, the gross receipts tax is set at a rate of six (6)
percent pursuant to subsection (b)(3), shall be decreased to a rate of five
(5) percent. The maximum tax rate shall not exceed ten (10) percent of
gross receipts. This tax rate shall not be adjusted for inflation pursuant to
section 21-121.
(5) As part of the gross receipts tax imposed by this article, each
collective/cooperative shall pay a minimum basic rate of two thousand
dollars ($2,000.00) annually for each separate branch location or separate
property location of the business.
(c) Modification, repeal or amendment. The city council may repeal the ordinance
codified in this article, or amend it in a manner which does not result in an increase
in the tax or taxes imposed herein, without further voter approval. The city council
may likewise by ordinance adopt and add additional provisions to any other article
of this chapter and relate them to this article, or amend any existing provisions of
any article of this chapter as they may already relate to this article in any manner
which does not result in an increase in the tax or taxes imposed herein, without
further voter approval. If the city council repeals said ordinance or any provision of
this article, it may subsequently reenact it without voter approval, as long as the
reenacted ordinance or section does not result in an increase in the tax or taxes
imposed herein.
(d) Administration—Rules, regulations, and guidelines; interpretation/clarification. In
order to aid in the city's collection of taxes due under this article and to ensure that
all marijuana collectives/cooperatives are taxed consistently to the best of the city's
ability, the collector, with the concurrence of the city attorney, may promulgate rules,
regulations, and guidelines, to implement and administer this article including, but
not limited to rules, regulations, and guidelines harmonizing other provisions of this
chapter with the provisions of this article in any manner not inconsistent with the
Ordinance No. NS-XXX
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intent of this article and which does not result in an increase in the tax or taxes
imposed herein. The collector may also, with the concurrence of the city attorney,
interpret or clarify the methodology of the tax, or any definition applicable to the tax,
so long as such interpretation or clarification (even if contrary to some prior
interpretation or clarification) is not inconsistent with the language of this article.
(e) Occasional transactions—Exemptions.
(1) The provisions of this article shall not apply to persons having no fixed place of
business within the city who come into the city for the purpose of transacting a
specific item of marijuana collective/cooperative business at the request of a
specific patient, client or customer, provided that such person does not come
into the city for the purpose of transacting business on more than five (5) days
during any calendar year.
(2) For any person not having a fixed place of business within the city who comes
into the city for the purpose of transacting collective/cooperative activities, the
business tax payable by such person may be apportioned by the collector in
accordance with this chapter.
(f) Reporting and remittance. Beginning as set forth in subsection (k) below, and
monthly thereafter, each marijuana collective/cooperative (except qualified nonprofit
organizations exempt from taxes measured by income or gross receipts) required to
pay a tax based on gross receipts under this article, shall report to the city any gross
receipts received during the preceding monthly reporting period and shall likewise
remit to the city the taxes due and owing during said period. For purposes of this
section, month shall mean calendar month, and taxes shall begin to accrue on the
date that a person or entity first receives a business license or other permit to
operate as a collective/cooperative.
The payment of the two thousand dollars ($2,000.00) minimum basic rate gross
receipts tax required annually for each separate branch location or separate property
location of the business in accordance subsection (b)(3), shall be made annually
prior to the beginning of the fiscal year beginning April first of the current year and
expiring on the 31st day of March of the following year. In the case of a new
collective/cooperative the minimum basic rate gross receipts tax shall be paid in
advance prior to any new business activity being undertaken. Every new licensee
shall pay in advance an amount equal to one-quarter (¼) of the annual minimum
basic rate gross receipts tax, for each quarter and fraction of a quarter remaining
during the period for which the new license is issued.
(g) Delinquent date—Penalty. Any individual or entity who fails to pay the taxes required
by this article when due shall be subject to penalties and interest as set forth in
accordance with this chapter. The collector is not required to send a delinquency or
other notice or bill to any person subject to the provisions of this chapter and failure
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to send such notice or bill shall not affect the validity of any tax or penalty due under
the provisions of this chapter.
(h) Payment of tax does not authorize unlawful business.
(1) The payment of a business tax required by this article, and its acceptance by
the city, shall not entitle any person to carry on any collective/cooperative
unless the person has complied with all of the requirements of this Code and
all other applicable laws, nor to carry on any collective/cooperative in any
building or on any premises in the event that such building or premises are
situated in a zone or locality in which the conduct of such collective/cooperative
is in violation of any law.
(2) No tax paid under the provisions of this article shall be construed as authorizing
the conduct or continuance of any illegal or unlawful business, or any legal
business in an illegal manner, or any business in violation of any ordinance of
the city. Nothing in this article implies or authorizes that any activity connected
with the distribution or possession of marijuana is legal unless otherwise
authorized and allowed by California and federal law. Nothing in this section
shall be applied or construed as authorizing the sale of marijuana.
(i) Business license tax certificate—Required. There are imposed upon all persons
engaged in transacting and carrying on any collective/cooperative business activity
in the city taxes in the amounts prescribed in this article. It shall be unlawful for any
person, either for him or herself or for any other person, to commence, transact or
carry on any business in the city without first having procured a business license
from the city under this chapter and having paid the taxes set forth in this article, and
without complying with any and all applicable provisions contained in this chapter.
The carrying on of any collective/cooperative without complying with all the
provisions of this article shall constitute a separate violation of this chapter for each
and every day that such collective/cooperative is so carried on.
(j) Classification of business license assessment type—Term and renewal. The
business license issued to marijuana collectives/cooperatives shall be classed as a
gross receipts assessment type, issued for the same term of license as set forth in
subsection 21-71(c) and shall be subject to renewal in accordance with sections 21-
72(c), 21-73(c), and 21-77.
(k) Operative date. Upon the approval by the majority of the voters of the city at the
November 4, 2014 general election, the taxes imposed by this article shall become
operative and shall be applied by the collector upon all marijuana
collectives/cooperatives.
(l) Operative date of increased or decreased gross receipts tax rate. The gross receipts
tax set initially at a rate of five (5) percent pursuant to subsection (b)(1) [(Ordinance
No. NS-2864, Section 5, adopted 12-9-14)] and increased to a rate of six (6) percent
Ordinance No. NS-XXX
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effective January 1, 2018, pursuant to subsection (b)(3) [(Ordinance No. NS-2930,
Section 8, adopted 11-21-17)], shall be decreased to a rate of five (5) percent
effective January 1, 2023, pursuant to subsection (b)(4) [(Ordinance No. NS-XXXX,
Section 8, adopted XX-XX-XX)].
(m) Notwithstanding the tax rates imposed herein under subsection (l), the City Council
may, in its discretion, at any time by resolution, implement any lower or higher tax
rate it deems appropriate, not to exceed the maximum rate established by
subsections (b)(2).
Section 9. Section 21-133 of Article XIII of Chapter 21 of the Santa Ana Municipal
Code is hereby amended to read in full as follows:
Sec. 21-133. Commercial cannabis businesses—Annual business license tax
assessment.
Every person engaged in a “commercial cannabis business” or “commercial
cannabis activity” shall pay an annual business license tax as outlined below. This Article
shall not apply, except with respect to medical marijuana cooperatives/collectives (also
referred to as medicinal commercial cannabis medicinal retail businesses) which are
vertically and/or horizontally integrated with commercial cannabis businesses, to medical
marijuana cooperatives/collectives which are governed by Article XII of this Chapter, or
to personal cultivation as defined in section 40-101(b) of this Code.
(a) For each branch establishment or separate property location of a commercial
cannabis business transacted and carried on in the city, and for each separate type
of commercial cannabis business conducted at the same location, the higher of the
two (2) following tax rates shall be due to the City for each monthly reporting period:
(1) Up to ten percent (10%) of each dollar of gross receipts received or
generated for each monthly reporting period.
(2) Up to $35.00 per square foot (annual tax rate) prorated monthly to one-
twelfth (1/12th) of the annual tax rate amount.
(b) These tax rates shall not be adjusted for inflation pursuant to section 21-121 of this
Chapter.
(c) Notwithstanding the tax rates imposed herein under subsection (a), the City Council
may, in its discretion, at any time by resolution, implement any lower tax rate it
deems appropriate, and may by resolution increase such tax rate from time to time,
not to exceed the maximum rates established by subsection (a).
(d) As of the operative date of this Article, the business license gross receipts tax rates
and square footage tax rates application to specific commercial cannabis business
activities have been established by city ordinance [(Ordinance No. NS-2962,
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Section 2 (Exhibit A-1), adopted 11-6-18; and Ordinance No. NS-2972, Section 7,
adopted 9-3-19)] and by the following resolutions as referenced herein below in
subsections (s), (t), and (u).
Commercial Cannabis Business Activity Gross Receipts
Tax Rate
Gross Square
Footage Tax
Rate
Adult-use Cannabis Retail Business (including Delivery)
(effective beginning December 21, 2018 through
December 31, 2022)
8% $ 25.00
Adult-use Cannabis Retail Business (including Delivery,
but not including Consumption Lounge and Temporary
Consumption and/or Special Events) (effective beginning
January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business (including Delivery
and Consumption Lounge)
(effective beginning January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business (Temporary
Consumption and/or Special Events)
(effective beginning January 1, 2023)
7% $ 0.00
Qualified Social Equity Adult-use Cannabis Retail Business
(including Delivery and Consumption Lounge)
(effective beginning January 1, 2023)
5% $ 25.00
Qualified Social Equity Adult-use Cannabis Retail Business
(Temporary Consumption and/or Special Events)
(effective beginning January 1, 2023)
5% $ 0.00
Cultivation
(effective December 21, 2018 through December 31,
2022)
6% $ 10.00
Cultivation
(effective beginning January 1, 2023) 1% $ 7.00
Distribution
(effective December 21, 2018 through December 31,
2022)
6% $ 4.00
Distribution
(effective beginning January 1, 2023) 1% $ 3.00
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With respect to commercial cannabis businesses not having a fixed place of
business within the city but conducting regular, non-incidental commercial cannabis
business activities within the city, such businesses shall be subject to the gross
receipts tax rate(s) pursuant to this Article based on the category/categories of
commercial cannabis activity conducted. However, such out-of-town commercial
cannabis businesses shall not be subject to any gross square footage tax rate(s).
(e) As part of the annual gross receipts/square footage tax(es) imposed by this Article,
each commercial cannabis business located within the city shall pay a minimum
Manufacturing
(effective December 21, 2018 through December 31,
2022)
6% $ 10.00
Manufacturing
(effective beginning January 1, 2023) 1% $ 3.00
Shared Manufacturing
(effective beginning January 1, 2023) 1% $ 0.00
Microbusinesses
(Tax rates apply proportionally to microbusiness’ activities
corresponding to Adult-use Retail [Adult-use Retail
(including Delivery)] / Cultivation / Manufacturing /
Distribution)
(effective October 4, 2019 through December 31, 2022)
Adult-use Retail
8%
Cultivation,
Distribution &
Manufacturing
6%
Adult-use Retail
$ 25.00
Cultivation &
Manufacturing
$ 10.00
Distribution
$ 4.00
Microbusinesses
(Tax rates apply proportionally to microbusiness’ activities
corresponding to Adult-use Retail [Adult-use Retail
(including Delivery, but not including Consumption Lounge
and Temporary Consumption and/or Special Events)] /
Cultivation / Manufacturing / Distribution)
(effective beginning January 1, 2023)
Adult-use Retail
7%
Cultivation,
Distribution &
Manufacturing
1%
Adult-use Retail
$ 25.00
Cultivation
$ 7.00
Distribution &
Manufacturing
$ 3.00
Testing Facility or Testing Laboratory
(effective December 21, 2018 through June 30, 2019) 5% $ 1.50
Testing Facility or Testing Laboratory
(effective July 1, 2019) 1% $ 1.50
Ordinance No. NS-XXX
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basic rate of two thousand dollars ($2,000.00) annually for each branch
establishment or separate property location of the commercial cannabis business
transacted and carried on in the city, and for each separate type of commercial
cannabis business conducted at the same location. Commercial cannabis
businesses having no fixed place of business within the city shall be exempted from
this requirement. Provided, however, as follows:
(1) that commercial cannabis microbusinesses shall pay a minimum basic rate of
two thousand dollars ($2,000.00) annually for each branch establishment or
separate property location of the commercial cannabis business transacted
and carried on in the city, but not for each separate type of commercial
cannabis business conducted at the same location; and
(2) that City licensed commercial cannabis retail businesses which are also
licensed by the City for adult-use cannabis retail business (temporary
consumption and/or special events), or socially equitable adult-use cannabis
retail business (temporary consumption and/or special events) shall pay a
minimum basic rate of two thousand dollars ($2,000.00) annually for each
branch establishment or separate property location of the commercial
cannabis business transacted and carried on in the city, but not for each
separate type of commercial cannabis retail business conducted at the same
location; and
(3) that whenever in the discretion of the Collector, for the purposes of more fully
achieving the intent of this Article, or to more efficiently and equitably
administer the provisions of this Article, additional administrative commercial
cannabis business licenses are required to allow the for the recognition of fee-
exempt activities, or to allow for the separate accounting and apportionment
of one or more taxable endeavors relating to sub-activities incorporated within
a consolidated commercial cannabis tax activity under subsection (d), then the
Collector shall require that the affected commercial cannabis business obtain
such administrative license(s), and in the case of taxable activities, separately
report and pay the applicable gross receipts tax(es) due under the
consolidated commercial cannabis tax activity to which said administrative
license(s) relate. In such case, the minimum basic rate of two thousand dollars
($2,000.00) annually per license, shall not be applied, however, such
administrative license(s) are subject to all other requirements under this
Chapter, including all applicable licensing charges and service fees.
(f) In the event the City should in the future permit additional categories of commercial
cannabis business activity, as may from time to time be licensed by the State of
California, such categories of commercial cannabis activities shall be subject to the
same maximum tax rates as imposed herein. The City may by ordinance of the City
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Council initially set the required gross receipts/gross square footage tax rates based
on category of cannabis business activity at lesser rates as may be deemed
appropriate by the City Council.
(g) For purposes of this Article, a commercial cannabis business is not considered to
be a business or person having a “specified exemption” or “specified exclusion” from
business license taxation as set forth in sections 21-48 and 21-49 of this Chapter.
(h) For purposes of this Article any person claiming an exemption from the gross
receipts tax rate component of the combined gross receipts/square footage tax
imposed under this Article on the basis of a claim of being a qualified "nonprofit
organization" shall have the burden of substantiating their claim to the same extent
and in the same manner as a marijuana collective/cooperative in accordance with
section 21-127(a)(6) of this Chapter.
(i) Cannabis businesses shall not pass the taxes imposed by this Article through to an
adult-use cannabis retail business customer or commercial cannabis business
customer in any fashion except as part of the basic product sales and/or service
price.
(j) Definitions. For purposes of this Article, the following terms have the following
meanings:
(1) “Adult-Use cannabis retail business” as defined in section 40-2(4) of this
Code.
(2) “Commercial Cannabis Activity” as defined in section 40-2(9) of this Code.
(3) “Commercial cannabis business” as defined in section 40-2(10) of this
Code excluding medical marijuana collectives/cooperatives also referred
to as medicinal cannabis retail sales.
(4) “Commercial cannabis adult-use retail business” as defined in section 40-
2(39.4).
(5) “Consumption Lounge” as defined in section 40-2(39.1) of this Code.
(6) “Cultivation” as defined in section 40-2(11) of this Code.
(7) “Delivery” as defined in section 40-2(13) of this Code.
(8) “Distribution” as defined in section 40-2(16) of this Code.
(9) "Gross receipts" – section 21-3 of this Chapter notwithstanding, “gross
receipts” for the purposes of this Article shall mean:
(A) Transfer of title or possession, exchange or barter, conditional or
otherwise, in any manner or by any means whatsoever, of tangible
personal property for a consideration including any monetary
Ordinance No. NS-XXX
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consideration for cannabis, including, but not limited to, membership
dues, reimbursements provided by members, regardless of form, or
the total amount of cash or in-kind contributions, including all
operating costs related to the growth, cultivation, manufacturing,
distribution, testing, or provision of cannabis or any transaction
related thereto.
(B) Anything else of value obtained by an a cannabis business;
(C) The total amount of the sale price of all sales and services;
(D) The total amount charged or received for the performance of any act,
service or employment of whatever nature it may be, whether or not
such service, act or employment is done as a part of or in connection
with the sale of goods, wares, or merchandise (whether at wholesale
or retail), for which a charge is made or credit allowed, including all
refunds, cash credits and properties of any amount or nature;
(E) Any amount for which credit is allowed by the seller to the purchaser
without any deduction therefrom, on account of the cost of the
property sold, the cost of materials used, the labor or service cost,
interest paid or payable, losses, or any other expense whatsoever;
provided that cash discounts allowed or payment on sales shall not
be included;
(F) The amount of any federal manufacturer's or importer's excise tax
included in the price of property sold, even though the manufacturer
or importer is also the retailer thereof;
(G) The amount of any California state cannabis excise tax or state
cannabis cultivation tax included in the price of the product;
(H) “Gross receipts" shall not include the following:
i. The amount of any federal tax imposed on or with respect to retail
or wholesale sales or the sale of services whether imposed upon
the cannabis business or the consumer whenever the amount of
federal tax is authorized by law to be stated and passed through
to customers as a separate charge.
ii. Any California state, county, or city sales or use tax, including any
add-on, district, or transaction and use tax, required by law to be
included in or added to the purchase price and collected from the
consumer or purchaser, or such part of the sales price of any
property previously sold and returned by the purchaser to the
seller which is refunded by the seller by way of cash or credit
Ordinance No. NS-XXX
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allowances given or taken as part payment on any property so
accepted for resale; or
iii. The amount of the sale price of business personal property (all
property owned or leased by a cannabis business operator used
in the operation cannabis business activities, including but not
limited to: furniture, fixtures, and business equipment); real
property, including land, buildings and other improvements.
iv. The amount of equity contributions, investments, and/or loan
proceeds to cannabis business’ operation, and/or proceeds from
the sale or transfer of cannabis business’ retail or commercial
cannabis business.
v. The amount of interparty sales and/or transfers of goods within a
single vertically and/or horizontally integrated cannabis business,
where the sales or transfers goods are between two or more
commercial cannabis business licensees (excluding testing
facilities or testing laboratories), or one or more said commercial
cannabis business licensee(s) and one or more medicinal
cannabis retail business licensee(s), as set forth in accordance
with section 21-131.2 and/or section 21-142.
(I) ”Gross receipts" shall be calculated without any deduction on
account of any of the following:
i. The cost of tangible or intangible property sold or bartered;
ii. The cost of materials or products used, labor or service cost,
interest paid, losses, or other expense;
iii. The cost of transportation of cannabis, or other property or
product;
iv. The amount of any federal or state income or franchise
taxes; and
v. Any other business costs or expenses, unless otherwise
specifically exempted.
(10) “Gross square foot” or “gross square footage” for the purposes of this
Article shall mean:
(A) In the case of commercial cannabis businesses licensed by the state
to engage in an adult-use cannabis retail business, the gross number
of square feet comprising the adult-use cannabis retail property
location as confirmed by the corresponding “approved building set”
or “approved certificate of occupancy” on file with the City of Santa
Ordinance No. NS-XXX
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Ana Planning and Building Agency, whichever is the greater of any
square footage indicated, whether such adult-use cannabis retail
business is part of an on-site vertically or horizontally integrated
cannabis business or not.
(B) In the case of commercial cannabis businesses licensed by the state
to engage in cultivation, the aggregate number of square feet
comprising all areas of the premises under “canopy”, whether such
sum is greater or lesser than the gross square footage as stated in
the “approved building set” or “approved certificate of occupancy”,
and whether such commercial cannabis cultivation business is part
of an on-site vertically integrated cannabis business or not.
“Canopy” shall mean the designated area(s) of a premise that will
contain mature plants at any point in time. Canopy shall be calculated
in square feet and measured using clearly identifiable boundaries of
all area(s) that will contain mature plants at any point in time,
including all of the space(s) within the boundaries. Canopy may be
noncontiguous, but each unique area included in the total canopy
calculation shall be separated by an identifiable boundary which
includes interior walls, shelves, greenhouse walls, hoop house walls,
garden benches, hedgerows, fencing, garden beds, or garden plots;
and if mature plants are being cultivated using a shelving system, the
surface area of each level shall be included in the total canopy
calculation.
Canopy shall be subject to independent measurement and
calculation by duly authorized employees or agents of the City at the
time of application for a Santa Ana Business License and annually
thereafter at the time of the renewal of such license, or more often
as may be deemed necessary in the discretion of the collector.
Whenever an independent canopy measurement and calculation is
required under the terms of this Article or whenever the collector in
his or her discretion determines that the independent measurement
and calculation of a licensee’s canopy is desirable to effectuate the
proper assessment or collection of the business license taxes
required to be paid under the terms of this Chapter, or for any other
purposes related to the express aims of this Article then a canopy
measurement shall be performed and a corresponding service fee
shall be applicable in the amount as specified by resolution of the
City Council.
(C) In the case of commercial cannabis businesses licensed by the state
to engage in distribution or manufacturing and that are not occupying
Ordinance No. NS-XXX
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the same premises with another cannabis business, the gross
number of square feet as confirmed by the corresponding “approved
building set” or “approved certificate of occupancy” on file with the
City of Santa Ana Planning and Building Agency, whichever is the
greater of any square footage indicated.
(D) In the case of commercial cannabis businesses licensed by the state
to engage in distribution or manufacturing and occupying the same
premises with another cannabis business, the gross number of
square feet allocated by the commercial cannabis business
owner/operator respectively for either distribution use or for
manufacturing use, whether the combined sum of all uses is less
than, equal to, or greater than the gross square footage as stated in
the “approved building set” or “approved certificate of occupancy”.
The number of square feet allocated (“Allocated Square Footage”)
shall be subject to independent measurement and calculation by duly
authorized employees or agents of the City at the time of application
for a Santa Ana Business License and annually thereafter at the time
of the renewal of such license, or more often as may be deemed
necessary in the discretion of the collector. Whenever an
independent allocated square footage measurement and calculation
is required under the terms of this Article or whenever the collector
in his or her discretion determines that the independent
measurement and calculation of a licensee’s allocated square
footage is desirable to effectuate the proper assessment or collection
of the business license taxes required to be paid under the terms of
this Chapter, or for any other purposes related to the express aims
of this Article then an Allocated Square Footage measurement shall
be performed and a corresponding service fee shall be applicable in
the amount as specified by resolution of the City Council.
(E) In the case of commercial cannabis businesses licensed by the state
to engage in testing facilities or testing laboratory businesses, the
gross number of square feet comprising such commercial cannabis
business’ property location as confirmed by the corresponding
“approved building set” or “approved certificate of occupancy” on file
with the City of Santa Ana Planning and Building Agency, whichever
is the greater.
(11) “Manufacturing” as defined in section 40-2(22) of this Code.
(12) “Microbusiness” as defined in section 40-2(24) of this Code.
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(13) “Consumption Lounge” as defined in section 40-2(39.1) of this Code.
(14) “Qualified Social Equity Adult-use Cannabis Retail Business” as set out in
section 40-16 of this Code. To include: “Socially Equitable Adult-use
Cannabis Retail Business (including Delivery and Consumption
Lounges)”, and “Socially Equitable Adult-use Cannabis Retail Business
Temporary Consumption and/or Special Events)”.
(15) “Retail business” as defined in section 40-2(39) of this Code.
(16) “Shared manufacturing” as defined in section 40-2(22.5) of this Code.
(17) “Temporary Consumption Event” and “Temporary Consumption Festival”
as defined in section 40-2(39.2 and 39.3) of this Code.
(18) “Testing Facility” or “Testing Laboratory” as defined in section 40-2(43) of
this Code.
(19) “Wholesale" as defined in section 40-2(44) of this Code.
(k) Modification, repeal or amendment. The City Council may repeal the ordinance
codified in this Article, or amend it in a manner which does not result in an increase
in the tax or taxes imposed herein, without further voter approval. The City Council
may likewise by ordinance adopt and add additional provisions to any other Article
of this Chapter and relate them to this Article, or amend any existing provisions of
any Article of this Chapter as they may already relate to this Article in any manner
which does not result in an increase in the tax or taxes imposed herein, without
further voter approval. If the City Council repeals said ordinance or any provision of
this Article, it may subsequently reenact it without voter approval, as long as the
reenacted ordinance or section does not result in an increase in the tax or taxes
imposed herein.
(l) Administration—Rules, regulations and guidelines. In order to aid in the city's
collection of taxes due under this Article and to ensure that all commercial cannabis
businesses are taxed consistently to the best of the city's ability, the collector, with
the concurrence of the city attorney, may promulgate rules, regulations, and
guidelines, to implement and administer this Article including, but not limited to rules,
regulations, and guidelines harmonizing other provisions of this Chapter with the
provisions of this Article in any manner not inconsistent with the intent of this Article
and which does not result in an increase in the tax or taxes imposed herein. The
collector may also, with the concurrence of the city attorney, interpret or clarify the
methodology of the tax, or any definition applicable to the tax, so long as such
interpretation or clarification (even if contrary to some prior interpretation or
clarification) is not inconsistent with the language of this Article.
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(m) Occasional transactions—Exemptions.
(1) The provisions of this Article shall not apply to persons having no fixed
place of business within the city who come into the city for the purpose
of transacting a specific item of commercial cannabis business at the
request of a specific client or customer, incidental to a commercial
cannabis business principally established elsewhere, provided that such
person does not come into the city for the purpose of transacting such
business on more than three (3) days during any calendar year.
(2) For any person not having a fixed place of business within the city who
comes into the city for the purpose of transacting commercial cannabis
business activities, the business license tax(es) payable by such person
may be apportioned by the collector in accordance with this Chapter.
(n) Reporting and remittance.
(1) Beginning as set forth in subsection (r) below, and monthly thereafter,
each commercial cannabis business required to pay a tax or taxes based
on gross receipts under this Article (except qualified nonprofit
organizations exempt from taxes measured by income or gross receipts),
shall report to the city any gross receipts received during the preceding
monthly reporting period. In addition, each cannabis business (including
qualified nonprofit organizations) required to pay a tax or taxes based on
square footage shall report to the city the gross square footage of the
cannabis business’ property location. Every cannabis business shall then
compute the business license taxes at both the gross receipts rate and
the gross square footage rate - prorated monthly to one-twelfth (1/12th) of
the annual tax rate amount - and shall then remit to the city the amount of
the higher of the two tax calculations due and owing during said period in
accordance with section 21-133, subsection (d). In the case of a qualified
nonprofit organization only the gross square footage computation shall be
made and the amount of such calculation shall represent the amount due
and owing during said period. All reporting and remitting made shall be
done in accordance with instructions from the collector and shall be made
using forms provided or approved by the collector.
(2) For purposes of this section, month shall mean calendar month and shall
include any fraction of a month. Taxes shall begin to accrue on the date
that a person or entity first receives a business license or other city permit
to operate as a commercial cannabis business or upon the operative date
of this Article should a person or entity already possess a commercial
cannabis business license or other city permit to operate as a commercial
cannabis business.
Ordinance No. NS-XXX
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(3) The payment of the two thousand dollars ($2,000.00) minimum basic rate
gross receipts tax required annually for each separate branch location or
separate property location of the business in accordance with this section,
shall be made annually prior to the beginning of the fiscal year beginning
April first of the current year and expiring on the 31st day of March of the
following year. In the case of a new commercial cannabis business the
minimum basic rate gross receipts tax shall be paid in advance prior to
any new business activity being undertaken. Every new licensee shall pay
in advance an amount equal to one-quarter (¼) of the annual minimum
basic rate gross receipts tax, for each quarter and fraction of a quarter
remaining during the period for which the new license is issued.
(o) Delinquent date—Penalty. Any individual or entity who fails to pay the taxes required
by this Article when due shall be subject to penalties and interest as set forth in
accordance with this Chapter. The collector is not required to send a delinquency or
other notice or bill to any person subject to the provisions of this Article and failure
to send such notice or bill shall not affect the validity of any tax or penalty due under
the provisions of this Article.
(p) Business license tax certificate/receipt—Required. There are imposed upon all
persons engaged in transacting and carrying on any commercial cannabis business
activity in the city taxes in the amounts prescribed in this Article. It shall be unlawful
for any person, either for him or herself or for any other person, to commence,
transact or carry on any business in the city without first having procured a business
license from the city under this Chapter and having paid the taxes set forth in this
Article, and without complying with any and all applicable provisions contained in
this Chapter. The carrying on of any commercial cannabis business activity without
complying with all the provisions of this Article shall constitute a separate violation
of this Chapter for each and every day that such commercial cannabis activity is so
carried on.
(q) Classification of business license assessment type—Term and renewal. The
business license issued to commercial cannabis businesses shall be classed as a
gross receipts assessment type, issued for the same term of license as set forth in
subsection 21-71(c) of this Chapter and shall be subject to renewal in accordance
with sections 21-72(c), 21-73(c), and 21-77.
(r) Operative date. Upon the approval by the majority of the voters of the city at the
November 6, 2018 general election, the taxes imposed by this Article shall become
operative and shall be applied by the collector upon all commercial cannabis
businesses.
(s) Operative date of decreased gross receipts tax rate (Testing Facilities or Testing
Laboratories). The gross receipts tax set initially at a rate of five (5%) percent for
testing facilities or testing laboratories pursuant to subsection (d) above shall be
Ordinance No. NS-XXX
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decreased to a rate of one (1%) percent by resolution of the City Council [Santa Ana
City Council Resolution No, 2019-068] as hereinabove provided for in accordance
with subsection (c), which reduced rate, under the terms of said City Council
resolution, shall become retroactively effective July 1, 2019.
(t) Operative date of decreased gross receipts tax rate (Cultivation, Manufacturing, and
Distribution, Adult-use Cannabis Retail Business (including Delivery and
Consumption Lounges), Adult-use Cannabis Retail Business (Temporary
Consumption and/or Special Events). The gross receipts tax set initially at a rate of
six (6%) percent for cultivation, manufacturing, and distribution pursuant to
subsection (d) above shall be decreased to a rate of one (1%) percent, and the gross
receipts tax rate set initially at a rate of eight (8%) for all adult-use cannabis retail
business (including delivery) activities pursuant to subsection (d) above shall be
decreased to seven (7%) percent to include the sub-activity of consumption lounges,
and the ancillary adult-use cannabis retail business (temporary consumption and/or
special events) activity; the parallel activities of social equity adult-use cannabis
retail business (including delivery and consumption lounge), and the ancillary social
equity adult-use cannabis retail business (temporary consumption and/or special
events) activity are set at a reduced five (5%) percent, by resolution of the City
Council [Santa Ana City Council Resolution No, 2022-XXX] as hereinabove provided
for in accordance with subsection (c), which reduced rates, under the terms of said
City Council resolution, shall become effective January 1, 2023.
(u) Operative date of decreased square footage tax rate (Cultivation, Manufacturing,
Distribution, Adult-use Cannabis Retail Business (Temporary Consumption and/or
Special Events), Qualified Social Equity Adult-use Cannabis Retail Business
(Temporary Consumption and/or Special Events). The square footage tax set
initially at a rate of ten ($10) dollars per square foot for cultivation and manufacturing,
and four ($4) dollars per square foot for distribution pursuant to subsection (d) above
shall be decreased to a rate of seven ($7) dollars per square foot for cultivation,
three ($3) dollars per square foot for manufacturing, three ($3) dollars per square
foot for distribution; and to a rate of zero ($0) dollars per square foot for shared
manufacturing, adult-use cannabis retail business (temporary consumption and/or
special events), and qualified social equity adult-use cannabis retail business
(temporary consumption and/or special events) by resolution of the City Council
[Santa Ana City Council Resolution No, 2022-XXX] as hereinabove provided for in
accordance with subsection (c), which reduced rates, under the terms of said City
Council resolution, shall become effective January 1, 2023.
(v) Notwithstanding the tax rates imposed herein under subsections (d),(s),(t), and (u),
the City Council may, in its discretion, at any time solely by resolution, implement
any lower or higher tax rate it deems appropriate, not to exceed the maximum rates
established by subsection (a).
Ordinance No. NS-XXX
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Section 10. Section 21-135 of Article XIII of Chapter 21 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 21-135. - Single property location; multiple state licenses; separate city
business licenses.
Sections 21-7, 21-8, and 21-9 of this chapter notwithstanding, separate city business
licenses, issuable to commercial cannabis businesses pursuant to this article, shall be
required for each separate type of commercial cannabis business activity transacted and
carried on at a single city property location for which a commercial cannabis business
may seek licensure by the state, or for which a state license has been approved or issued.
Provided, however, that commercial cannabis business activity transacted and carried on
at a single city property location for which a commercial cannabis business may seek
licensure by the state as a microbusiness, or for which a state license has been approved
or issued as a microbusiness, shall in such case be required to obtain a separate city
business license business for each of the commercial cannabis activities transacted and
carried on.
Section 11. If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision of any
court of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this ordinance. The City Council of the City of Santa Ana hereby declares that
it would have adopted this ordinance and each section, subsection, sentence, clause,
phrase or portion thereof irrespective of the fact that any one or more sections,
subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
Section 12. This Ordinance shall become effective January 1, 2023.
Section 13. The Clerk of the Council shall certify the adoption of this ordinance
and shall cause the same to be published as required by law.
ADOPTED this _______ day of ___________, 2022.
________________________________
Vicente Sarmiento
Mayor
Ordinance No. NS-XXX
Page 68 of 68
APPROVED AS TO FORM
Sonia R. Carvalho, City Attorney
By: _________________________
John M. Funk
Chief Assistant City Attorney
AYES: Councilmembers: __________________________________
NOES: Councilmembers:__________________________________
ABSTAIN: Councilmembers: _________________________________
NOT PRESENT: Councilmembers: _________________________________
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, _____________, Clerk of the Council, do hereby attest to and certify that the
attached Ordinance No. NS-______ to be the original ordinance adopted by the
City Council of the City of Santa Ana on ________________, 2022 and that said
ordinance was published in accordance with the Charter of the City of Santa Ana.
Date: ______________________ ________________________________
Clerk of the Council
City of Santa Ana
Ordinance No. NS-XXX
Page 1 of 68
ORDINANCE NO. NS-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA READOPTING AND AMENDING CERTAIN
SECTIONS OF ARTICLE XIII OF CHAPTER 18 OF THE
SANTA ANA MUNICIPAL CODE PERTAINING TO
MEDICINAL MARIJUANA RETAIL AND CHAPTER 40 OF
THE MUNICIPAL CODE PERTAINING TO COMMERCIAL
CANNABIS BUSINESSES TO MODIFY ZONING
REQUIREMENTS; ALLOW AND REGULATE RETAIL
FACILITY RELOCATION, CANNABIS CONSUMPTION
LOUNGES, AND TEMPORARY CONSUMPTION EVENTS
AND FESTIVALS; AND AMEND BACKGROUND CHECK
AND BADGE REQUIREMENTS; AND AMENDING CERTAIN
SECTIONS OF ARTICLES XII AND XIII OF CHAPTER 21 OF
THE SANTA ANA MUNICIPAL CODE PERTAINING TO THE
TAX TREATMENT OF COMMERCIAL CANNABIS
MICROBUSINESSES AND SHARED MANUFACTURING
BUSINESSES TO REDUCE THE TAX RATES FOR
MEDICINAL CANNABIS RETAIL, COMMERCIAL
CANNABIS RETAIL, CULTIVATION, DISTRIBUTION, AND
MANUFACTURING / SHARED MANUFACTURING AND TO
ADOPT SEPARATE TAX RATE CATEGORIES AND TAX
RATES FOR COMMERCIAL CANNABIS ADULT-USE
CONSUMPTION LOUNGES, AND TEMPORARY
CONSUMPTION EVENTS AND FESTIVALS, AND FOR
QUALIFIED SOCIAL EQUITY OPERATORS
THE CITY COUNCIL OF THE CITY OF SANTA ANA HEREBY ORDAINS AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines and
declares as follows:
A. On November 4, 2014, Santa Ana voters approved Santa Ana’s Medical
Marijuana Regulatory Program ordinance (“Measure BB”) which was codified in
Chapters 18 and 21 of the Santa Ana Municipal Code. Such regulations govern
medicinal marijuana and the retail sale thereof.
B. In 2015, the Governor signed into law Senate Bill 643, Assembly Bill 266,
and Assembly Bill 243, collectively referred to as the Medical Marijuana Regulation
and Safety Act, further amended in 2016 as the Medical Cannabis Regulation and
Safety Act, which established regulations and a state licensing system for medical
cannabis cultivation, manufacturing, delivery, and dispensing.
Ordinance No. NS-XXX
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C. In November 2016, the voters of the State of California approved
Proposition 64, the California Marijuana Legalization Initiative, also known as the Adult
Use of Marijuana Act.
D. In 2017, the Governor signed into law Senate Bill 94 also known as
Medicinal and Adult-Use Cannabis Regulation and Safety Act.
E. On November 9, 2017, the City Council created Chapter 40 of the Santa
Ana Municipal Code (Ordinance No. NS-2929), allowing adult-use commercial
cannabis retail businesses in the city, and amended certain sections of Chapters 18
and 21 of the Santa Ana Municipal Code to ensure consistency with State law and
Chapter 40.
F. Since November 2014, the City of Santa Ana has permitted the retail sale
of cannabis for medicinal purposes and since January 2018 for adult-use purposes.
On March 20, 2018, the City Council adopted Ordinance NS-2941 and NS-2942,
allowing and regulating commercial cannabis testing laboratories.
G. On April 17, 2018, the City Council adopted Ordinance NS-2944 allowing
and regulating commercial cannabis cultivation, distribution, and manufacturing
activities.
H. On November 6, 2018, the voters of the City of Santa Ana approved
Measure Y (Ordinance NS-2962), establishing a tax on commercial cannabis business
activities except medicinal cannabis retail sales, which continue to be subject to taxes
under Measure BB.
I. On September 3, 2019, the City Council adopted Ordinances NS-2972 and
NS-2973 amending certain sections of chapters 18, 21, and 40 of the Santa Ana
Municipal Code allowing vertical and horizontal integration of cannabis businesses;
updating ownership transfers procedural standards and requirements, security
deposits, and various administrative processes; updating and streamlining regulatory
components; reducing cannabis testing taxes to the greater amount of one (1%)
percent of gross receipts or one and one-half ($1.50) dollars per square foot; and
adopting a canopy measurement and square footage allocation service fee.
J. The State of California continues to update its regulations on commercial
cannabis business licensing, resulting in the need for local jurisdictions to update and
amend local commercial cannabis ordinances from time to time.
K. It is the desire of the City Council to combine and unify the regulations for
medicinal cannabis retail and all other types of commercial cannabis business
activities, currently contained in Chapters 18 and 40 of the Santa Ana Municipal Code,
respectively, for clarity and cohesion.
Ordinance No. NS-XXX
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L. The City Council recognizes those entities that have remained on the
Medicinal Cannabis Waitlist pursuant to Santa Ana Municipal Code Section 40-104,
and those entities that were scored as part of the merit-based selection process in
Section 40-9.
M. Commercial cannabis businesses form an integral part of the Santa Ana
economy, contributing revenues and community benefits through business
engagement with the Santa Ana community.
N. The City Council of the City of Santa Ana intends that nothing in this article
shall be deemed to conflict with federal law as contained in the Controlled Substances
Act, nor to otherwise permit any activity that is prohibited under that Act or other
applicable law.
O. The City of Santa Ana has a compelling interest in ensuring that cannabis
is not sold, cultivated, manufactured, tested, consumed, or distributed in an illicit
manner, in protecting the public health, safety and welfare of its residents and
businesses, in preserving the peace and quiet of the neighborhoods in which these
uses may operate, and in providing access of cannabis to residents.
P. The City Council has held a duly noticed public hearing on September 20,
2022 in connection with consideration and adoption of this ordinance, during which
comments were provided by the City Council and members of the public on additional
retail storefronts, reduction of retail tax rates, community benefits and social equity,
the map of commercial cannabis eligible areas, and priority processing for commercial
cannabis consumption lounges that opt in to social equity measures.
Q. The resulting changes to this Ordinance were presented to the City Council
for second reading on October 4, 2022.
Section 2. This Ordinance is adopted pursuant to the authority granted by the
California Constitution and State law, including but not limited to: Article XI, Section 7 of
the California Constitution, the Compassionate Use Act of 1996 (California Health and
Safety Code Section 11362.5), the Medical Marijuana Program (California Health and
Safety Code Section 11362.7 et seq.), the Medical Marijuana Regulation and Safety Act
(AB 266, AB 243, and SB 643; hereafter “MMRSA”), the Adult Use of Marijuana Act
(Proposition 64), and the Medical and Adult Use Cannabis Regulation and Safety Act (SB
94; hereafter “MAUCRSA”).
Section 3. Pursuant to the California Environmental Quality Act (“CEQA”) and
the State CEQA Guidelines, the adoption of this ordinance is exempt from CEQA review
pursuant to California Code of Regulations section 15061(b)(3), which is applicable if it
can be seen with certainty that there is no possibility that the project may have a
significant effect on the environment. Santa Ana is a built-out, urbanized community, and
Ordinance No. NS-XXX
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the uses permitted and regulated by this Ordinance are already allowed by the underlying
zoning designations and the development standards in Chapter 41 (Zoning) of the Santa
Ana Municipal Code. The uses permitted and regulated by this ordinance will not lead to
any cumulative or unforeseen impacts. As a result, a Notice of Exemption will be filed
upon the adoption of this ordinance.
Section 4. All provisions of the Santa Ana Municipal Code which are repeated
herein are repeated solely in order to comply with the provisions of Section 418 of the
City Charter. Any such restatement of existing provisions of the Code is not intended,
nor shall it be interpreted, as constituting a new action or decision of the City Council, but
rather such provisions are repeated for tracking purposes only in conformance with the
Charter.
Section 5. The title of Chapter 40 of the Santa Ana Municipal Code is hereby
amended to read in its entirety as follows:
Chapter 40 - REGULATION OF COMMERCIAL CANNABIS BUSINESS
ACTIVITIES
Section 6. Article I of Chapter 40 of the Santa Ana Municipal Code is hereby
amended to read in its entirety as follows:
Sec. 40-1. Purpose, intent, and community benefits required.
A. The purpose and intent of this article is to regulate commercial cannabis business
activities, as defined in this article, in order to ensure the health, safety and welfare of
the residents of the City of Santa Ana by establishing regulations necessary for
commercial cannabis business operating in the City of Santa Ana to obtain and
maintain a Regulatory Safety Permit ("RSP"). Any commercial cannabis businesses
operating in the City of Santa Ana shall at all times be in compliance with current State
Law and this article. All commercial cannabis facilities shall operate in accordance
with the regulations in this article and with the conditions of approval associated with
the applicable zone for the parcel of real property upon which the commercial
cannabis activities are conducted. Any commercial cannabis business shall qualify for
and receive a Regulatory Safety Permit from the City of Santa Ana as provided by this
article and operate only in a zone in compliance with Santa Ana Municipal Code before
commencing with any commercial cannabis business activity. Any commercial
cannabis business without a Regulatory Safety Permit is in violation of this article. The
regulations in this article, in compliance with the Compassionate Use Act, the
Medicinal Marijuana Program Act, SB 94, AB 133, Proposition 64, and the California
Health and Safety Code (collectively referred to as "State Law") do not interfere with
the right to use adult-use cannabis or medicinal cannabis as authorized under State
Law, nor do they criminalize the possession of cannabis as authorized under State
Law.
Ordinance No. NS-XXX
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B. Any person operating a medicinal marijuana collective/cooperative (as defined in
Article II of this Chapter) as of December 14, 2017, or who has a RSP application
pending to operate a medicinal collective/cooperative, and has met all of the
requirements of Article II, shall be allowed to apply for a Regulatory Safety Permit for
the sale of Adult-Use cannabis.
C. Community Benefits, Sustainable Business Practices, and Social Equity Plan
Required.
1. Effective January 1, 2024, all commercial cannabis businesses operating in the
City shall be required to provide community benefits through a Community
Benefits, Sustainable Business Practices, and Social Equity Plan (“Plan”) that
promotes health and sustainability of the community in a format acceptable by the
Executive Director of the Planning and Building Agency or his or her designee as
reviewed and verified from time to time as a component of issuance of a regulatory
safety permit (RSP). By January 1, 2025, all such Plans shall contain provisions
for social equity obligations, as per the approved format established by the City.
2. The Plan shall document each of the business’s commitment to local hiring, local
sourcing, community engagement and contributions, sustainable business
practices, and consideration of social equity goals through paying prevailing
wages, hiring from disadvantaged communities, supporting local non-profit
organizations (NPOs), and job and skills training. The Plan shall quantify the value
of each commitment therein.
3. Documentation of fulfillment of the aforementioned Plan shall be submitted to the
Code Enforcement Division on an annual basis, including as part of a renewal
application for an RSP during the annual renewal process. Said documentation
shall detail said business’s satisfaction of its commitments and shall be evaluated
for satisfaction by the Executive Director of the Planning and Building Agency or
his or her designee. Failure to provide the requested documentation shall result in
a suspension or revocation of an RSP, delay or denial of an RSP renewal
application, as applicable.
4. The Planning and Building Agency may enforce these provisions pursuant to
Section 40-12 of this Chapter, including issuance of warnings, citations, and fines
as authorized by the Santa Ana Municipal Code, and suspension and revocation,
to enforce the commitments in each Plan.
5. Commercial cannabis retailers exempt. The Community Benefits, Sustainable
Business Practices, and Social Equity Plan requirements of Section 40-1(C) shall
not apply to those commercial cannabis retailers in compliance with Section 40-16
of this Chapter.
Sec. 40-2. Definitions.
Ordinance No. NS-XXX
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The definitions are incorporated herein as fully set forth and are applicable to this article.
All definitions are intended to comply with those set forth by the State of California for all
commercial cannabis business activities.
1. "Applicant" means a person who is required to file an application for a permit under
this article, including an individual owner, managing partner, officer of a corporation,
or any other operator, manager, employee, or agent of a commercial cannabis
business. "Adult-Use" means cannabis or cannabis products that are intended to be
used for non-medicinal purposes by a person twenty-one (21) years of age or older.
3. "Adult-Use Cannabis Retailer Operating Agreement" or "Operating Agreement"
means the agreement entered into by and between the City and the commercial
cannabis business operator which will specify terms for local hiring and sourcing,
community benefit plans, and fees to compensate for authorized impacts on City
services.
4. "Adult-Use cannabis retail business" means an Adult-Use retail business that obtains
a Regulatory Safety Permit and engages in the delivery or sale of Adult-Use cannabis,
or an Adult-Use cannabis product, except as related Business and Professions Code
Section 19319, or Health and Safety Code Sections 11362.1 through 11362.45, as
amended from time to time, excepting medicinal cannabis retail.
5. "Authorized City of Santa Ana representative" means any police officer, city employee,
contractor or agent of the city designated by the director of any city department which
has the authority and responsibility to enforce provisions as set forth in this article.
6. "Business owner" means any of the following:
a) A person with an aggregate ownership interest of twenty (20) percent or more in
the person applying for a license or a licensee, unless the interest is solely a
security, lien, or encumbrance.
b) The chief executive officer of a nonprofit or other entity.
c) A member of the board of directors of a nonprofit.
d) An individual who will be participating in the direction, control, or management of
the person applying for a license.
7. "Cannabis" or "cannabis product" means all parts of the Cannabis sativa Linnaeus,
Cannabis Indica, or Cannabis Ruderalis, whether growing or not; the seeds thereof;
the resin, whether crude or purified, extracted from any part of the plant; and every
compound, manufacture, salt, derivative, mixture, or preparation of the plant, its
seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified,
obtained from marijuana. "Cannabis" also means marijuana as defined by Section
11018 of the California Health and Safety Code as enacted by Chapter 14017 of the
Statutes of 1972. "Cannabis" does not include the mature stalks of the plant, fiber
Ordinance No. NS-XXX
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produced from the stalks, oil or cake made from the seeds of the plant, any other
compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks
(except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the
plant which is incapable of germination. For the purpose of this chapter, "cannabis"
does not mean industrial hemp as that term is defined by Section 81000 of the
California Food and Agricultural Code or Section 11018.5 of the California Health and
Safety Code.
8. "City" means the City of Santa Ana, a charter city and municipal corporation.
9. "Commercial cannabis activity" means the cultivation, possession, manufacture,
distribution, processing, storing, laboratory testing, packaging, labeling,
transportation, delivery or sale of cannabis and cannabis products as provided for this
Chapter. Permitted commercial cannabis activities are listed in Land Use Table 40-5
of this Chapter and are allowed in the Commercial Cannabis Eligible Areas Map as
adopted and modified from time to time by resolution of the City Council.
10. "Commercial cannabis business" means a business that obtains a Regulatory Safety
Permit and engages in the cultivation, possession, manufacture, processing, storing,
laboratory testing, labeling, distribution, delivery, or sale of adult-use cannabis,
medicinal cannabis or an adult-use cannabis or medicinal cannabis product, except
as related Business and Professions Code Section 19319, or Health and Safety Code
Sections 11362.1 through 11362.45, as amended from time to time.
11. "Cultivation" means to plant, grow, harvest, dry, cure, grade or trim cannabis, as
defined by California Business and Professional Code Section 26001, as amended
from time to time.
12. "Customer" means a natural person twenty-one (21) years of age or over.
13. "Delivery" means the commercial transfer of cannabis or cannabis products from a
retail cannabis business to a customer up to an amount determined to be authorized
by the State of California, or any of its departments or divisions. "Delivery" also
includes the use by a retail cannabis business of any technology platform owned,
controlled, and/or licensed by the retail cannabis business, or independently licensed
by the State of California under the State law (as amended from time to time), that
enables anyone to arrange for or facilitate the commercial transfer by a licensed retail
cannabis business of cannabis or cannabis products. For the purposes of this article,
"delivery" does not include distribution or purchase of cannabis from a licensed
cultivator, and cannabis products from a licensed manufacturer, for sale to a licensed
cannabis retail business.
14. "Delivery employee" means an individual employed by a licensed retail cannabis
business who delivers cannabis goods from the permitted retail premises to a
customer at a physical address.
Ordinance No. NS-XXX
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15. "Display" means cannabis goods that are stored in the licensed retail business during
the hours of operation.
16. "Distribution" means the procurement, sale, and transport of cannabis or cannabis
products between Licensees.
17. "Edible cannabis product" means manufactured cannabis that is intended to be used,
in whole or in part, for consumption. An edible cannabis product is not considered food
as defined by Section 109935 of the California Health and Safety Code or a drug as
defined by Section 109925 of the California Health and Safety Code.
18. "Free sample" means any amount of commercial cannabis goods provided to a
purchaser of cannabis without cost or payment or exchange of any other thing of
value.
19. "Labor Peace Agreement" means a legally binding agreement between an employer
and a bona fide labor organization in which the employer agrees to remain neutral in
the event its employees wish to unionize, as described more fully in Business and
Professions Code 26001(z), as amended from time to time. For the purposes of this
Chapter, a "Bona Fide Labor Organization" means any organization or any agency or
employee representation committee or any local unit thereof in which employees
participate, and exists for the purpose, in whole or in part, of working with employers
concerning grievances, labor disputes, wages, hours of employment or conditions of
work, which labor organization is not found to be or to have been financed in whole or
in part, interfered with, dominated or controlled by the employer or any employer
association.
20. "License/Licensee" means a license issued by the State and includes both an A-
license (Adult-Use) and an M-license (Medicinal), and the holder of such license.
21. "Manufacturer" means a Licensee that conducts the production, preparation,
propagation, or compounding of cannabis or cannabis products either directly or
indirectly or by extraction methods, or independently by means of chemical synthesis,
or by a combination of extraction and chemical synthesis at a fixed location that
packages or repackages cannabis or cannabis products or labels or relabels its
container.
22. "Manufacturing" means all aspects of the extraction and/or infusion processes,
including processing, preparing, holding, storing, packaging, or labeling of cannabis
products. Manufacturing also includes any processing, preparing, propagating,
holding, or storing of components and ingredients.
22.5. “Shared Manufacturing” means manufacturers who work in a shared-use
facility. Shared-use facilities are places where multiple shared manufacturers
engaging in cannabis extraction using butter or cooking oils, infusion, and/or
packaging and labeling rotate on a schedule and share space and equipment.
Ordinance No. NS-XXX
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All or part of manufacturing premises may be registered as a shared-use
facility.
23 "Medicinal cannabis patient" is a person whose physician has recommended the use
of cannabis to treat a serious illness, including cancer, anorexia, AIDS, chronic pain,
spasticity, glaucoma, arthritis, migraine, or any other illness for which cannabis
provides relief.
24. "Microbusiness" means a commercial cannabis business that cultivates cannabis on
an area less than ten thousand (10,000) square feet and acts as a licensed
distributor, Level 1 manufacturer, and retailer.
25. "Nursery" means a commercial cannabis Licensee that produces only clones,
immature plants, seeds, and other agricultural products used specifically for the
planting, propagation, and cultivation of cannabis.
26. "Medicinal/medical cannabis" or "Medicinal cannabis product," means cannabis or a
product containing cannabis, including, but not limited to, concentrates, and
extractions, intended to be sold for use by medicinal cannabis patients in California
pursuant to the Compassionate Use Act of 1996, found at Section 11362.5 of the
California Health and Safety Code. Medicinal cannabis retail is regulated by this
Chapter 18 and Chapter 21 of the Santa Ana Municipal Code.
27. "Outdoor cultivation" means the cultivation of cannabis outside a permanent enclosed
building. Outdoor cultivation is prohibited within the City of Santa Ana.
28. "Ownership interest" means an interest held by a person who is an owner as defined
by State of California commercial cannabis regulations or who has a financial interest
in the commercial cannabis business of twenty (20) percent or more.
29. "Package" and "Packaging" means any container or wrapper that may be used for
enclosing or containing any cannabis goods for final retail sale. "Package" and
"packaging" does not include a shipping container or outer wrapping used solely for
the transport of cannabis goods in bulk quantity to a Licensee.
30. "Person" includes any individual, firm, partnership, joint venture, association,
corporation, limited liability company, estate, trust, business trust, receiver, syndicate,
or any other group or combination acting as a unit, and the plural as well as the
singular.
31. "Premises" means the designated structure(s) and land specified in the application
that are in possession of and used by the applicant or Licensee to conduct the
commercial cannabis activity.
32. "Primary Caregiver" has the same meaning as that term is defined in Section 11362.7
of the Health and Safety Code, as amended from time to time.
Ordinance No. NS-XXX
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33. "Private Residence" shall have the same definition as that contained in Health and
Safety Code section 11362.2(5) and also means a lawfully established structure,
suitable for human occupancy as required by section 17922 and 17958 of the
California Health and Safety Code. A recreational vehicle does not constitute a lawfully
established structure for the purposes of this article.
34. "Private security officer" has the same meaning as that term as defined in the State of
California Business and Professions Code section 7574.01.
35. "Purchase" means obtaining cannabis goods in exchange for consideration.
36. "Purchaser" means a person who is engaged in a transaction with a Licensee for
purposes of obtaining cannabis goods.
37. "Qualified patient" has the same meaning as such term is defined in California Health
and Safety Code section 11362.5, as amended from time to time, and means a person
whose physician has recommended the use of cannabis to treat a serious illness,
including cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis,
migraine, or any other illness for which cannabis provides relief.
38. "Responsible person" means any of the following:
a) A person who causes a Code violation to occur.
b) A person who maintains or allows a Code violation to continue by way of his or her
action or failure to act.
c) A person whose agent, employee, or independent contractor causes a Code
violation by its failure to act.
d) A person who is the owner of, and/or a person who is a lessee or sub lessee with
the current right of possession of, real property where property-related Code
violation occurs.
e) A person who is the on-site manager of a business who normally works daily at
the site when the business is open and is responsible for the activities of such
premises.
39. "Retail business" means a premises where cannabis, cannabis products, or devices
for the use of cannabis or cannabis products are offered, either individually or in any
combination for retail sale, including an establishment that delivers cannabis or
cannabis products as part of a retail sale.
39.1. For the purposes of this Chapter, “Consumption lounge” means a facility for
the onsite retail sale and consumption or smoking of cannabis or cannabis
products that is a licensed premises that is a physical location from which
commercial cannabis activities are conducted, as defined by Business and
Professions Code Section 26070 as amended from time to time. For the purposes
Ordinance No. NS-XXX
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of this definition, “consumption” and “smoking” shall also include inhalation, vaping,
and/or ingestion.
39.2. For the purposes of this Chapter, “Temporary Consumption Event” shall
mean an event organized by a commercial cannabis retail business where people
can sell and consume cannabis subject to full compliance with local, County, and
State licensing requirements.
39.3. For the purposes of this Chapter, “Temporary Consumption Festival” shall
mean a large-scale event organized and held by the City of Santa Ana where
people can sell and consume cannabis subject to full compliance with local,
County, and State licensing requirements.
39.4. For the purposes of this Chapter, “Commercial Cannabis Adult-Use Retail
Business” shall mean a retail business operation which engages in the sale of
commercial adult-use cannabis pursuant to a State issued A-license, and that does
not engage in the sale of medicinal cannabis.
39.5 For the purposes of this Chapter, “Commercial Cannabis Medicinal Retail
Business” shall mean a retail business operation which engages in the sale of
medicinal cannabis pursuant to a State issued M-license (Medicinal), and that does
not engage in the sale of commercial adult-use cannabis.
40. "Regulatory Safety Permit (RSP)" means a permit issued by the City pursuant to this
article to a commercial cannabis business.
41. "Sell," "sale," and "to sell" include any transaction whereby, for any consideration, title
to cannabis is transferred from one (1) person to another, and includes the delivery of
cannabis goods pursuant to an order placed for the purchase of the same and
soliciting or receiving an order for the same, but does not include the return of
cannabis goods by a Licensee to the Licensee from whom such cannabis goods were
purchased.
42. "State" means the State of California.
43. "Testing Facility" or "Testing Laboratory" defined in the Business and Professions
Code section 26001, as amended from time to time, means a laboratory, facility, or
entity in the State that offers or performs tests of cannabis or cannabis products and
that is both of the following:
a) Accredited by an accrediting body that is independent from all other persons
involved in commercial cannabis activity in the State; and,
b) Licensed by the Bureau of Cannabis Control.
44. "Wholesale" means the sale of cannabis goods to a distributor for resale to one (1) or
more retail cannabis businesses.
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Sec. 40-3. Compliance with state and local licensing requirements.
A. Any commercial cannabis business as defined by the State of California and the
City of Santa Ana shall operate in conformance with all regulations and standards
set forth in this article to assure that the operations of any commercial cannabis
business as defined by the State of California and allowed by the City of Santa
Ana are in compliance with local and State law and are established to mitigate any
adverse secondary effects from its operations.
B. Commercial cannabis businesses shall be required to obtain a Regulatory Safety
Permit (RSP) from the City of Santa Ana and a State license, and shall comply
with any applicable State licensing requirements, such as operational standards
and locational criteria.
C. Co-location of commercial cannabis businesses proposed on any one (1) site shall
occur only if authorized by the State and the City of Santa Ana and only if allowed
pursuant to the City's Zoning Code. Any commercial cannabis activity not
specifically permitted by this article is prohibited.
Sec. 40-4. Maximum number of regulatory safety permits for commercial cannabis
retail businesses.
A. In no case shall the maximum number of regulatory safety permits for commercial
cannabis retail businesses be less than thirty (30).
B. All commercial cannabis retail businesses may sell medicinal and adult-use
cannabis.
Sec. 40-5. Zoning compliance and regulatory safety permit requirements.
Commercial cannabis activities are expressly prohibited in all zones in the City of Santa
Ana; however, specific commercial cannabis businesses are permitted in the Light
Industrial (M1), Heavy Industrial (M2), and select Specific Development and Professional
zoning districts of an industrial nature in areas as specified on the Commercial Cannabis
Eligible Areas Map as adopted by resolution of the City Council. The allowed current
permit types are described in Table 40-5 and the City of Santa Ana's zoning ordinance
as a requisite for obtaining a Regulatory Safety Permit. No commercial cannabis business
may operate in the City of Santa Ana without a Regulatory Safety Permit.
This Land Use Table 40-5 shall be used to determine whether a commercial cannabis
business is permitted — "P," or not permitted — "X." Any commercial cannabis business
in the City of Santa Ana shall also operate in compliance with the City's zoning ordinance.
If a Zoning District is not listed in the Land Use Table in this section, then the use is
expressly not permitted.
Ordinance No. NS-XXX
Page 13 of 68
City of Santa Ana Municipal Code Table 40-5
Commercial
Cannabis
Business
Activities Use
Type
Land Use
Classification
Indication on the
Commercial
Cannabis Eligible
Areas Map
Regulatory
Safety
Permit
Required
Cultivator/Nursery Indoor only P Yes
Cultivator/Nursery Outdoor or mixed-
light X NA
Cultivator/Nursery
Indoor— Type 5A
(Cultivation;
Indoor; Large), as
defined and
amended by the
State, permitted
beginning
January 1, 2023)
P Yes
Manufacturing
(including “shared
manufacturing”)
Manufacturing P Yes
Retail Medicinal Retail P Yes
Retail Adult-Use Retail P Yes
Testing Laboratory
Adult-Use and/or
Medicinal
Industrial
P Yes
Distribution Freight/Transport P Yes
Microbusiness
Cultivation/Retail/
Manufacturing/
Distribution
P – only as part of
a vertically-
integrated/co-
located business
in full
conformance
with the
requirements of
this Chapter.
Yes
Ordinance No. NS-XXX
Page 14 of 68
Consumption
Lounge
Consumption
Lounge, as an
ancillary
component to
Retail
P Yes
Sec. 40-6. Location and Separation requirements for all commercial cannabis retail
businesses.
A. Commercial cannabis businesses may only operate within an area in accordance with
the Commercial Cannabis Eligible Areas Map as adopted by resolution of the City
Council.
B. No commercial cannabis retail business shall be located within five hundred (500) feet
of another retail cannabis business, as measured from primary entrance of the
business to primary entrance of the other business.
C. No commercial cannabis business shall be located within one thousand (1,000) feet
of any:
1. School (K-12) as defined by Section 11362.768 of the Health and Safety Code,
as indicated by the Commercial Cannabis Eligible Areas Map; or
2. Park, as indicated by the Commercial Cannabis Eligible Areas Map; or
3. Residential zoning district, as indicated by the Commercial Cannabis Eligible
Areas Map.
Sec. 40-7. Relocation of commercial cannabis retail businesses (medicinal and/or
adult-use).
(a) Relocation of an existing medical marijuana collective, medical marijuana cooperative,
and/or adult-use cannabis retail business as defined in this Chapter is permitted within
the City of Santa Ana subject to the following:
(1) The medical marijuana collective, medical marijuana cooperative, and/or adult-use
cannabis retail business must hold a valid RSP, business license, and the
appropriate State commercial cannabis license, and be operating with all required
permits and licenses. For the purposes of this sub-section, “operating” means a
medical marijuana collective, medical marijuana cooperative, and/or adult-use
cannabis retail business currently holding a valid RSP and Santa Ana business
license.
(2) The existing RSP holder and existing location must be in good standing, including
but not limited to full compliance with all requirements of the Santa Ana Municipal
Code, no active code enforcement and/or building safety violations, no violations
Ordinance No. NS-XXX
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of regulations imposed by the State of California and County of Orange, and have
no outstanding business license fees and taxes, except those subject to and
performing under a Finance and Management Services Agency approved
payment plan agreement.
(3) An application to relocate to a proposed new location may be filed after October 1,
2023.
(4) The proposed new location of the medical marijuana collective, medical marijuana
cooperative, and/or adult-use cannabis retail business is in full compliance with the
zoning and separation requirements for commercial cannabis retail businesses as
outlined in Sections 40-5 and 40-6 of the Santa Ana Municipal Code.
(5) The proposed new location of the medical marijuana collective, medical marijuana
cooperative, and/or adult-use cannabis retail business must comply with
separation requirements of this Chapter except that the proposed new location
must also satisfy said separation requirements from any location identified on the
Qualified Registration Applicant List (“Waitlist”), as defined in Section 40-104 of
this chapter and from any entity selected during the City’s evaluative process in
2018.
(b) Any operating medical marijuana collective, medical marijuana cooperative, and/or
adult-use cannabis retail business wishing to relocate shall be required to
concurrently: (1) File an application for an RSP by and (2) Submit all required
construction plans for plan check by the City, subject to the requirements of this
Chapter and other applicable chapters of the Santa Ana Municipal Code, and operate
within 180 days of construction permit issuance. An extension may be issued for a
period of time as may be reasonably required to affect upgrades, modifications,
repairs, or other property issue mitigations as approved by the Director of Planning
and Building or his or her designee.
(c) Upon issuance of the RSP for the new location, the previous location’s RSP and
certificate of occupancy immediately becomes null and void and the location must
cease to operate.
(d) Within 60 days of issuance of the RSP for the new location, the applicant must provide
the City documentation demonstrating that any State-issued commercial cannabis
retailer license associated with the previous location has been cancelled, rescinded,
or updated to reflect the new location.
Sec. 40-8. General provisions for commercial cannabis activities in the City of
Santa Ana.
1. Regulatory Safety Permit Required.
a. Each commercial cannabis business shall obtain a Regulatory Safety Permit (RSP)
specific to the business activity or activities defined by the State pertaining to that
Ordinance No. NS-XXX
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activity. The only allowed current activity types pursuant to this article are for
commercial cannabis retail sales and cultivation, distribution, manufacturing, and
testing laboratories/facilities. Co-location is permitted pursuant to Section 40-9.3.1.
b. It shall be unlawful for any person, as defined by this ordinance, to engage in, conduct
or carry on, in or upon any premises within the City of Santa Ana any commercial
cannabis business without a RSP. A commercial cannabis business shall register and
obtain a RSP from the City of Santa Ana prior to operation. The RSP applicant shall
pay an annual non-refundable application fee in an amount established by the City
Council.
c. A copy of the RSP shall be displayed at all times in a place visible to the public.
d. A RSP shall be valid for a period of one (1) year from the date of issuance, unless
sooner revoked. No permit granted herein shall confer any vested right to any person
or business for more than the above-referenced period.
2. Maintenance of Records and Reporting. All records shall be maintained by the
commercial cannabis business for a period of five (5) years and shall be made
available by the commercial cannabis business to an authorized City of Santa Ana
representative upon request. If they are not produced as requested, the City may seek
a search warrant, subpoena, or court order. In addition to all other formats that the
commercial cannabis business may maintain, these records shall be stored by the
business at the location in a printed format in a fireproof safe or filing cabinet. Any
loss, damage or destruction of the records shall be reported to the Police Department
within twenty-four (24) hours of the loss, destruction or damage.
a. The business shall obtain and maintain a valid Seller's Permit from the California
Department of Tax and Fee Administration (CDTFA).
b. Financial records include, but are not limited to: bank statements, sales invoices,
receipts, tax records, and all records required by the CDTFA under Title 18
California Code of Regulations section 1968.
c. Personnel records, including each employee's full name, address, phone number,
social security, or individual tax payer identification number, date of beginning
employment, and date of termination of employment if applicable.
d. Training records, including, but not limited to, the content of the training provided
and the names of the employees that received the training.
e. Contracts with other businesses regarding commercial cannabis business activity.
f. Permits, licenses, and other local authorizations to conduct the commercial
cannabis business activity.
g. Security records, as outlined in the Operational Standards for All Commercial
Cannabis Business Activities.
Ordinance No. NS-XXX
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h. Proof of building ownership or landlord letter acknowledging business type.
i. Proof of insurance.
3. Operational Standards for All Commercial Cannabis Business Activities.
a. The location, interior and exterior, shall be monitored at all times by web-based
closed circuit television for security purposes. The camera and recording system
must be of adequate quality, color rendition and resolution to allow the ready
identification of any individual committing a crime anywhere on or adjacent to the
location. The recordings shall be maintained unaltered in a secure location for a
period of not less than ninety (90) days. The Police Department may request the
recordings in connection with an investigation.
b. All controlled access areas, security rooms and all points of ingress/egress to
limited access areas and all point of sale (POS) areas shall have fixed camera
coverage capable of identifying activity occurring within a minimum of twenty (20)
feet.
c. The surveillance system storage device or cameras shall be transmission control
protocol/TCP capable of being accessed through the internet by the police
department or their designee on request.
d. If applicable, the applicant shall conduct and pay for any required CEQA reviews
and analyses, and pay for all costs, including those of the City, associated with
project review under CEQA.
e. Commercial cannabis businesses shall create and maintain an active account
within the State's track and trace system prior to commencing any commercial
cannabis retail activity. In the event of system failure, the business shall keep a
hard copy record and transfer the information to the track and trace system within
twenty-four (24) hours of the system being available.
f. No physical modification of the licensed premises is allowed without written prior
permission by the City of Santa Ana and payment of any additional fees required
by the City.
g. Commercial cannabis business businesses shall provide adequate off-street
parking and comply with the City of Santa Ana Municipal Code parking
requirements in order to service customers without causing negative impact.
h. The commercial cannabis business shall provide adequate disabled access
parking per the requirements in the California Building Code.
i. The commercial cannabis business shall minimize nuisances such as trash, litter,
and graffiti.
Ordinance No. NS-XXX
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j. Any and all signage, packaging, and facilities shall not be "attractive," as it is
defined by the State, to minors.
k. Commercial cannabis business facilities shall be required to provide an air
treatment system that ensures off-site odors shall not result from its operations.
This requirement at a minimum means that the facility shall be designed to provide
sufficient odor absorbing ventilation and exhaust systems so that any odor
generated inside the location is not detected outside the building, in any adjacent
tenant suites, on adjacent properties or public rights-of-way, or within any other
unit located within the same building as the facility if the use occupies only a portion
of a building.
l. The commercial cannabis business shall comply with all State regulations
regarding:
i. Testing, labeling and storage of all cannabis products.
ii. Use of appropriate weighing devices.
iii. Electrical and plumbing regulations subject to periodic and unannounced
inspections to ensure compliance.
iv. State deadlines for applying for a State license and receiving a State license
within six (6) months after the date the State begins issuing licenses. This may
be waived if the State has longer delays in issuing licenses of the type the
commercial cannabis business seeks.
m. The commercial cannabis business shall maintain a comprehensive general
liability combined single occurrence insurance policy issued by an "A" rated
insurance carrier in an amount no less than two million dollars ($2,000,000.00),
with primary coverage, naming the City of Santa Ana as additional insured.
n. No free samples of any cannabis or cannabis product may be distributed at any
time.
o. Badges shall be worn by any individuals as required to do so pursuant to the
California Code of Regulations, Title 4, Section 15043 and California Business and
Professions Code Section 7582.28, as amended from time to time.
p. All private security officers acting for or employed by a commercial cannabis
business shall be licensed by the State and issued a security/patrol services
business license from the City of Santa Ana.
q. The commercial cannabis business shall have a centrally monitored fire and
burglar alarm system which shall include all perimeter entry points and perimeter
windows and the building or portion of the building where the business is located
shall contain a fireproof safe or fireproof filing cabinet and include a safety and
security plan.
Ordinance No. NS-XXX
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r. The commercial cannabis business shall ensure a licensed alarm company
operator or one (1) or more of its registered alarm agents installs, maintains,
monitors and responds to the alarm system. The alarm company shall obtain a
City of Santa Ana business license.
s. The commercial cannabis business shall provide the name and phone number of
an on-site staff person to the police department and the Code Enforcement
Division of the Planning and Building Agency for notification if there are operational
problems with the establishment.
t. The commercial cannabis business must obtain and maintain a valid City business
license at all times as a condition for receiving, renewing, and maintaining its
regulatory safety permit.
u. Occupancy shall not exceed that required under the Uniform Building Code and
Uniform Fire Code, and the maximum occupancy load shall be posted at the main
entrance.
v. For any commercial cannabis business with two (2) or more employees, the
business owner shall attest that he/she has entered into a labor peace agreement
and provide a copy of the agreement to the City.
w. Any individual with an ownership interest shall complete a live scan and submit the
results to the City.
x. All signage for the commercial cannabis business must comply with Article XI of
Chapter 41 of the Santa Ana Municipal Code.
y. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during the business's regular business hours.
4. Additional Operational Standards for Cannabis Retail Business.
a. At all times the cannabis retail business is open, it shall provide at least one (1)
private security guard who is licensed, possesses a valid Department of Consumer
Affairs "security guard card," and has a valid business license from the City of
Santa Ana as a security/private patrol service.
b. The private security guard and retail cannabis business personnel shall monitor
the site and the immediate vicinity of the site to ensure that patrons immediately
leave the site and do not consume cannabis in the vicinity of the retail business or
on the property or in the parking lot.
c. Exterior signage shall comply with Article XI of Chapter 41 of the Santa Ana
Municipal Code. Interior signage or advertising may not be visible from the exterior.
Retail cannabis businesses must comply with the advertising and marketing
provisions of Business and Professions Code §§ 26150—26155.
Ordinance No. NS-XXX
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d. There shall be no on-site sales of alcohol or tobacco products, (excluding rolling
papers and lighters) and no on-site consumption of alcohol or tobacco by patrons.
Food may not be consumed on site, except as permitted by Section 40-8 (10) of
this chapter.
e. Hours of operation shall be limited to: 7:00 a.m. to 11:00 p.m. daily. No licensed
retail business shall be open to the public between the hours of 11:01 p.m. and
6:59 a.m. of any day.
f. The cannabis retail business shall notify patrons of the following both verbally and
through posting of a sign in a conspicuous location:
i. Secondary sale, barter or distribution of adult-use cannabis is a crime and can
lead to arrest.
ii. That loitering on and around the retail site is prohibited by California Penal
Code § 647(e) and that patrons must immediately leave the site and not
consume cannabis in the vicinity of the retail site or on the property or in the
parking lot.
iii. A warning that patrons and/or employees may be subject to prosecution under
federal cannabis laws.
iv. That the use of cannabis may impair a person's ability to drive a motor vehicle
or operate machinery.
g. No one under the age of twenty-one (21) shall be allowed to enter a cannabis retail
facility unless the licensed cannabis facility holds a medicinal use cannabis RSP
issued by the City and retail license issued by the State, and the licensed premises
for the cannabis license and medicinal cannabis license are the same in
accordance with Business and Professions Code section 26140.
h. If non-cannabis food is distributed, the retail business shall comply with all relevant
State laws, County and City ordinances pertaining to the preparation, distribution
and sale of food.
i. All cannabis retail businesses shall establish and implement a program to
incentivize the recycling of used containers. Failure to establish and implement a
program to incentivize the recycling of used containers will result in a violation of
the terms of the required commercial cannabis Operating Agreement requiring
sustainable building or business practices.
j. Cannabis retail businesses shall also record on the video surveillance system
point-of-sale areas and areas where cannabis goods are displayed for sale.
k. Adequate signage shall clearly state who has inspected any cannabis product for
pesticides, or other regulated contaminants, distributed at this location.
Ordinance No. NS-XXX
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l. Shipments of cannabis goods may only be accepted during regular business
hours.
m. Inventory shall be secured using a lockable storage system during non-business
hours.
n. No cannabis product shall be visible from the exterior of the business.
o. All required labelling shall be maintained on all product, as required by State law,
at all times.
p. Educational tours of retail cannabis businesses shall be allowed.
q. A permitted commercial cannabis retail business shall have one hundred eighty
(180) days after construction permit issuance by the City of Santa Ana to operate.
A permitted commercial cannabis retail business that ceases to operate for more
than ninety (90) calendar days shall be deemed "abandoned" and the permit shall
be forfeited. A permitted commercial cannabis business may temporarily suspend
operations for a period of time as may be reasonably required to affect upgrades,
modifications, repairs, or other property issue mitigations as approved by the
Director of Planning and Building or his or her designee. For the purposes of this
section, "operate" shall mean that the gross receipts fees charged for the business
exceed the fee per square foot calculations by the end of the one hundred eighty
(180) day period. A pending commercial cannabis retail business shall be required
to concurrently: (1) File an application for an RSP and (2) Obtain all required
construction permits for the facility from the City within six months of the effective
date of this ordinance, subject to the requirements of this Chapter and other
applicable chapters of the Santa Ana Municipal Code, and open within 180 days
of construction permit issuance. An extension may be issued for a period of time
as may be reasonably required to affect upgrades, modifications, repairs, or other
property issue mitigations as approved by the Director of Planning and Building or
his or her designee. Failure to satisfy these requirements by that deadline will
disqualify the applicant from the RSP Eligibility List and the Waitlist described in
Article II of this Chapter. Relocation is permitted pursuant to Section 40-7 of this
Chapter.
r. A licensee that is authorized to conduct medicinal and/or adult-use retail sales may
donate cannabis or cannabis products and the use of equipment in compliance
with any State compassionate use, equity, or other similar program in accordance
with Section 26071 to the Business and Professions Code.
s. Subject to approval of an operations plan by the Executive Director of the Planning
and Building Agency, the opening of cannabis packages and demonstration of
cannabis products at a commercial cannabis retail business is permitted for
educational purposes without establishment of a consumption lounge, subject to
the following requirements:
Ordinance No. NS-XXX
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i. The maximum amount of cannabis product which may be consumed in such
a setting is one-half (1/2) of one gram.
ii. There shall be a separate room dedicated for such purposes. Activities in
said dedicated room shall be limited to the opening of packages, use
demonstration, and consumption for consumer education purposes, by the
consumer only.
iii. The dedicated room shall be limited to 100 square feet maximum size, shall
be included as part of the facility’s ventilation and odor control methods, and
shall be monitored using video surveillance systems.
iv. Such activities shall be subject to an administrative permit issued by the
Planning and Building Agency. As part of the permit application, the
applicant shall include administrative policies ensuring the opening of
packages, demonstration and education, and limited consumption are
restricted to the room and for ensuring such activities do not pose a threat
to the health, safety, and welfare of other consumers, employees of the
business, and visitors to the surrounding area.
5. Additional Operational Standards for Commercial Cannabis Retail Delivery Services.
a. Commercial cannabis retail deliveries may be made only from a commercial
cannabis retail business permitted by the City in compliance with this article, and
in compliance with all State regulations.
b. All employees who deliver cannabis shall have valid identification and a copy of
the commercial cannabis retail business' Regulatory Safety Permit and State
license at all times while making deliveries.
c. All commercial cannabis retail businesses shall maintain proof of vehicle insurance
for any and all vehicles being used to transport cannabis goods as required by
State law.
d. Deliveries may only take place during normal business hours of the commercial
cannabis retail business.
e. During delivery, the delivery employee shall maintain a physical or electronic copy
of the delivery request and shall make it available upon request by the licensing
authority and law enforcement officers. The delivery request documentation shall
comply with State law.
f. A licensed delivery employee shall not leave the State of California while
possessing cannabis products.
Ordinance No. NS-XXX
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g. A commercial cannabis retail business shall maintain a list of all deliveries,
including the address delivered to, the amount and type of product delivered, and
any other information required by the State.
h. A manifest with all information required in this section shall accompany any
delivery person at all times during the delivery process and delivery hours.
i. Any delivery method shall be made in compliance with State law, as amended,
including use of a vehicle that has a dedicated GPS device for identifying the
location of the vehicle (cell phones and tablets are not sufficient).
j. Each delivery request shall have a receipt prepared by the commercial cannabis
retail business with the following information:
i. Name and address of the commercial cannabis retail business.
ii. The name of the employee who delivered the order.
iii. The date and time the delivery request was made.
iv. The complete delivery addresses.
v. A detailed description of the cannabis goods requested for delivery including
the weight or volume, or any accurate measure of the amount of cannabis
goods requested.
vi. The total amount paid for the delivery including any fees or taxes.
k. At the time of the delivery, the date and time delivery was made, and the signature
of the person who received the delivery.
l. No cannabis delivery vehicle shall display signs, decals or any other form of
advertisement with the exception of a maximum four-inch by four-inch decal.
m. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during regular business hours.
6. Additional Operational Standards for Commercial Cannabis Testing Facilities or
Laboratories.
a. A licensed cannabis testing facility or laboratory business, its owners and
employees may not hold an interest in any other cannabis business except another
testing laboratory business.
b. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during the business's regular business hours.
c. Educational tours of cannabis testing facility/laboratory businesses shall be
allowed.
Ordinance No. NS-XXX
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7. Additional Operational Standards for Commercial Cannabis Manufacturing Facilities.
a. A licensed commercial cannabis manufacturing facility may conduct all activities
permitted by the State. This includes, but is not limited to: extractions, repackaging
and relabeling, infusions and extractions.
b. Any manufacturing that will be conducted by the commercial cannabis business
shall be included on the application. No additional manufacturing activity can be
conducted without notifying the Executive Director of the Planning and Building
Agency or his or her designee, after which a determination will be made if the new
activity may commence with or without modification to the RSP or if a new RSP is
required.
c. At all times, the commercial cannabis manufacturing facility will be compliant with
all State regulations for cannabis manufacturing including Health and Safety Code
§ 11362.775, as amended from time to time. Signage shall be posted regarding
the type(s) of chemicals being used at the manufacturing facility.
d. Cannabis manufacturing facilities shall not contain an exhibition or product sales
area or allow for retail distribution of products at that location unless the facility is
co-located with an approved commercial cannabis retail business with a RSP.
e. Extraction equipment and extraction process utilizing hydrocarbon solvents shall
be located in a room or area dedicated to extraction.
f. All commercial cannabis manufacturing/processing facilities shall comply with any
and all applicable safety guidelines adopted by the Orange County Fire Authority,
the State of California, and/or the City of Santa Ana for cannabis plant processing
and extraction.
8. Additional Operational Standards for Indoor Commercial Cannabis Cultivation
Facilities.
a. There shall be no exterior evidence of cannabis cultivation from a public right-of-
way.
b. The Building Official may require additional specific standards to meet the
California Building Code and Fire Code, including, but not limited to, installation of
fire suppression sprinklers.
c. Compliance with Section 13149 of Water Code as enforced by the State Water
Resources Control Board is required.
d. All commercial cannabis cultivation facilities shall comply with any and all
applicable safety guidelines adopted by the Orange County Fire Authority, the
State of California, and/or the City of Santa Ana for cannabis carbon dioxide
enrichment systems.
Ordinance No. NS-XXX
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e. Cannabis cultivation facilities shall not contain an exhibition or product sales area
or allow for retail distribution of products at that location unless the facility is co-
located with an approved commercial cannabis retail business with a RSP.
9. Additional Operational Standards for Commercial Cannabis Distribution Facilities.
a. Inspections by an authorized City of Santa Ana representative may be conducted
anytime during the business's regular business hours.
b. A distributor shall ensure that all cannabis goods stored in compliance with all
applicable State regulations to ensure conformance to any and all applicable Track
and Trace systems required by the State.
c. Employee breakrooms, eating areas, changing facilities, locker rooms and
bathrooms shall be completely separated from the storage areas.
10. Additional Operational Standards for Consumption Lounges and Onsite Cannabis
Consumption.
a. Inspections by an authorized City of Santa Ana representative may be
conducted anytime during the business's regular business hours.
b. Consumption lounges are permitted as an ancillary use to a licensed
commercial cannabis medicinal or adult-use retail business.
c. Consumption lounges must be on the same site as and physically contiguous
to a licensed commercial cannabis retail business.
d. All retail sales transactions for the purposes of onsite consumption shall be
conducted using point-of-sales equipment and reported separately in a format
satisfactory to the Executive Director of the Finance and Management Services
Agency.
e. Two (2) parking spaces per 1,000 square feet of gross building square footage
shall be provided for any building expansion constructed for a consumption
lounge.
f. Consumption lounges shall be designed such that a patron need not enter a
consumption lounge in order to access a retail-only portion of the facility. There
shall be no connection between a consumption lounge and another tenant
suite.
g. Medicinal or adult-use cannabis and cannabis products may be sold on the
premises of a consumption lounge, subject to the following:
i. The operator must hold a valid adult-use and/or medicinal retail business
RSP.
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ii. Products shall be sold for on-site consumption only. Products may not be
sold for off-site consumption. All cannabis products purchased and opened
at the facility must be smoked or consumed on site and shall not be
permitted to leave the facility unless in a resealed package that meets all
State guidelines.
iii. All products consumed or smoked on premises shall be sold at the
consumption lounge. Operators shall not permit patrons to bring their own
personal cannabis or cannabis products to the consumption lounge.
h. Outdoor smoking is permitted with the installation of odor-control mechanisms
as reviewed and approved by the Planning and Building Agency.
i. Food may be consumed in the consumption lounge; however, the sale or
consumption of alcohol or tobacco products is prohibited.
j. Access to the consumption lounge shall be restricted to persons twenty-one
(21) years of age or older, or as allowed by State law.
k. The consumption or smoking of cannabis products shall not be visible from any
public place, public right-of-way, or area where minors may be present. If the
consumption lounge contains an outdoor area, the outdoor area shall be
oriented so as to eliminate visibility from any adjacent public place, public right-
of-way, area where minors may be present, or adjacent business, tenant space,
or building.
l. Commercial cannabis consumption lounges shall be required to provide an air
treatment system that ensures off-site odors shall not result from its operations.
The facility shall be designed to provide sufficient odor absorbing ventilation
and exhaust systems so that any odor generated inside the location is not
detected outside the building, in any adjacent tenant suites, on adjacent
properties or public rights-of-way, or within any other unit located within the
same building as the facility if the use occupies only a portion of a building.
m. Odor control response.
i. Within twenty-four (24) hours of any complaint concerning odors emanating
from or originating at the facility, the operator shall respond to the complaint
in question and shall timely file a written disclosure to the Planning and
Building Agency documenting any and all actions taken and planned to
address the odor complaint(s). The City, upon determination of the
continued existing of detectable odor from the facility, may require an
operator to submit an implementation plan and/or a performance schedule,
above and beyond this written disclosure filed within twenty-four (24) hours,
to ensure the employment of measures to control the odor.
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ii. The Executive Director of the Planning and Building Agency shall have the
authority to require an operator of a consumption lounge to amend any
implementation plan and/or performance schedule submitted pursuant to
this sub-section to cause compliance herewith.
iii. Any failure to timely submit a written disclosure, a more detailed
implementation plan and/or performance schedule or amendment thereto,
to timely adhere to terms of either, or to complete any required
improvements within the timeframe specified by the Executive Director of
the Planning and Building Agency shall be grounds for revocation of the
RSP.
iv. Odors from a consumption lounge are identified as a public nuisance
pursuant to the Santa Ana Municipal Code. The City may pursue all
administrative, civil, and criminal remedies available in relation to any
nuisance determined to exist with respect to the operation of a consumption
lounge in violation of this sub-section.
n. All consumption lounges shall be equipped with point-of-sale or similar
equipment to distinguish sales of products made for onsite consumption from
sales of retail products for offsite consumption.
11. Additional Operational Standards for Temporary Consumption Events and
Temporary Consumption Festivals.
a. Inspections by an authorized City of Santa Ana representative may be
conducted anytime during the event.
b. All retail sales transactions for the purposes of onsite consumption during a
temporary consumption event shall be conducted using point-of-sales
equipment and reported separately in a format satisfactory to the Executive
Director of the Finance and Management Services Agency.
c. Temporary Consumption Festivals.
i. Temporary consumption festivals may be held on public or private
property as approved by the City.
ii. Temporary consumption festivals may only be organized and held by
the City of Santa Ana.
iii. Temporary consumption festivals are subject to all applicable
standards promulgated by this Chapter for temporary consumption
events.
iv. All cannabis products and food available for purchase must be
sourced locally from Santa Ana-based businesses.
Ordinance No. NS-XXX
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d. Temporary consumption events are permitted as an ancillary use to each
commercial cannabis medicinal or adult-use retail business, subject to review
and approval of a Land Use Certificate (LUC), pursuant to Section 41-675
through 41-677 of the Santa Ana Municipal Code, and verification of any
applicable required valid business licenses required pursuant to Chapter 21,
Articles XII and XIII of this Code. The number of temporary consumption events
permissible per business per calendar year is subject to establishment by
resolution of the City Council.
e. Live entertainment may be provided only in conjunction with an approved LUC.
f. Applications for temporary consumption event LUCs must be submitted at least
45 days prior to the event date.
g. Applicant(s) for a temporary consumption event must provide a copy of all final
application materials submitted to the State of California pursuant to California
Code of Regulations Section 15002.1 (Temporary Cannabis Event Application)
as amended from time to time.
h. The event shall last no longer than 48 hours and in all cases shall begin no
earlier than 8:00 a.m. and end no later than 10:00 p.m. The duration of setup
and dismantling activities associated with the event shall be specified on the
LUC application.
i. Location. Temporary consumption events must be on the same site as a
commercial cannabis medicinal or adult-use retail business.
j. Medicinal or adult-use cannabis and cannabis products may be sold on the
premises during temporary consumption events, subject to the following:
i. The operator must hold a valid adult-use and/or medicinal retail business
RSP.
ii. Products shall be sold for on-site consumption only. All unconsumed
cannabis products purchased and opened at the facility must be resealed
prior to leaving the facility.
iii. All products consumed or smoked on premises shall be sold at the facility.
Operators shall not permit patrons to bring their own personal cannabis or
cannabis products to the event.
k. Outdoor smoking is permitted with the installation of odor-control mechanisms
as reviewed and approved by the Planning and Building Agency.
l. Food may be consumed; however, the sale or consumption of alcohol or
tobacco products on the premises is prohibited.
Ordinance No. NS-XXX
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m. Access to the temporary consumption and/or special event shall be restricted
to persons twenty-one (21) years of age or older.
n. The consumption or smoking of cannabis products shall not be visible from any
public right-of-way or area where minors may be present. If the temporary
consumption event takes place in an outdoor area, the outdoor area shall be
oriented to eliminate visibility from any adjacent public place, public right-of-
way, area where minors may be present, or adjacent business, tenant space,
or building, and shall be oriented to minimize odor intrusion onto adjacent
tenant spaces and properties.
o. All events shall be required to provide an air treatment system that ensures off-
site odors shall not result from its operations. The site shall be designed to
provide sufficient odor absorbing ventilation and exhaust systems so that any
odor generated inside the location is not detected outside the building, in any
adjacent tenant suites, on adjacent properties or public rights-of-way, or within
any other unit located within the same building as the facility if the use occupies
only a portion of a building. Outdoor smoking, including vaping and the use of
other electronic inhalation devices, must take place within ventilated
enclosures subject to the satisfaction of the Planning and Building Agency and
Orange County Fire Authority.
p. Odor control response.
i. Odors from a temporary consumption event are identified as a public
nuisance pursuant to the Santa Ana Municipal Code. The City may pursue
all administrative, civil, and criminal remedies available in relation to any
nuisance determined to exist with respect to the operation of a consumption
lounge in violation of this Chapter.
ii. Upon receipt of any complaint concerning odors emanating from or
originating at the temporary consumption event, the Planning and Building
Agency may suspend or revoke the LUC.
q. All temporary consumption events shall be equipped with point-of-sale or
similar equipment to distinguish sales of products made for onsite consumption
from sales of retail products for offsite consumption.
Sec. 40-9. Commercial cannabis selection process.
1. Commercial Cannabis — Registration Application and Regulatory Safety Permit
Required.
a. For applicants prior to January 1, 2018: Existing medicinal cannabis business
operators, or those with pending applications for a medicinal RSP, who desire to
operate an adult cannabis retail business shall apply for the cannabis Regulatory
Safety Permit ("RSP") on or before December 14, 2017. The Director of Planning
Ordinance No. NS-XXX
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and Building shall review such application and issue the RSP, without
consideration of the merit based point system, so long as they satisfy all other
requirements of this Chapter.
b. The Regulatory Safety Permit ("RSP") selection process will be conducted in two
(2) phases, Phase 1 (Registration Application) and Phase 2 (Regulatory Safety
Permit Application). Registration Applications will be reviewed by the Director of
Planning and Building or designees(s) for completeness and compliance, and if
eligible, will be notified in writing to enter into the Phase 2 Regulatory Safety Permit
Application process. In Phase 2, the City of Santa Ana has established a merit
based point system for adult-use commercial cannabis retail businesses to
objectively award permits as described in the Regulatory Safety Permit
Application.
2. Phase 1 — Registration Application.
a. Following the adoption of this article, the Director of Planning and Building shall
prepare commercial cannabis business registration application forms and a related
administrative policy. Each commercial cannabis business interested in operating
pursuant to this article may submit an application together with a non-refundable
processing fee in an amount established by the City Council.
b. The Registration Application period shall be thirty (30) calendar days from the date
the applications are released. Following the application period, the Director of
Planning and Building or designee(s) shall stop accepting applications and review
all applications received in Phase 1. Each application that is complete and in
compliance with the application requirements in Phase 1 shall be notified in writing
whether they are a "RSP Eligible Applicant" or not. Each complete and compliant
applicant may then choose to file an application for a RSP in Phase 2.
c. The requirements for Phase 1 include, but are not limited to:
i. All application documents required in the City's Phase 1 Registration
Application package.
ii. Application was submitted during the application period.
iii. Application forms are filled out completely.
iv. Phase 1 application fee is paid.
v. A signed statement that the proposed location of the commercial cannabis
business on the application meets the zoning criteria established in this article
including, but not limited to, any and all sensitive use separation criteria
required by this article.
vi. Proof of site control for commercial cannabis retail businesses submitting
Phase 1 applications on or after July 1, 2018.
Ordinance No. NS-XXX
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d. The Director of Planning and Building or his or her designee(s) shall review each
application upon submission and ensure that the application is complete.
Incomplete applications will be promptly rejected and the applicant shall be notified
in writing of the deficiencies. The applicant shall be given an opportunity to cure
any incomplete or deficient application prior to the conclusion of the application
processing term, if such time period is applicable.
3. Phase 2 — Regulatory Safety Permit Application.
a. Each complete and compliant applicant may choose to complete and file a RSP
application to the Director of Planning and Building. The application shall be filed
together with a nonrefundable fee as established by resolution of the City Council,
to defray the cost of investigation required by this article.
b. The RSP application period shall be open for thirty (30) calendar days and may
run concurrently with the Phase 1 review period. Following the RSP application
period, the Director of Planning and Building or designee(s) shall stop accepting
applications and review all applications received in Phase 2.
c. The Director of Planning and Building or designee(s) will review all application
documents required in the City's Phase 2 application package plus the additional
requirements in subsection (d) below. The Director of Planning and Building or his
or her designee(s) will use a merit based point system to review and rank each of
applications from the most to the least points and objectively award the top
applicants a RSP. A complete description of the merit based point system and all
merit based point considerations shall be included with the application forms.
d. Phase 2 requirements include, but are not limited to:
i. All application documents required in the City's Phase 2 RSP application
package.
ii. Phase 2 application fee is paid and a comprehensive background check is
completed on all owners, managers, security guards, and/or agents.
iii. The Building Official or designee has inspected all structures in which the use
is located to determine that all applicable standards and requirements are met.
If a building permit is required for site improvements, Permit issuance will be
deferred until a certificate of occupancy or other building permit approval is
issued. Additionally, the Building Official has determined that there are no
notices of nuisance or other code compliance issues recorded or on the
property.
iv. The Planning Manager or designee has issued zoning clearance documenting
compliance with the following:
a. The use is permitted;
Ordinance No. NS-XXX
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b. All land use permits, if any, have been approved and all conditions of
approval have been met or are in good standing; and,
c. No zoning violations exist on the property.
e. The Director of the Planning and Building Agency or his or her designee(s) shall
review each application upon submission and ensure that the application is
complete. Incomplete applications will be promptly rejected and the applicant shall
be notified that business day of the deficiencies. The applicant shall be given an
opportunity to cure any incomplete or deficient application prior to the conclusion
of the application processing term, if such time period is applicable.
3.1 Commercial Cannabis — Registration Application and Regulatory Safety Permit for
Additional Commercial Cannabis Business Activities on the Same Premises (Co-
Location).
a. An existing commercial cannabis business with an RSP may co-locate additional
non-retail commercial cannabis business activities (cultivation, distribution, and/or
manufacturing) by applying for a new RSP for the additional use(s). The new RSP
must meet the all requirements of the Santa Ana Municipal Code except that
background checks (live scans) shall only be required for any new owners as
outlined in Section 40-8. A single RSP that lists any and all approved cannabis
business activity/activities may be renewed annually thereafter.
b. New or pending RSP applicants wishing to co-locate additional non-retail
(cultivation, distribution, and/or manufacturing) uses may submit a new RSP for
any of the non-retail commercial cannabis business activities. The additional RSP
must meet the all requirements of the RSP except that background checks (live
scans) shall only be required for any new owners as outlined in Section 40-8. A
single RSP that lists any and all approved cannabis business activity/activities may
be renewed annually thereafter.
c. New commercial cannabis business applicants — co-location.
1. New commercial cannabis retail applicants wishing to co-locate additional non-
retail (cultivation, distribution, and/or manufacturing) uses shall submit
separate RSPs for the proposed retail activity and another RSP for any of the
non-retail (cultivation, distribution, and/or manufacturing) commercial cannabis
business activities. Each RSP application will be evaluated independently and
must meet any applicable requirements of the RSP as outlined in Sections 40-
8 and 40-9, including, but not limited to, merit evaluation and additional
separation requirements for the retail RSP. A single RSP that lists any and all
approved cannabis business activity/activities may be renewed annually
thereafter.
Ordinance No. NS-XXX
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2. New non-retail commercial cannabis applicants wishing to co-locate additional
non-retail (cultivation, distribution, and/or manufacturing) uses may submit a
single RSP for the proposed activity or activities. The RSP application must
meet any applicable requirements of the RSP as outlined in Sections 40-8 and
40-9. A single RSP that lists any and all approved cannabis business
activity/activities may be renewed annually thereafter.
4. Regulatory Safety Permit Annual Renewal.
a. Applications for the renewal of a permit shall be filed with the Director of Planning
and Building or designee(s) at least sixty (60) calendar days before the expiration
of the current permit. Temporary permits will not be issued. Any permittee allowing
their permit to lapse or which permit expired during a suspension shall be required
to submit a new application, pay the corresponding original application fees and
be subject to all aspects of the selection process.
b. Any person desiring to obtain a renewal of their respective permit shall file a written
application under penalty of perjury on the required form with the Director of
Planning and Building or his or her designee(s) who will conduct a review. The
application shall be accompanied by a nonrefundable filing fee established by the
City Council to defray the cost of the review required by this article. An applicant
shall be required to update the information contained in their original permit
application and provide any new and/or additional information as may be
reasonably required by the Director of Planning and Building or designee(s) in
order to determine whether said permit should be renewed based on compliance
with all applicable provisions of the Santa Ana Municipal Code.
c. Compliance with Section 40-1(C) to provide for community benefits is required for
all commercial cannabis businesses seeking renewal of the RSP.
5. Appeal of Denial of Regulatory Safety Permit/Denial of RSP Renewal. The Executive
Director of the Planning and Building Agency or his or her designee(s) will review all
Regulatory Safety Permit applications and renewal requests, along with all other
relevant information, and determine if a RSP should be granted and/or renewed based
on compliance with all applicable provisions of the Santa Ana Municipal Code. If the
Executive Director of the Planning and Building Agency determines that the permit
shall not be granted and/or renewed, the reasons for denial shall be provided in writing
to the applicant. No such denial shall become effective until the applicant for the
regulatory safety permit and/or renewal has been notified in writing by certified mail of
the right to appeal the denial decision pursuant to the provisions of Chapter 3 of this
Code. If a timely appeal is filed, the denial shall be effective only upon decision of a
hearing officer as provided for in Chapter 3 of the Santa Ana Municipal Code.
Otherwise, the denial shall become effective after the timely appeal period has
passed. The matter may be subject to judicial review under the provisions of California
Code of Civil Procedure Sections 1094.5 and 1094.6.
Ordinance No. NS-XXX
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Sec. 40-9.1. Non-retail commercial cannabis business (cultivation, manufacturing,
distribution, and testing facility/laboratory) selection process.
1. Non-Retail Commercial Cannabis Businesses — Registration Application (Phase 1)
and Regulatory Safety Permit (Phase 2) Required.
a. Every Non-Retail Commercial Cannabis Business shall apply for the Phase 1
(Registration Application) and Phase 2 (Regulatory Safety Permit Application) in
the manner described in Section 40-9, except that the Director of the Planning and
Building Agency or his or her designee may accept Phase 1 and Phase 2
applications for a Non-Retail Commercial Cannabis Business concurrently, and
shall review such applications and issue the Regulatory Safety Permit Application
without consideration of the merit based point system, insofar as the applications
satisfy all other requirements of this article.
b. Applications for a Non-Retail Commercial Cannabis Business shall be accepted
during normal City Hall business hours and are not subject to the thirty (30) day
Phase 1 or Phase 2 application periods.
Sec. 40-9.2. Commercial cannabis consumption lounge permitting process.
1. After the adoption of this Ordinance, the Executive Director of the Planning and
Building Agency shall prepare application forms to evaluate a proposed commercial
cannabis consumption lounge. Each commercial cannabis retail business interested
in operating a consumption lounge pursuant to this article may submit an RSP
application together with a non-refundable processing fee in an amount established
by the City Council.
a. Beginning the effective date Ordinance No. NS-XXXX (January 1, 2023) and for
one year thereafter (until January 1, 2024), the City shall only accept RSP
applications for commercial cannabis consumption lounges from those licensed
commercial cannabis retail business with a valid RSP in the City of Santa Ana that
are in compliance with and having provided the attestation form signed by a Bona
Fide Labor Organization pursuant to Section 40-16 of this Chapter.
b. Beginning January 1, 2024, the City shall accept RSP applications for commercial
cannabis consumption lounges from any other licensed commercial cannabis retail
business with a valid RSP in the City of Santa Ana.
2. The Director or his or her designee shall determine whether each RSP application
demonstrates compliance with this article as prescribed by Section 40-9 of this
Chapter and notify the applicant of the outcome of the application as either eligible or
ineligible.
3. Qualified Consumption Lounge Applicants shall be notified by the City that they may
submit any/all required documentation and plan drawings to complete the City’s plan
check and permitting process to construct a consumption lounge.
Ordinance No. NS-XXX
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4. Upon notification of eligibility, applicants shall have 180 days to complete the plan
check and construction process, and be issued a certificate of occupancy, unless an
extension is granted by the Executive Director of the Planning and Building Agency to
resolve required building or site upgrades, modifications, repairs, or other property
issue mitigations tied directly to construction of the lounge.
Sec. 40-10. Audits - Commercial Cannabis Businesses.
Annual audits. No later than September 30 of every year, each licensed commercial
cannabis business, except commercial cannabis businesses licensed and operating
solely as shared manufacturers, shall be liable to file with the City an independent audit
or financial review of its operations of the previous calendar year. Provided, however, that
licensed commercial cannabis businesses which operate as microbusiness, or that
operate on a vertically or horizontally integrated basis as established in Chapter 21,
Article XIII of this Code, or that are co-located on shared premises may file a consolidated
independent audit or financial review. The form and contents of the document shall be
specified by the Executive Director of Finance and Management Services, or his or her
designee(s). The Executive Director of Finance and Management Services, or his or her
designee(s) may waive this requirement for certain licensed commercial cannabis
businesses in accordance with guidelines established by the Finance and Management
Services Agency.
Sec. 40-11. Inspection and enforcement responsibilities.
The Code Enforcement Division of the Planning and Building Agency may enter and
inspect the location of any commercial cannabis business between the hours of 7:00 a.m.
and 10:00 p.m., or at any reasonable time, to ensure compliance with this article. In
addition, any police officer may enter and inspect the location of any commercial cannabis
business and the recordings and records maintained as required by this article, except
that the inspection and copying of private medical records shall be made available to the
police department only pursuant to a properly executed search warrant, subpoena, or
court order. It is unlawful for any owner, responsible person, landlord, lessee, member
including, but not limited to, a member engaged in the management), or any other person
having any responsibility over the operation of the commercial cannabis business to
refuse to allow, impede, obstruct or interfere with an inspection, review or copying of
records and closed-circuit monitoring authorized and required under this article, including,
but not limited to, the concealment, destruction, and falsification of any recordings,
records, or monitoring.
Sec. 40-12. Violation and enforcement.
1. Violation/enforcement. Each and every violation of this article shall constitute a
separate violation and shall be subject to all remedies and enforcement measures
authorized by this Code. Additionally, as a nuisance per se, any violation of this article
shall be subject to injunctive relief, revocation of the commercial cannabis business
Ordinance No. NS-XXX
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Regulatory Safety Permit, revocation of the certificate of occupancy for the location,
disgorgement and payment to the City of any and all monies unlawfully obtained, costs
of abatement, costs of investigation, attorney fees, and any other relief or remedy
available at law or equity. The City may also pursue any and all remedies and actions
available and applicable under local and State laws for any violations committed by
the commercial cannabis business and persons related or associated with the
business.
2. Suspension or revocation. When an authorized City of Santa Ana representative finds
that any person holding a Regulatory Safety Permit under the provisions of Chapter
40 has violated the provisions of this chapter or is found guilty of conduct which would
form the basis of denial of the Regulatory Safety Permit as set forth in Article XIII of
this Chapter 18, s/he may revoke or suspend the permit. No such revocation shall
become effective until the Regulatory Safety Permit holder has been notified in writing
by certified mail of the right to appeal the revocation decision pursuant to the
provisions or Chapter 3 of this Code. If a timely appeal is filed, the revocation shall be
effective only upon decision of a hearing officer as provided for in Chapter 3 of the
Santa Ana Municipal Code. Otherwise, the revocation shall become effective after the
timely appeal period has passed.
3. State License Suspension/Revocation. Revocation or suspension of a Licensee's
State issued commercial cannabis business permit or license by the State shall
constitute a violation of this article and result in revocation of the Licensee's RSP.
Sec. 40-13. Transfer of ownership.
1. Upon the transfer of any interest in a commercial cannabis business, the Regulatory
Safety Permit shall be null and void. Any person, firm or entity desiring to own and
operate the commercial cannabis business shall make a new Regulatory Safety
Permit application. Prior to or concurrent with the submission of said application the
transferee shall obtain all required business licenses, post all required security
deposits, acquire all necessary, certificates, permits or other licenses allowing the
doing of any act which the person paying or holding the same would not otherwise be
entitled to do; and any permit, license, variance or other instrument of approval or
evidence that any conditions exist as required by any other section of this Code or by
any statute or code provisions of the state must first be obtained or complied with
before the doing of any act or thing for which it is required. A fee as established by
resolution of the City Council shall be payable for each such application involving
transfer of any interest in an existing commercial cannabis retail business. The
provisions of this section shall apply to any person, firm, or entity applying for a
Regulatory Safety Permit for premises previously used as such establishment.
2. Any such transfer of any interest in an existing commercial cannabis business or any
application for an extension or expansion of the building or other place of business of
Ordinance No. NS-XXX
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the commercial cannabis retail business shall require inspection and compliance with
section 40-11 of this article.
3. The owner or operator of a commercial cannabis business shall be responsible for
notifying the City of any intention to rename, change management, or convey the
business to another person/entity. Notification to the City must be made a minimum
of sixty (60) days prior to such transfer.
Sec. 40-14. Limitations on the city's liability.
To the fullest extent permitted by law, the City shall not assume any liability whatsoever,
with respect to approving any Regulatory Safety Permits pursuant to this article or the
operation of any commercial cannabis business approved pursuant to this chapter. As a
condition of approval of a Regulatory Safety Permit as provided in this chapter, the
applicant or its legal representative shall:
1. Execute an agreement indemnifying the City from any claims, damages, injuries or
liabilities of any kind associated with the registration or operation of the commercial
cannabis business or the prosecution of the applicant or business or its members for
violation of federal or State laws;
2. Maintain insurance in the amounts and types that are acceptable to the City Attorney
or his or her designee;
3. Name the City as an additionally insured on all City required insurance policies;
4. Agree to defend, at its sole expense, any action against the City, its agents, officers,
and employees related to the approval of a Regulatory Safety Permit; and,
5. Agree to indemnify and reimburse the City for any court costs and attorney fees that
the City may be required to pay as a result of any legal challenge related to this
ordinance and/or the City's approval of a Regulatory Safety Permit. The 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.
Sec. 40-15. Fees and taxes.
All commercial cannabis businesses shall pay applicable fees and taxes, which shall
include one (1) or more of the following:
1. Application Fees. The business owner shall submit a non-refundable fee to cover the
cost of processing an application for the commercial cannabis business. These fees
may be divided into two (2) fees according to Registration Application Fee (Phase 1)
and RSP Application Fee (Phase 2).
2. Regulatory Safety Permit Renewal Fees. The business owner shall submit a non-
refundable fee to cover the cost of processing an application renewal annually.
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3. Business License Taxes. The business owner shall at all times maintain a current and
valid City of Santa Ana business license and shall pay all business license taxes,
deposits, charges, fees, deficiencies, penalties, interest, and other associated
assessments as may be required pursuant to ordinances of the City of Santa Ana
and/or the Santa Ana Municipal Code.
4. Operating Agreement Fees.
5. Additional cannabis-specific gross receipts, excise taxes, or other municipal tax
approved by the voters of the City of Santa Ana.
6. All required state taxes including sales and use taxes, business/franchise or income
taxes, payroll taxes, etc.
7. All required federal taxes.
Sec. 40-16. Tax Rates for Qualified Social Equity Commercial Cannabis Retail
Business Operators.
Commercial cannabis retail businesses opting-in to the social equity measures described
in this subsection shall, upon confirmation of their certification as a Qualified Social Equity
Commercial Cannabis Business Operator by the City of Santa Ana Planning and Building
Agency, be eligible for the applicable rate of Commercial Cannabis Retail Business taxes
payable on the socially equitable retail activities specified in their City of Santa Ana
business license(s), as set forth in Section 21-133(d) of the Santa Ana Municipal Code.
These activities are to include: Socially Equitable Adult-use Cannabis Retail Business
(including Delivery and Consumption Lounge) and Socially Equitable Adult-use Cannabis
Retail Business Temporary Consumption and/or Special Events. Qualified Social Equity
Commercial Cannabis Retail Business tax rates become effective on the first day of the
first calendar month following the issuance of a confirmation of qualification notification
as set out hereunder by the City of Santa Ana Executive Director of the Planning and
Building Agency or his or her designee.
A Commercial Cannabis Retail Business seeking certification as a Qualified Social Equity
Commercial Cannabis Retail Business shall provide documentation showing that it
commits to and satisfies the following social equity measures to be eligible for Socially
Equitable Adult-use Cannabis Retail Business tax rates:
1. Full-time jobs. Sixty percent (60%) of its workforce is hired for full-time work (paid
hourly wages for an average of at least 32 hours per week or 1,664 hours per year).
2. Wages. Employees, not including supervisors, must receive wages that exceed 115
percent of the California minimum wage at the time of hire. This wage shall increase
to 120 percent within three years of the effective date of this Ordinance.
3. Delivery Drivers. Delivery drivers must be reimbursed for mileage according to the
Internal Revenue Service’s Standard Mileage Rates.
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4. High Road Training Partnerships. Applicant participates in a High Road Training
Partnership of the sort defined by Unemployment Insurance Code Section 14005 as
amended from time to time and that is recognized by the State of California.
5. Social Equity Policy. The commercial cannabis retail business owner maintains a
written social equity policy that describes:
a. How the cannabis retail business owner aims to recruit, hire, and retain employees
who reside in low-income census tracts in Santa Ana where at least fifty-one
percent (51%) of the current residents have a household income at or below eighty
percent (80%) of the County Area Median Income;
b. How the cannabis retail business owner will partner with Community Benefit
Organizations or its High Road Training Program to recruit, hire, and retain
employees arrested or convicted for a crime relating to the sale, possession, use
or cultivation of cannabis prior to November 8, 2016 that could have been
prosecuted as a misdemeanor or citation under Current California law, or currently
receiving unemployment benefits.
c. Any other measures or employee benefits aimed to address the disproportionate
impact of the War on Drugs in certain communities affected by it.
6. Equity Opportunities.
a. An “Equity Employee” is a natural person who resides in low-income census tracts
in Santa Ana where at least fifty-one percent of the current residents have a
household income at or below eighty percent (80%) of the County Area Median
Income.
b. On or before Jan 1, 2024, Applicants must demonstrate that forty percent (40%)
of all employees employed in the last tax period were Equity Employees, or
demonstrating that hourly, non-supervisorial employees receive employee stock
ownership options or other equity.
7. Local Hiring. The commercial cannabis business owner demonstrates that:
a. Beginning January 1, 2023, the cannabis retail business owner demonstrates that
twenty percent (20%) of its employees reside within the City of Santa Ana, then
b. Beginning January 1, 2024, the cannabis retail business owner demonstrates that
forty percent (40%) of its employees reside within the City of Santa Ana.
The Executive Director of the Planning and Building Agency or his or her designee shall
determine whether each RSP application demonstrates compliance with this article as
prescribed by Section 40-16 of this Chapter, and as prescribed by subsections 1 and 2
below. The Director or his or her designee shall notify the Finance and Management
Services Agency of the outcome of the application as either eligible or ineligible for the
socially equitable Adult-use Cannabis Retail Business tax rates referenced by this
subsection.
1. To demonstrate conformance with the social equity measures promulgated by Section
40-16 of this Chapter, commercial cannabis retail business owners must submit an
attestation form signed by a Bona Fide Labor Organization, as defined by Section 40-
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2 (19) of this Chapter, and a copy of an active Collective Bargaining Agreement with
a Bona Fide Labor Organization that indicates the business is in compliance with the
social equity measures of this subsection. The City may require any supplemental
documentation as needed to review and verify the submitted attestation.
2. Proof of active participation in High Road Training Partnership recognized by the State
of California can be demonstrated only by providing a signed letter on official
letterhead from an administrator or trustee of the 501(c)(3), 501(c)(4), or 501(c)(5)
entity responsible for managing the Training Partnership. The letter must confirm the
High Road Training Partnership’s State recognition and the business’s participation,
and shall describe the High Road Training Partnership, its constituent organizations,
goals, and trainings offered to cannabis employees. A copy of a grant contract with
the State of California that recognizes the program as a High Road Training
Partnership shall be attached to the letter.
The Responsible Agency shall create and maintain on file the required attestation form to
be signed by a Bona Fide Labor Organization.
Sec. 40-17 to 40-99. Reserved.
Section 7. Article XIII of Chapter 18 of the Santa Ana Municipal Code (Medicinal
Marijuana Collectives/Cooperatives) is hereby deleted in its entirety, renamed
“Reserved,” and re-adopted and amended as Article II of Chapter 40 of the Santa Ana
Municipal Code to read as “Regulation of Commercial Cannabis Medicinal Retail
Activities” as follows:
ARTICLE II. – REGULATION OF COMMERCIAL CANNABIS MEDICINAL RETAIL
ACTIVITIES
Sec. 40-100. Purposes and intent.
It is the purpose and intent of this article to regulate the collective distribution of medical
marijuana at a commercial cannabis retail business in order to ensure the health, safety
and welfare of the residents of the City of Santa Ana. The regulations in this article, in
compliance with the Compassionate Use Act, the Medical Marijuana Program Act, and
the California Health and Safety Code (collectively referred to as "State Law") do not
interfere with a patient's right to use medical marijuana as authorized under State Law,
nor do they criminalize the possession or cultivation of medical marijuana by specifically
defined classifications of persons, as authorized under State Law. Under State Law, only
qualified patients, persons with identification cards, and primary caregivers may cultivate
medical marijuana collectively. Businesses operating as medical marijuana collectives
shall comply with all provisions of the Santa Ana Municipal Code, State Law, the 2008
California Attorney General Guidelines for the Security and Non-Diversion of Marijuana
Grown for Medical Use, and all other applicable local laws. Nothing in this article purports
to permit activities that are otherwise illegal under state or local law.
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Sec. 40-101. Definitions.
(a) "Medical marijuana collective" or "cooperative" or "collective" means any facility
otherwise known as a commercial cannabis medicinal retail or retailer, or location
where medical marijuana is made available and/or distributed by or to one (1) or
more of the following: a primary caregiver, a qualified patient or a person with an
identification card in strict accordance with California Health and Safety Code §
11362.5 et seq., as sometimes amended. This term shall include any legal form of
business recognized in the State of California. A "medical marijuana collective"
shall not include the following uses, as long as the location of such uses are
otherwise regulated by this Code or applicable law: a clinic licensed pursuant to
Chapter 1 of Division 2 of the Health and Safety Code, a health care facility
licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code, a
residential care facility for persons with chronic life-threatening illness licensed
pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code, a residential
care facility for the elderly licensed pursuant to Chapter 3.2 of Division 2 of the
Health and Safety Code, a residential hospice or a home health agency licensed
pursuant to Chapter 8 of Division 2 of the Health and Safety Code, as long as such
use complies strictly with applicable law including, but not limited to, Health and
Safety Code Section 11362.5 et seq.
(b) "Identification card" shall have the same definition as that contained in Health and
Safety Code § 11362.7 et seq., as sometimes amended.
(c) "Manager" means any person responsible for the establishment, organization,
supervision, or oversight of the operation of a Collective, including, but not limited
to, members who perform the functions of president, vice-president, director,
operating officer, financial officer, secretary, or treasurer. Ability to control one (1)
or more of the following functions shall be prima facie evidence that such person
is a manager:
(1) To hire, select, or separate employees or staff, including volunteers;
(2) To acquire facilities, furniture, equipment or supplies other than occasional
replenishment of stock;
(3) To disburse funds of the business other than occasional expenditures for
replenishment of stock; or
(4) To make, or participate in making, policy decisions relative to the operations
of the business.
(d) "Marijuana" shall have the same definition as that contained in Health and Safety
Code § 11018 as sometimes amended.
(e) "Medical marijuana" shall have the same definition as that contained in Health and
Safety Code § 11362.5 et seq., as sometimes amended.
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(f) "Primary caregiver" shall have the same definition as that contained in Health and
Safety Code §§ 11362.5 and 11362.7, as sometimes amended.
(g) "Qualified patient" shall have the same definition as that contained in Health and
Safety Code § 11362.5 as sometimes amended.
(h) "Private Residence" shall have the same definition as that contained in Health and
Safety Code §§ 11362.2(5) and 17922. A recreational vehicle does not constitute
a lawfully established structure for the purposes of this article.
(i) "Premises" means a single, legal parcel of property. Where contiguous legal
parcels under common ownership or control, such contiguous legal parcels shall
constitute a single "premises" for purposes of this chapter.
(j) "Marijuana Products" shall have the same definition as that contained in Health
and Safety Code § 11018.1.
(k) "Marijuana Accessories" shall have the same definition as that contained in Health
and Safety Code § 11018.2.
(l) "Personal Cultivation" shall mean the planting, growing, harvesting, drying, curing,
grading or trimming of marijuana plants for personal use within a private residence
or accessory structure to a private residence.
(m) "Fully enclosed and secure structure" means a space within a building,
greenhouse or other structure which has a complete roof enclosure supported by
connecting walls extending from the ground to the roof, which is secure against
unauthorized entry, provides complete visual screening, and which is accessible
only through one (1) or more lockable doors.
(n) "Dispensary" means a premises where medical cannabis or medical cannabis
products, or devices for the use of medical cannabis or medical cannabis products
are offered, either individually or in any combination, for retail sale, including an
establishment that delivers, pursuant to Business and Professions Code § 19340,
medical cannabis and medical cannabis products as part of a retail sale.
Sec. 40-102. Scope of article.
The operating standards established in this article apply to any site, facility, location, use,
cooperative or business currently operating in the City of Santa Ana, or which commences
operations after the effective date of this article, that distributes, dispenses, stores, sells,
exchanges, processes, delivers, or gives away, medical marijuana to qualified patients,
health care providers, patients' primary caregivers, or physicians, pursuant to Health &
Safety Code § 11362.5 (adopted as Proposition 215, the "Compassionate Use Act of
1996") or any state regulations adopted in furtherance thereof. Any collective in the City
of Santa Ana shall operate in conformance with the operating standards set forth in this
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Code to assure that the operations of the collective are in compliance with California law
and to mitigate the adverse secondary effects from operations of dispensaries.
Sec. 40-103. Operating Standards.
(a) No recommendations from a doctor for medical marijuana shall be issued on-site.
(b) A collective shall only dispense medical marijuana to qualified patients and their
caregivers as defined by California Health and Safety Code § 11362.5 (Proposition
215). This shall include possession of an original valid doctor's recommendation, not
more than one (1) year old, for medical marijuana use by the patient.
(c) A collective shall notify patrons of the following through posting of a sign in a
conspicuous location:
(1) Use of medical marijuana shall be limited to the patient identified on the
doctor's recommendation. Secondary sale, barter or distribution of medical
marijuana is a crime and can lead to arrest.
(2) That loitering on and around the collective site is prohibited by California Penal
Code § 647(e) and that patrons must immediately leave the site and not consume
medical marijuana in the vicinity of the collective or on the property or in the parking
lot.
(3) Forgery of medical documents is a felony crime.
(4) A warning that patrons may be subject to prosecution under federal marijuana
laws.
(5) That the use of medical marijuana may impair a person's ability to drive a motor
vehicle or operate machinery.
(d) A collective shall not provide marijuana to any individual in an amount not consistent
with personal medical use
(e) Marijuana shall not be grown or cultivated at collective sites, except that cuttings of
the marijuana plant may be kept or maintained on-site for distribution to qualified
patients and primary caregivers as follows:
(1) The cuttings shall not be utilized by a collective as a source for the provision
of marijuana for consumption on-site, however, upon provision to a qualified patient
or primary caregiver, that person may use the cuttings to cultivate marijuana plants
off-site for their own use and they may also return marijuana from the resulting
mature plant for distribution by the collective.
(2) For the purposes of this paragraph, the term "cutting" shall mean a rootless
piece cut from a marijuana plant, which is no more than six (6) inches in length, and
which can be used to grow another plant in a different location.
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(f) A collective shall comply with applicable provisions of the California Health and
Safety Code §§ 11362.5 through 11362.83, inclusive.
Sec. 40-104 Medical Marijuana Waitlist.
(a) Pursuant to Ordinance No. NS-2864, adopted December 9, 2014, the Director of
Planning and Building shall prepare Cooperative/Collective registration application
forms and a related administrative policy. Each collective interested in operating
pursuant to this article may submit an application together with a non-refundable
processing fee in an amount established by the City Council. Within 60 days after the
adoption of Ordinance No. NS-2864, the Director shall stop accepting applications and
process all applications received.
(b) The Director or his or her designee shall have determined whether each application
demonstrates compliance with this article. Each application that is in compliance with
this article shall be placed on the "Qualified Registration Applicant List" and the
Director shall notify the applicant in writing that it is a "Qualified Registration
Applicant."
(c) Once all applications are processed, the Director shall have held an independent
selection process ("lottery") in an open and public location and select 20 applications.
The 20 applications chosen through the independent selection process (lottery) will
be placed on the "Regulatory Safety Permit ("RSP") Eligibility List." Each applicant on
the RSP Eligibility List may then choose to file an application for a RSP pursuant to
section 40-9. All applicants identified on the RSP Eligibility List following the February
5, 2015 independent selection process (lottery) shall be required to concurrently: (1)
File an application for an RSP and (2) Submit all required construction plans for plan
check by the City by March 30, 2023, subject to the requirements of this Chapter and
other applicable chapters of the Santa Ana Municipal Code, and be operational with
sustained business activity within 180 days of construction permit issuance. An
extension may be issued for a period of time as may be reasonably required to affect
upgrades, modifications, repairs, or other property issue mitigations as approved by
the Director of Planning and Building or his or her designee. Failure to satisfy these
requirements by that deadline will disqualify the applicant from the RSP Eligibility List
and the Waitlist described in subsection (d). Relocation is permitted pursuant to
Section 40-7 of this Chapter.
(d) Qualified Registration Applicants will appear on the "Qualified Registration Applicant
List" in the order that they are selected during the independent selection process
(lottery). This list is the Waitlist. The Waitlist will become active if (1) an applicant on
the RSP Eligibility List is disqualified from that List; (2) a location appearing on the
RSP Eligibility List becomes available; or (3) a location not appearing on the RSP
eligibility list becomes available. A Qualified Registration Applicant's ability to move
from the Waitlist to the RSP Eligibility List is determined by the applicant's proposed
medical marijuana collective location and the applicant's position on the Waitlist.
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(e) A Qualified Registration Applicant that moves from the Waitlist to the RSP Eligibility
List must submit a completed RSP application within three (3) months following
issuance of a written notice advising the applicant of that opportunity. Failure to submit
a completed RSP application by that deadline will disqualify the applicant from the
RSP Eligibility List and the Waitlist.
(f) The Director shall maintain the Waitlist and update it on an annual basis unless
terminated pursuant to subsection 40-104 (g) through (j). A Qualified Registration
Applicants on that Waitlist must submit a written request each year to maintain its
status on the waitlist.
(g) Relocation of an existing and licensed medical marijuana collective or medical
marijuana cooperative as defined in Article II of this Chapter that is operating in full
compliance with the provisions of this Article is permitted subject to Section 40-7 of
this Chapter.
Sec. 40-105. Maintenance of records.
A medical marijuana collective shall maintain records at the location accurately and
truthfully documenting:
(a) The full name, address, and telephone number(s) of the owner, landlord and/or lessee
of the location;
(b) The full name, address, and telephone number(s) of all members who are engaged in
the management of the collective and the exact nature of each member's participation
in the management of the collective;
(c) The full name, address, and telephone number(s) of all patient members to whom the
collective provides medical marijuana, a copy of a government-issued identification
card for all patient members;
(d) The full name, address, and telephone number(s) of all primary caregiver members to
whom the collective provides medical;
(e) All receipts of the collective, including but not limited to all contributions,
reimbursements, and reasonable compensation, whether in cash or in kind, and all
expenditures incurred by the collective for the cultivation of medical marijuana; and
(f) Proof of compliance with the California Attorney General Guidelines for the Security
and Non-Diversion of Marijuana Grown for Medical Use.
These records shall be maintained by the collective for a period of five (5) years and shall
be made available by the collective to the police department and/or community
preservation division upon request. If they are not produced as requested the city may
seek a search warrant, subpoena, or court order. In addition to all other formats that the
collective may maintain, these records shall be stored by the collective at the location in
a printed format in its fireproof safe. Any loss, damage or destruction of the records shall
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be reported to the police department within twenty-four (24) hours of the loss, destruction
or damage.
Sec. 40-106. Audits – Cooperatives/Collectives.
Annual audits. No later than September 30 of every year, each licensed medical
marijuana collective shall be liable to file with the city an independent audit or financial
review of its operations of the previous calendar year. Provided, however, that licensed
collectives which operate on a vertically or horizontally integrated basis as established in
Chapter 21, Article XII of this Code, or that are co-located on shared premises may file a
consolidated audit or independent financial review. The form and contents of the
document shall be specified by the executive director of finance and management
services, or his/her designee(s). The Executive Director of Finance and Management
Services, or his or her designee(s) may waive this requirement for certain licensed
collectives in accordance with guidelines established by the Finance and Management
Services Agency.
Sec. 40-107. Applicability to existing medical marijuana operations.
Any existing medical marijuana collective, dispensary, operator, establishment, or
provider that does not comply with the requirements of this article must immediately cease
operation until such time, if any, when it complies fully with the requirements of this article.
No medical marijuana collective, dispensary, operator, establishment, or provider that
existed prior to the enactment of this article shall be deemed to be a legally established
use under the provisions of this article, and such medical marijuana collective,
dispensary, operator, establishment, or provider shall not be entitled to claim legal
nonconforming status.
Sec. 40-108. Compliance with this article and state law.
(a) It is unlawful for any person to:
i. Cause, permit or engage in the giving away of marijuana, or
ii. Own, establish, operate, use or permit the establishment or operation of a medical
marijuana collective or cooperative, or to participate as an employee, contractor,
agent, responsible person or volunteer of a collective or cooperative, except as
provided in this article, and pursuant to any and all other applicable local and state
laws.
iii. The prohibition in subsection (ii) above includes, renting, leasing, or otherwise
permitting a medical marijuana business to occupy or use a location, vehicle, or
other mode of transportation.
(b) It is unlawful for any person to cause, permit or engage in any activity related to
medical marijuana except as provided in Health and Safety Code § 11362.5 et seq.,
and pursuant to any and all other applicable local and state laws.
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(c) It is unlawful for any person to knowingly make any false, misleading or inaccurate
statements or representations in any forms, records, filings or documentation required
to be maintained, filed or provided to the City under this article, or to any other local,
state or federal government agency having jurisdiction over any of the activities of
collectives.
(d) It shall be the sole responsibility of the members engaged in the management of the
collective to ensure that the collective is at all times operating in a manner compliant
with all applicable state laws and this article. Nothing in this article shall be construed
as authorizing any actions which violate state law with regard to the cultivation,
transportation, provision, and sale of medical marijuana.
(e) Cultivation of Marijuana.
(1) Personal Cultivation. Individuals twenty-one (21) years of age or older may plant,
cultivate, harvest, dry, or process up to six (6) living marijuana plants for personal
(non-commercial) use in a private residence or accessory structure to a single
private residence in the City of Santa Ana and must comply with the following
requirements:
i. The marijuana cultivation area shall be located indoors within a private
residence or accessory structure on a single parcel of property;
ii. No more than six (6) living marijuana plants is permitted for indoor personal
cultivation;
iii. Marijuana in excess of twenty-eight and one-half (28.5) grams produced by
plants kept for indoor personal cultivation must be kept in a locked space on
the grounds of the private residence not visible from the public right-of way.
iv. There shall be no exterior visibility or evidence of marijuana cultivation outside
the private residence from the public right-of-way, including but not limited to
any marijuana plants, equipment used in the growing and cultivation operation,
or any light emanating from the cultivation; or
v. The cultivation may not violate any California Building, Electrical or Fire Codes
or any other health and safety standards.
(2) Commercial Cultivation. Commercial cultivation of marijuana or cannabis is
prohibited anywhere in the City except as allowed and regulated in Article I of this
Chapter.
(3) Outdoor Cultivation. Outdoor commercial cultivation of marijuana or medical
marijuana is prohibited anywhere in the City. No person, including a qualified
patient or primary caregiver, shall engage, permit, or participate in the outdoor
commercial cultivation of marijuana in the City.
(4) Public Nuisance Prohibited.
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(i) It is hereby declared to be unlawful and a public nuisance for any person
owning, leasing, occupying, or having charge or possession of any parcel within
the City to create a public nuisance in the course of cultivating marijuana plants
or any part thereof in any location, indoor or outdoor, except as allowed and
regulated in Chapter 40 of the Santa Ana Municipal Code. A public nuisance
may be deemed to exist, if such activity produces:
(1) Odors which are disturbing to people of reasonable sensitivity residing or
present on adjacent or nearby property or areas open to the public;
(2) Repeated responses to the parcel by law enforcement personnel;
(3) A repeated disruption to the free passage of persons or vehicles in the
neighborhood, excessive noise which is disturbing to people of normal
sensitivity on adjacent or nearby property or areas open to the public;
(4) Any other impacts on the neighborhood which are disruptive of normal
activity in the area including, but not limited to, grow lighting visible outside
the dwelling, excessive vehicular traffic or parking occurring at or near the
dwelling, and excessive noise emanating from the dwelling.
(5) Outdoor and Commercial growing and cultivation of marijuana, except as
allowed and regulated in Chapter 40 of the Santa Ana Municipal Code.
(f) A permitted medical marijuana dispensary may deliver medical marijuana only to a
qualified patient or caregiver. Medical marijuana delivery services by dispensaries
possessing regulatory safety permits must comply with Business and Professions
Code §19340. Delivery of cannabis from a dispensary permitted pursuant to this
Chapter can only be made in a city or county that does not expressly prohibit it by
ordinance. Delivery services by dispensaries not in possession of regulatory safety
permits is expressly prohibited.
(g) Non-Retail Commercial Cannabis Businesses for Medicinal and Adult-Use Cannabis
as defined in Article I of Chapter 40 of the Santa Ana Municipal Code (SAMC) are
permitted subject to the regulations and standards contained within Chapter 40 of the
SAMC.
Section 8. Section 21-127 of Article XII of Chapter 21 of the Santa Ana Municipal
Code is hereby amended to read in full as follows:
Sec. 21-127. - Marijuana collectives/cooperatives—Annual business license tax
assessment.
(a) Annual business license tax assessment for marijuana collectives/cooperatives.
(1) Every collective/cooperative whether it is organized or conducted as a "not
for profit" business, a "non-profit" business, or a "for-profit" business, shall
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pay an annual business license tax in accordance with Chapter 21 and the
sections and subsections hereunder.
(2) For the purposes of this article, a marijuana collective/cooperative is defined
in section 40-101(b) and is considered to be a business as that term is
defined in section 21-3.
(3) For the purposes of this article, a collective/cooperative is not considered to
be a religious or charitable organization.
(4) "Medical marijuana collective/cooperative" or "collective/cooperative" shall
mean any activity regulated or permitted by chapter 40.
(5) For the purposes of this article, a marijuana collective/cooperative is not
considered to be a business or person having a "specified exemption" or
"specified exclusion" from business license taxation as set forth in sections
21-48 and 21-49.
(6) For the purposes of this article, a "nonprofit organization" shall mean any
institution or organization that is exempted from taxes measured by income
or gross receipts pursuant to Article XIII, Section 26 of the California
Constitution as codified under Chapter 4 (commencing with Section 23701)
of Part 11 of Division 2 of the Revenue and Taxation Code and Section
37101 (c) of the Government Code or Sub-Chapter F (commencing with
Section 501) of Chapter 1 of Subtitle A of the Internal Revenue Code of
1986. An institution or organization operating as a collective/cooperative
and claiming a gross receipts assessment business license tax exemption
under this section shall have the burden of furnishing to the collector such
information as the collector may require to validate the claim of exemption
including but not limited to such a determination by the California Franchise
Tax Board or any other information requested by the collector.
(7) For the purposes of this article, "gross receipts" shall mean any transfer of
title or possession, exchange or barter, conditional or otherwise, in any
manner or by any means whatsoever, of tangible personal property for a
consideration including any monetary consideration for marijuana
whatsoever, including, but not limited to, membership dues,
reimbursements provided by members, regardless of form, or the total
amount of cash or in-kind contributions, including all operating costs related
to the growth, cultivation or provision of marijuana or any transaction related
thereto. "Gross receipts" shall also include without limitation anything else
of value obtained by a collective/cooperative. The term "gross receipts"
shall also include the total amount of the sale price of all sales, the total
amount charged or received for the performance of any act, service or
employment of whatever nature it may be, whether or not such service, act
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or employment is done as a part of or in connection with the sale of goods,
wares, merchandise, for which a charge is made or credit allowed, including
all refunds, cash credits and properties of any amount or nature, any
amount for which credit is allowed by the seller to the purchaser without any
deduction therefrom, on account of the cost of the property sold, the cost of
materials used, the labor or service cost, interest paid or payable, losses,
or any other expense whatsoever; provided that cash discounts allowed or
payment on sales shall not be included. "Gross receipts" shall also include
the amount of any federal, manufacturer's or importer's excise tax included
in the price of property sold, even though the manufacturer or importer is
also the retailer thereof and whether or not the amount of such tax is stated
as a separate charge. "Gross receipts" shall not include the amount of any
federal tax imposed on or with respect to retail sales whether or not the
amount of such tax is stated as a separate charge. "Gross receipts" shall
not include the amount of any federal tax imposed on or with respect to retail
sales whether imposed upon the retailer or the consumer and regardless of
whether or not the amount of federal tax is stated to customers as a
separate charge, or any California state, city or city and county sales or use
tax required by law to be included in or added to the purchase price and
collected from the consumer or purchaser, or such part of the sales price of
any property previously sold and returned by the purchaser to the seller
which is refunded by the seller by way of cash or credit allowances given or
taken as part payment on any property so accepted for resale. "Gross
receipts" shall be calculated without any deduction on account of any of the
following:
(i) The cost of tangible property sold or bartered;
(ii) The cost of materials or products used, labor or service cost,
interest paid, losses, or other expense; or
(iii) The cost of transportation of the marijuana, or other property or
product.
(b) Business license tax rates for marijuana collectives/cooperatives.
(1) Every collective/cooperative, excepting a qualified "nonprofit organization,"
whether it is organized or conducted as a "not for profit" business, a "non-
profit" business, or a "for-profit" business, shall pay a separate business
license tax at a rate of up to ten (10) percent of the gross receipts generated
or otherwise received for each branch establishment or separate property
location of the business. The gross receipts tax shall be initially set at a rate
of five (5) percent. The maximum tax rate shall not exceed ten (10) percent
of gross receipts. This tax shall not be adjusted for inflation pursuant to
section 21-121.
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(2) Notwithstanding the maximum tax rate of ten (10) percent of gross receipts
imposed under subsection (b)(1), the city council may in its discretion at any
time by ordinance implement a lower gross receipts tax rate for all marijuana
collectives/cooperatives, as defined in such ordinance, subject to the
maximum rate of ten (10) percent of gross receipts. The city council may by
ordinance increase any such gross receipts tax rate from time to time, not
to exceed the maximum gross receipts tax rate established under
subsection (b)(1).
(3) Effective January 1, 2018, the gross receipts tax initially set at a rate of five
(5) percent pursuant to subsection (b)(1), shall be increased to a rate of six
(6) percent. The maximum tax rate shall not exceed ten (10) percent of
gross receipts. This tax rate shall not be adjusted for inflation pursuant to
section 21-121.
(4) Effective January 1, 2023, the gross receipts tax is set at a rate of six (6)
percent pursuant to subsection (b)(3), shall be decreased to a rate of five
(5) percent. The maximum tax rate shall not exceed ten (10) percent of
gross receipts. This tax rate shall not be adjusted for inflation pursuant to
section 21-121.
(5) As part of the gross receipts tax imposed by this article, each
collective/cooperative shall pay a minimum basic rate of two thousand
dollars ($2,000.00) annually for each separate branch location or separate
property location of the business.
(c) Modification, repeal or amendment. The city council may repeal the ordinance
codified in this article, or amend it in a manner which does not result in an increase
in the tax or taxes imposed herein, without further voter approval. The city council
may likewise by ordinance adopt and add additional provisions to any other article
of this chapter and relate them to this article, or amend any existing provisions of
any article of this chapter as they may already relate to this article in any manner
which does not result in an increase in the tax or taxes imposed herein, without
further voter approval. If the city council repeals said ordinance or any provision of
this article, it may subsequently reenact it without voter approval, as long as the
reenacted ordinance or section does not result in an increase in the tax or taxes
imposed herein.
(d) Administration—Rules, regulations, and guidelines; interpretation/clarification. In
order to aid in the city's collection of taxes due under this article and to ensure that
all marijuana collectives/cooperatives are taxed consistently to the best of the city's
ability, the collector, with the concurrence of the city attorney, may promulgate rules,
regulations, and guidelines, to implement and administer this article including, but
not limited to rules, regulations, and guidelines harmonizing other provisions of this
chapter with the provisions of this article in any manner not inconsistent with the
Ordinance No. NS-XXX
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intent of this article and which does not result in an increase in the tax or taxes
imposed herein. The collector may also, with the concurrence of the city attorney,
interpret or clarify the methodology of the tax, or any definition applicable to the tax,
so long as such interpretation or clarification (even if contrary to some prior
interpretation or clarification) is not inconsistent with the language of this article.
(e) Occasional transactions—Exemptions.
(1) The provisions of this article shall not apply to persons having no fixed place of
business within the city who come into the city for the purpose of transacting a
specific item of marijuana collective/cooperative business at the request of a
specific patient, client or customer, provided that such person does not come
into the city for the purpose of transacting business on more than five (5) days
during any calendar year.
(2) For any person not having a fixed place of business within the city who comes
into the city for the purpose of transacting collective/cooperative activities, the
business tax payable by such person may be apportioned by the collector in
accordance with this chapter.
(f) Reporting and remittance. Beginning as set forth in subsection (k) below, and
monthly thereafter, each marijuana collective/cooperative (except qualified nonprofit
organizations exempt from taxes measured by income or gross receipts) required to
pay a tax based on gross receipts under this article, shall report to the city any gross
receipts received during the preceding monthly reporting period and shall likewise
remit to the city the taxes due and owing during said period. For purposes of this
section, month shall mean calendar month, and taxes shall begin to accrue on the
date that a person or entity first receives a business license or other permit to
operate as a collective/cooperative.
The payment of the two thousand dollars ($2,000.00) minimum basic rate gross
receipts tax required annually for each separate branch location or separate property
location of the business in accordance subsection (b)(3), shall be made annually
prior to the beginning of the fiscal year beginning April first of the current year and
expiring on the 31st day of March of the following year. In the case of a new
collective/cooperative the minimum basic rate gross receipts tax shall be paid in
advance prior to any new business activity being undertaken. Every new licensee
shall pay in advance an amount equal to one-quarter (¼) of the annual minimum
basic rate gross receipts tax, for each quarter and fraction of a quarter remaining
during the period for which the new license is issued.
(g) Delinquent date—Penalty. Any individual or entity who fails to pay the taxes required
by this article when due shall be subject to penalties and interest as set forth in
accordance with this chapter. The collector is not required to send a delinquency or
other notice or bill to any person subject to the provisions of this chapter and failure
Ordinance No. NS-XXX
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to send such notice or bill shall not affect the validity of any tax or penalty due under
the provisions of this chapter.
(h) Payment of tax does not authorize unlawful business.
(1) The payment of a business tax required by this article, and its acceptance by
the city, shall not entitle any person to carry on any collective/cooperative
unless the person has complied with all of the requirements of this Code and
all other applicable laws, nor to carry on any collective/cooperative in any
building or on any premises in the event that such building or premises are
situated in a zone or locality in which the conduct of such collective/cooperative
is in violation of any law.
(2) No tax paid under the provisions of this article shall be construed as authorizing
the conduct or continuance of any illegal or unlawful business, or any legal
business in an illegal manner, or any business in violation of any ordinance of
the city. Nothing in this article implies or authorizes that any activity connected
with the distribution or possession of marijuana is legal unless otherwise
authorized and allowed by California and federal law. Nothing in this section
shall be applied or construed as authorizing the sale of marijuana.
(i) Business license tax certificate—Required. There are imposed upon all persons
engaged in transacting and carrying on any collective/cooperative business activity
in the city taxes in the amounts prescribed in this article. It shall be unlawful for any
person, either for him or herself or for any other person, to commence, transact or
carry on any business in the city without first having procured a business license
from the city under this chapter and having paid the taxes set forth in this article, and
without complying with any and all applicable provisions contained in this chapter.
The carrying on of any collective/cooperative without complying with all the
provisions of this article shall constitute a separate violation of this chapter for each
and every day that such collective/cooperative is so carried on.
(j) Classification of business license assessment type—Term and renewal. The
business license issued to marijuana collectives/cooperatives shall be classed as a
gross receipts assessment type, issued for the same term of license as set forth in
subsection 21-71(c) and shall be subject to renewal in accordance with sections 21-
72(c), 21-73(c), and 21-77.
(k) Operative date. Upon the approval by the majority of the voters of the city at the
November 4, 2014 general election, the taxes imposed by this article shall become
operative and shall be applied by the collector upon all marijuana
collectives/cooperatives.
(l) Operative date of increased or decreased gross receipts tax rate. The gross receipts
tax set initially at a rate of five (5) percent pursuant to subsection (b)(1) [(Ordinance
No. NS-2864, Section 5, adopted 12-9-14)] and increased to a rate of six (6) percent
Ordinance No. NS-XXX
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effective January 1, 2018, pursuant to subsection (b)(3) [(Ordinance No. NS-2930,
Section 8, adopted 11-21-17)], shall be decreased to a rate of five (5) percent
effective January 1, 2023, pursuant to subsection (b)(4) [(Ordinance No. NS-XXXX,
Section 8, adopted XX-XX-XX)].
(m) Notwithstanding the tax rates imposed herein under subsection (l), the City Council
may, in its discretion, at any time by resolution, implement any lower or higher tax
rate it deems appropriate, not to exceed the maximum rate established by
subsections (b)(2).
Section 9. Section 21-133 of Article XIII of Chapter 21 of the Santa Ana Municipal
Code is hereby amended to read in full as follows:
Sec. 21-133. Commercial cannabis businesses—Annual business license tax
assessment.
Every person engaged in a “commercial cannabis business” or “commercial
cannabis activity” shall pay an annual business license tax as outlined below. This Article
shall not apply, except with respect to medical marijuana cooperatives/collectives (also
referred to as medicinal commercial cannabis medicinal retail businesses) which are
vertically and/or horizontally integrated with commercial cannabis businesses, to medical
marijuana cooperatives/collectives which are governed by Article XII of this Chapter, or
to personal cultivation as defined in section 40-101(b) of this Code.
(a) For each branch establishment or separate property location of a commercial
cannabis business transacted and carried on in the city, and for each separate type
of commercial cannabis business conducted at the same location, the higher of the
two (2) following tax rates shall be due to the City for each monthly reporting period:
(1) Up to ten percent (10%) of each dollar of gross receipts received or
generated for each monthly reporting period.
(2) Up to $35.00 per square foot (annual tax rate) prorated monthly to one-
twelfth (1/12th) of the annual tax rate amount.
(b) These tax rates shall not be adjusted for inflation pursuant to section 21-121 of this
Chapter.
(c) Notwithstanding the tax rates imposed herein under subsection (a), the City Council
may, in its discretion, at any time by resolution, implement any lower tax rate it
deems appropriate, and may by resolution increase such tax rate from time to time,
not to exceed the maximum rates established by subsection (a).
(d) As of the operative date of this Article, the business license gross receipts tax rates
and square footage tax rates application to specific commercial cannabis business
activities have been established by city ordinance [(Ordinance No. NS-2962,
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Section 2 (Exhibit A-1), adopted 11-6-18; and Ordinance No. NS-2972, Section 7,
adopted 9-3-19)] and by the following resolutions as referenced herein below in
subsections (s), (t), and (u).
Commercial Cannabis Business Activity Gross Receipts
Tax Rate
Gross Square
Footage Tax
Rate
Adult-use Cannabis Retail Business (including Delivery)
(effective beginning December 21, 2018 through
December 31, 2022)
8% $ 25.00
Adult-use Cannabis Retail Business (including Delivery,
but not including Consumption Lounge and Temporary
Consumption and/or Special Events) (effective beginning
January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business (including Delivery
and Consumption Lounge)
(effective beginning January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business (Temporary
Consumption and/or Special Events)
(effective beginning January 1, 2023)
7% $ 0.00
Qualified Social Equity Adult-use Cannabis Retail Business
(including Delivery and Consumption Lounge)
(effective beginning January 1, 2023)
5% $ 25.00
Qualified Social Equity Adult-use Cannabis Retail Business
(Temporary Consumption and/or Special Events)
(effective beginning January 1, 2023)
5% $ 0.00
Cultivation
(effective December 21, 2018 through December 31,
2022)
6% $ 10.00
Cultivation
(effective beginning January 1, 2023) 1% $ 7.00
Distribution
(effective December 21, 2018 through December 31,
2022)
6% $ 4.00
Distribution
(effective beginning January 1, 2023) 1% $ 3.00
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With respect to commercial cannabis businesses not having a fixed place of
business within the city but conducting regular, non-incidental commercial cannabis
business activities within the city, such businesses shall be subject to the gross
receipts tax rate(s) pursuant to this Article based on the category/categories of
commercial cannabis activity conducted. However, such out-of-town commercial
cannabis businesses shall not be subject to any gross square footage tax rate(s).
(e) As part of the annual gross receipts/square footage tax(es) imposed by this Article,
each commercial cannabis business located within the city shall pay a minimum
Manufacturing
(effective December 21, 2018 through December 31,
2022)
6% $ 10.00
Manufacturing
(effective beginning January 1, 2023) 1% $ 3.00
Shared Manufacturing
(effective beginning January 1, 2023) 1% $ 0.00
Microbusinesses
(Tax rates apply proportionally to microbusiness’ activities
corresponding to Adult-use Retail [Adult-use Retail
(including Delivery)] / Cultivation / Manufacturing /
Distribution)
(effective October 4, 2019 through December 31, 2022)
Adult-use Retail
8%
Cultivation,
Distribution &
Manufacturing
6%
Adult-use Retail
$ 25.00
Cultivation &
Manufacturing
$ 10.00
Distribution
$ 4.00
Microbusinesses
(Tax rates apply proportionally to microbusiness’ activities
corresponding to Adult-use Retail [Adult-use Retail
(including Delivery, but not including Consumption Lounge
and Temporary Consumption and/or Special Events)] /
Cultivation / Manufacturing / Distribution)
(effective beginning January 1, 2023)
Adult-use Retail
7%
Cultivation,
Distribution &
Manufacturing
1%
Adult-use Retail
$ 25.00
Cultivation
$ 7.00
Distribution &
Manufacturing
$ 3.00
Testing Facility or Testing Laboratory
(effective December 21, 2018 through June 30, 2019) 5% $ 1.50
Testing Facility or Testing Laboratory
(effective July 1, 2019) 1% $ 1.50
Ordinance No. NS-XXX
Page 57 of 68
basic rate of two thousand dollars ($2,000.00) annually for each branch
establishment or separate property location of the commercial cannabis business
transacted and carried on in the city, and for each separate type of commercial
cannabis business conducted at the same location. Commercial cannabis
businesses having no fixed place of business within the city shall be exempted from
this requirement. Provided, however, as follows:
(1) that commercial cannabis microbusinesses shall pay a minimum basic rate of
two thousand dollars ($2,000.00) annually for each branch establishment or
separate property location of the commercial cannabis business transacted
and carried on in the city, but not for each separate type of commercial
cannabis business conducted at the same location; and
(2) that City licensed commercial cannabis retail businesses which are also
licensed by the City for adult-use cannabis retail business (temporary
consumption and/or special events), or socially equitable adult-use cannabis
retail business (temporary consumption and/or special events) shall pay a
minimum basic rate of two thousand dollars ($2,000.00) annually for each
branch establishment or separate property location of the commercial
cannabis business transacted and carried on in the city, but not for each
separate type of commercial cannabis retail business conducted at the same
location; and
(3) that whenever in the discretion of the Collector, for the purposes of more fully
achieving the intent of this Article, or to more efficiently and equitably
administer the provisions of this Article, additional administrative commercial
cannabis business licenses are required to allow the for the recognition of fee-
exempt activities, or to allow for the separate accounting and apportionment
of one or more taxable endeavors relating to sub-activities incorporated within
a consolidated commercial cannabis tax activity under subsection (d), then the
Collector shall require that the affected commercial cannabis business obtain
such administrative license(s), and in the case of taxable activities, separately
report and pay the applicable gross receipts tax(es) due under the
consolidated commercial cannabis tax activity to which said administrative
license(s) relate. In such case, the minimum basic rate of two thousand dollars
($2,000.00) annually per license, shall not be applied, however, such
administrative license(s) are subject to all other requirements under this
Chapter, including all applicable licensing charges and service fees.
(f) In the event the City should in the future permit additional categories of commercial
cannabis business activity, as may from time to time be licensed by the State of
California, such categories of commercial cannabis activities shall be subject to the
same maximum tax rates as imposed herein. The City may by ordinance of the City
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Council initially set the required gross receipts/gross square footage tax rates based
on category of cannabis business activity at lesser rates as may be deemed
appropriate by the City Council.
(g) For purposes of this Article, a commercial cannabis business is not considered to
be a business or person having a “specified exemption” or “specified exclusion” from
business license taxation as set forth in sections 21-48 and 21-49 of this Chapter.
(h) For purposes of this Article any person claiming an exemption from the gross
receipts tax rate component of the combined gross receipts/square footage tax
imposed under this Article on the basis of a claim of being a qualified "nonprofit
organization" shall have the burden of substantiating their claim to the same extent
and in the same manner as a marijuana collective/cooperative in accordance with
section 21-127(a)(6) of this Chapter.
(i) Cannabis businesses shall not pass the taxes imposed by this Article through to an
adult-use cannabis retail business customer or commercial cannabis business
customer in any fashion except as part of the basic product sales and/or service
price.
(j) Definitions. For purposes of this Article, the following terms have the following
meanings:
(1) “Adult-Use cannabis retail business” as defined in section 40-2(4) of this
Code.
(2) “Commercial Cannabis Activity” as defined in section 40-2(9) of this Code.
(3) “Commercial cannabis business” as defined in section 40-2(10) of this
Code excluding medical marijuana collectives/cooperatives also referred
to as medicinal cannabis retail sales.
(4) “Commercial cannabis adult-use retail business” as defined in section 40-
2(39.4).
(5) “Consumption Lounge” as defined in section 40-2(39.1) of this Code.
(6) “Cultivation” as defined in section 40-2(11) of this Code.
(7) “Delivery” as defined in section 40-2(13) of this Code.
(8) “Distribution” as defined in section 40-2(16) of this Code.
(9) "Gross receipts" – section 21-3 of this Chapter notwithstanding, “gross
receipts” for the purposes of this Article shall mean:
(A) Transfer of title or possession, exchange or barter, conditional or
otherwise, in any manner or by any means whatsoever, of tangible
personal property for a consideration including any monetary
Ordinance No. NS-XXX
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consideration for cannabis, including, but not limited to, membership
dues, reimbursements provided by members, regardless of form, or
the total amount of cash or in-kind contributions, including all
operating costs related to the growth, cultivation, manufacturing,
distribution, testing, or provision of cannabis or any transaction
related thereto.
(B) Anything else of value obtained by an a cannabis business;
(C) The total amount of the sale price of all sales and services;
(D) The total amount charged or received for the performance of any act,
service or employment of whatever nature it may be, whether or not
such service, act or employment is done as a part of or in connection
with the sale of goods, wares, or merchandise (whether at wholesale
or retail), for which a charge is made or credit allowed, including all
refunds, cash credits and properties of any amount or nature;
(E) Any amount for which credit is allowed by the seller to the purchaser
without any deduction therefrom, on account of the cost of the
property sold, the cost of materials used, the labor or service cost,
interest paid or payable, losses, or any other expense whatsoever;
provided that cash discounts allowed or payment on sales shall not
be included;
(F) The amount of any federal manufacturer's or importer's excise tax
included in the price of property sold, even though the manufacturer
or importer is also the retailer thereof;
(G) The amount of any California state cannabis excise tax or state
cannabis cultivation tax included in the price of the product;
(H) “Gross receipts" shall not include the following:
i. The amount of any federal tax imposed on or with respect to retail
or wholesale sales or the sale of services whether imposed upon
the cannabis business or the consumer whenever the amount of
federal tax is authorized by law to be stated and passed through
to customers as a separate charge.
ii. Any California state, county, or city sales or use tax, including any
add-on, district, or transaction and use tax, required by law to be
included in or added to the purchase price and collected from the
consumer or purchaser, or such part of the sales price of any
property previously sold and returned by the purchaser to the
seller which is refunded by the seller by way of cash or credit
Ordinance No. NS-XXX
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allowances given or taken as part payment on any property so
accepted for resale; or
iii. The amount of the sale price of business personal property (all
property owned or leased by a cannabis business operator used
in the operation cannabis business activities, including but not
limited to: furniture, fixtures, and business equipment); real
property, including land, buildings and other improvements.
iv. The amount of equity contributions, investments, and/or loan
proceeds to cannabis business’ operation, and/or proceeds from
the sale or transfer of cannabis business’ retail or commercial
cannabis business.
v. The amount of interparty sales and/or transfers of goods within a
single vertically and/or horizontally integrated cannabis business,
where the sales or transfers goods are between two or more
commercial cannabis business licensees (excluding testing
facilities or testing laboratories), or one or more said commercial
cannabis business licensee(s) and one or more medicinal
cannabis retail business licensee(s), as set forth in accordance
with section 21-131.2 and/or section 21-142.
(I) ”Gross receipts" shall be calculated without any deduction on
account of any of the following:
i. The cost of tangible or intangible property sold or bartered;
ii. The cost of materials or products used, labor or service cost,
interest paid, losses, or other expense;
iii. The cost of transportation of cannabis, or other property or
product;
iv. The amount of any federal or state income or franchise
taxes; and
v. Any other business costs or expenses, unless otherwise
specifically exempted.
(10) “Gross square foot” or “gross square footage” for the purposes of this
Article shall mean:
(A) In the case of commercial cannabis businesses licensed by the state
to engage in an adult-use cannabis retail business, the gross number
of square feet comprising the adult-use cannabis retail property
location as confirmed by the corresponding “approved building set”
or “approved certificate of occupancy” on file with the City of Santa
Ordinance No. NS-XXX
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Ana Planning and Building Agency, whichever is the greater of any
square footage indicated, whether such adult-use cannabis retail
business is part of an on-site vertically or horizontally integrated
cannabis business or not.
(B) In the case of commercial cannabis businesses licensed by the state
to engage in cultivation, the aggregate number of square feet
comprising all areas of the premises under “canopy”, whether such
sum is greater or lesser than the gross square footage as stated in
the “approved building set” or “approved certificate of occupancy”,
and whether such commercial cannabis cultivation business is part
of an on-site vertically integrated cannabis business or not.
“Canopy” shall mean the designated area(s) of a premise that will
contain mature plants at any point in time. Canopy shall be calculated
in square feet and measured using clearly identifiable boundaries of
all area(s) that will contain mature plants at any point in time,
including all of the space(s) within the boundaries. Canopy may be
noncontiguous, but each unique area included in the total canopy
calculation shall be separated by an identifiable boundary which
includes interior walls, shelves, greenhouse walls, hoop house walls,
garden benches, hedgerows, fencing, garden beds, or garden plots;
and if mature plants are being cultivated using a shelving system, the
surface area of each level shall be included in the total canopy
calculation.
Canopy shall be subject to independent measurement and
calculation by duly authorized employees or agents of the City at the
time of application for a Santa Ana Business License and annually
thereafter at the time of the renewal of such license, or more often
as may be deemed necessary in the discretion of the collector.
Whenever an independent canopy measurement and calculation is
required under the terms of this Article or whenever the collector in
his or her discretion determines that the independent measurement
and calculation of a licensee’s canopy is desirable to effectuate the
proper assessment or collection of the business license taxes
required to be paid under the terms of this Chapter, or for any other
purposes related to the express aims of this Article then a canopy
measurement shall be performed and a corresponding service fee
shall be applicable in the amount as specified by resolution of the
City Council.
(C) In the case of commercial cannabis businesses licensed by the state
to engage in distribution or manufacturing and that are not occupying
Ordinance No. NS-XXX
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the same premises with another cannabis business, the gross
number of square feet as confirmed by the corresponding “approved
building set” or “approved certificate of occupancy” on file with the
City of Santa Ana Planning and Building Agency, whichever is the
greater of any square footage indicated.
(D) In the case of commercial cannabis businesses licensed by the state
to engage in distribution or manufacturing and occupying the same
premises with another cannabis business, the gross number of
square feet allocated by the commercial cannabis business
owner/operator respectively for either distribution use or for
manufacturing use, whether the combined sum of all uses is less
than, equal to, or greater than the gross square footage as stated in
the “approved building set” or “approved certificate of occupancy”.
The number of square feet allocated (“Allocated Square Footage”)
shall be subject to independent measurement and calculation by duly
authorized employees or agents of the City at the time of application
for a Santa Ana Business License and annually thereafter at the time
of the renewal of such license, or more often as may be deemed
necessary in the discretion of the collector. Whenever an
independent allocated square footage measurement and calculation
is required under the terms of this Article or whenever the collector
in his or her discretion determines that the independent
measurement and calculation of a licensee’s allocated square
footage is desirable to effectuate the proper assessment or collection
of the business license taxes required to be paid under the terms of
this Chapter, or for any other purposes related to the express aims
of this Article then an Allocated Square Footage measurement shall
be performed and a corresponding service fee shall be applicable in
the amount as specified by resolution of the City Council.
(E) In the case of commercial cannabis businesses licensed by the state
to engage in testing facilities or testing laboratory businesses, the
gross number of square feet comprising such commercial cannabis
business’ property location as confirmed by the corresponding
“approved building set” or “approved certificate of occupancy” on file
with the City of Santa Ana Planning and Building Agency, whichever
is the greater.
(11) “Manufacturing” as defined in section 40-2(22) of this Code.
(12) “Microbusiness” as defined in section 40-2(24) of this Code.
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(13) “Consumption Lounge” as defined in section 40-2(39.1) of this Code.
(14) “Qualified Social Equity Adult-use Cannabis Retail Business” as set out in
section 40-16 of this Code. To include: “Socially Equitable Adult-use
Cannabis Retail Business (including Delivery and Consumption
Lounges)”, and “Socially Equitable Adult-use Cannabis Retail Business
Temporary Consumption and/or Special Events)”.
(15) “Retail business” as defined in section 40-2(39) of this Code.
(16) “Shared manufacturing” as defined in section 40-2(22.5) of this Code.
(17) “Temporary Consumption Event” and “Temporary Consumption Festival”
as defined in section 40-2(39.2 and 39.3) of this Code.
(18) “Testing Facility” or “Testing Laboratory” as defined in section 40-2(43) of
this Code.
(19) “Wholesale" as defined in section 40-2(44) of this Code.
(k) Modification, repeal or amendment. The City Council may repeal the ordinance
codified in this Article, or amend it in a manner which does not result in an increase
in the tax or taxes imposed herein, without further voter approval. The City Council
may likewise by ordinance adopt and add additional provisions to any other Article
of this Chapter and relate them to this Article, or amend any existing provisions of
any Article of this Chapter as they may already relate to this Article in any manner
which does not result in an increase in the tax or taxes imposed herein, without
further voter approval. If the City Council repeals said ordinance or any provision of
this Article, it may subsequently reenact it without voter approval, as long as the
reenacted ordinance or section does not result in an increase in the tax or taxes
imposed herein.
(l) Administration—Rules, regulations and guidelines. In order to aid in the city's
collection of taxes due under this Article and to ensure that all commercial cannabis
businesses are taxed consistently to the best of the city's ability, the collector, with
the concurrence of the city attorney, may promulgate rules, regulations, and
guidelines, to implement and administer this Article including, but not limited to rules,
regulations, and guidelines harmonizing other provisions of this Chapter with the
provisions of this Article in any manner not inconsistent with the intent of this Article
and which does not result in an increase in the tax or taxes imposed herein. The
collector may also, with the concurrence of the city attorney, interpret or clarify the
methodology of the tax, or any definition applicable to the tax, so long as such
interpretation or clarification (even if contrary to some prior interpretation or
clarification) is not inconsistent with the language of this Article.
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(m) Occasional transactions—Exemptions.
(1) The provisions of this Article shall not apply to persons having no fixed
place of business within the city who come into the city for the purpose
of transacting a specific item of commercial cannabis business at the
request of a specific client or customer, incidental to a commercial
cannabis business principally established elsewhere, provided that such
person does not come into the city for the purpose of transacting such
business on more than three (3) days during any calendar year.
(2) For any person not having a fixed place of business within the city who
comes into the city for the purpose of transacting commercial cannabis
business activities, the business license tax(es) payable by such person
may be apportioned by the collector in accordance with this Chapter.
(n) Reporting and remittance.
(1) Beginning as set forth in subsection (r) below, and monthly thereafter,
each commercial cannabis business required to pay a tax or taxes based
on gross receipts under this Article (except qualified nonprofit
organizations exempt from taxes measured by income or gross receipts),
shall report to the city any gross receipts received during the preceding
monthly reporting period. In addition, each cannabis business (including
qualified nonprofit organizations) required to pay a tax or taxes based on
square footage shall report to the city the gross square footage of the
cannabis business’ property location. Every cannabis business shall then
compute the business license taxes at both the gross receipts rate and
the gross square footage rate - prorated monthly to one-twelfth (1/12th) of
the annual tax rate amount - and shall then remit to the city the amount of
the higher of the two tax calculations due and owing during said period in
accordance with section 21-133, subsection (d). In the case of a qualified
nonprofit organization only the gross square footage computation shall be
made and the amount of such calculation shall represent the amount due
and owing during said period. All reporting and remitting made shall be
done in accordance with instructions from the collector and shall be made
using forms provided or approved by the collector.
(2) For purposes of this section, month shall mean calendar month and shall
include any fraction of a month. Taxes shall begin to accrue on the date
that a person or entity first receives a business license or other city permit
to operate as a commercial cannabis business or upon the operative date
of this Article should a person or entity already possess a commercial
cannabis business license or other city permit to operate as a commercial
cannabis business.
Ordinance No. NS-XXX
Page 65 of 68
(3) The payment of the two thousand dollars ($2,000.00) minimum basic rate
gross receipts tax required annually for each separate branch location or
separate property location of the business in accordance with this section,
shall be made annually prior to the beginning of the fiscal year beginning
April first of the current year and expiring on the 31st day of March of the
following year. In the case of a new commercial cannabis business the
minimum basic rate gross receipts tax shall be paid in advance prior to
any new business activity being undertaken. Every new licensee shall pay
in advance an amount equal to one-quarter (¼) of the annual minimum
basic rate gross receipts tax, for each quarter and fraction of a quarter
remaining during the period for which the new license is issued.
(o) Delinquent date—Penalty. Any individual or entity who fails to pay the taxes required
by this Article when due shall be subject to penalties and interest as set forth in
accordance with this Chapter. The collector is not required to send a delinquency or
other notice or bill to any person subject to the provisions of this Article and failure
to send such notice or bill shall not affect the validity of any tax or penalty due under
the provisions of this Article.
(p) Business license tax certificate/receipt—Required. There are imposed upon all
persons engaged in transacting and carrying on any commercial cannabis business
activity in the city taxes in the amounts prescribed in this Article. It shall be unlawful
for any person, either for him or herself or for any other person, to commence,
transact or carry on any business in the city without first having procured a business
license from the city under this Chapter and having paid the taxes set forth in this
Article, and without complying with any and all applicable provisions contained in
this Chapter. The carrying on of any commercial cannabis business activity without
complying with all the provisions of this Article shall constitute a separate violation
of this Chapter for each and every day that such commercial cannabis activity is so
carried on.
(q) Classification of business license assessment type—Term and renewal. The
business license issued to commercial cannabis businesses shall be classed as a
gross receipts assessment type, issued for the same term of license as set forth in
subsection 21-71(c) of this Chapter and shall be subject to renewal in accordance
with sections 21-72(c), 21-73(c), and 21-77.
(r) Operative date. Upon the approval by the majority of the voters of the city at the
November 6, 2018 general election, the taxes imposed by this Article shall become
operative and shall be applied by the collector upon all commercial cannabis
businesses.
(s) Operative date of decreased gross receipts tax rate (Testing Facilities or Testing
Laboratories). The gross receipts tax set initially at a rate of five (5%) percent for
testing facilities or testing laboratories pursuant to subsection (d) above shall be
Ordinance No. NS-XXX
Page 66 of 68
decreased to a rate of one (1%) percent by resolution of the City Council [Santa Ana
City Council Resolution No, 2019-068] as hereinabove provided for in accordance
with subsection (c), which reduced rate, under the terms of said City Council
resolution, shall become retroactively effective July 1, 2019.
(t) Operative date of decreased gross receipts tax rate (Cultivation, Manufacturing, and
Distribution, Adult-use Cannabis Retail Business (including Delivery and
Consumption Lounges), Adult-use Cannabis Retail Business (Temporary
Consumption and/or Special Events). The gross receipts tax set initially at a rate of
six (6%) percent for cultivation, manufacturing, and distribution pursuant to
subsection (d) above shall be decreased to a rate of one (1%) percent, and the gross
receipts tax rate set initially at a rate of eight (8%) for all adult-use cannabis retail
business (including delivery) activities pursuant to subsection (d) above shall be
decreased to seven (7%) percent to include the sub-activity of consumption lounges,
and the ancillary adult-use cannabis retail business (temporary consumption and/or
special events) activity; the parallel activities of social equity adult-use cannabis
retail business (including delivery and consumption lounge), and the ancillary social
equity adult-use cannabis retail business (temporary consumption and/or special
events) activity are set at a reduced five (5%) percent, by resolution of the City
Council [Santa Ana City Council Resolution No, 2022-XXX] as hereinabove provided
for in accordance with subsection (c), which reduced rates, under the terms of said
City Council resolution, shall become effective January 1, 2023.
(u) Operative date of decreased square footage tax rate (Cultivation, Manufacturing,
Distribution, Adult-use Cannabis Retail Business (Temporary Consumption and/or
Special Events), Qualified Social Equity Adult-use Cannabis Retail Business
(Temporary Consumption and/or Special Events). The square footage tax set
initially at a rate of ten ($10) dollars per square foot for cultivation and manufacturing,
and four ($4) dollars per square foot for distribution pursuant to subsection (d) above
shall be decreased to a rate of seven ($7) dollars per square foot for cultivation,
three ($3) dollars per square foot for manufacturing, three ($3) dollars per square
foot for distribution; and to a rate of zero ($0) dollars per square foot for shared
manufacturing, adult-use cannabis retail business (temporary consumption and/or
special events), and qualified social equity adult-use cannabis retail business
(temporary consumption and/or special events) by resolution of the City Council
[Santa Ana City Council Resolution No, 2022-XXX] as hereinabove provided for in
accordance with subsection (c), which reduced rates, under the terms of said City
Council resolution, shall become effective January 1, 2023.
(v) Notwithstanding the tax rates imposed herein under subsections (d),(s),(t), and (u),
the City Council may, in its discretion, at any time solely by resolution, implement
any lower or higher tax rate it deems appropriate, not to exceed the maximum rates
established by subsection (a).
Ordinance No. NS-XXX
Page 67 of 68
Section 10. Section 21-135 of Article XIII of Chapter 21 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 21-135. - Single property location; multiple state licenses; separate city
business licenses.
Sections 21-7, 21-8, and 21-9 of this chapter notwithstanding, separate city business
licenses, issuable to commercial cannabis businesses pursuant to this article, shall be
required for each separate type of commercial cannabis business activity transacted and
carried on at a single city property location for which a commercial cannabis business
may seek licensure by the state, or for which a state license has been approved or issued.
Provided, however, that commercial cannabis business activity transacted and carried on
at a single city property location for which a commercial cannabis business may seek
licensure by the state as a microbusiness, or for which a state license has been approved
or issued as a microbusiness, shall in such case be required to obtain a separate city
business license business for each of the commercial cannabis activities transacted and
carried on.
Section 11. If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision of any
court of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this ordinance. The City Council of the City of Santa Ana hereby declares that
it would have adopted this ordinance and each section, subsection, sentence, clause,
phrase or portion thereof irrespective of the fact that any one or more sections,
subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
Section 12. This Ordinance shall become effective January 1, 2023.
Section 13. The Clerk of the Council shall certify the adoption of this ordinance
and shall cause the same to be published as required by law.
ADOPTED this _______ day of ___________, 2022.
________________________________
Vicente Sarmiento
Mayor
Ordinance No. NS-XXX
Page 68 of 68
APPROVED AS TO FORM
Sonia R. Carvalho, City Attorney
By: _________________________
John M. Funk
Chief Assistant City Attorney
AYES: Councilmembers: __________________________________
NOES: Councilmembers:__________________________________
ABSTAIN: Councilmembers: _________________________________
NOT PRESENT: Councilmembers: _________________________________
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, _____________, Clerk of the Council, do hereby attest to and certify that the
attached Ordinance No. NS-______ to be the original ordinance adopted by the
City Council of the City of Santa Ana on ________________, 2022 and that said
ordinance was published in accordance with the Charter of the City of Santa Ana.
Date: ______________________ ________________________________
Clerk of the Council
City of Santa Ana
Resolution No. 2022-XXX
Page 1 of 6
RESOLUTION NO. 2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA ADDING COMMERCIAL CANNABIS BUSINESS
ACTIVITY TAX RATE CATEGORIES FOR: ADULT-USE
CANNABIS RETAIL BUSINESS (INCLUDING DELIVERY,
BUT NOT INCLUDING CONSUMPTION LOUNGE AND
TEMPORARY CONSUMPTION AND/OR SPECIAL EVENTS);
ADULT-USE CANNABIS RETAIL BUSINESS (INCLUDING
DELIVERY AND CONSUMPTION LOUNGE); ADULT-USE
CANNABIS RETAIL BUSINESS (TEMPORARY
CONSUMPTION AND/OR SPECIAL EVENTS); QUALIFIED
SOCIAL EQUITY ADULT-USE CANNABIS RETAIL
BUSINESS (INCLUDING DELIVERY AND INCLUDING
CONSUMPTION LOUNGE); SOCIAL EQUITY ADULT-USE
CANNABIS RETAIL BUSINESS (TEMPORARY
CONSUMPTION AND/OR SPECIAL EVENTS); SHARED
MANUFACTURING; AND ESTABLISHING RELATED GROSS
RECEIPTS AND SQUARE FOOTAGE TAX RATES
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines and
declares as follows:
A. In November 2016, the California Marijuana Legalization Initiative, also known
as the Adult Use of Marijuana Act (AUMA or Proposition 64) was approved by the voters of
the State of California. The AUMA legalized specified personal use and cultivation of
marijuana for adults 21 years of age or older.
B. In 2017, the Governor signed into law Senate Bill 94 also known as Medicinal
and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) establishing state
regulations and licensing for retail sales, manufacturing, distribution, delivery and testing of
adult-use (also called recreational) marijuana.
C. On November 21, 2017, the City Council created Chapter 40 of the Santa
Ana Municipal Code, allowing adult-use commercial cannabis retail businesses in the city,
and amended certain sections of Chapters 18 and 21 of the Santa Ana Municipal Code
to ensure consistency with State law and Chapter 40. Since 2014, the City has allowed
medicinal marijuana collectives/cooperatives to operate within the City pursuant to
regulations set forth in Chapter 18 and Chapter 21 of the Santa Ana Municipal Code.
Resolution No. 2022-XXX
Page 2 of 6
D. In 2018, the City Council adopted Ordinance Nos. NS-2941 and NS-2942,
allowing and regulating commercial cannabis businesses.
E. A general business license tax based on the gross receipts derived from
commercial cannabis businesses and where applicable gross square footage serves to
generate essential funds for protecting vital City services and facilities and places such
businesses on more equal footing with existing City businesses, including medical
marijuana collective/cooperative (medicinal cannabis retail) businesses.
F. The City Council is authorized to impose general and special taxes in order
to fund municipal services and facilities, subject to requisite voter approval as set forth in
Government Code section 53720 et seq.
G. The voters of the City of Santa Ana approved Measure Y (Ordinance No.
NS-2962) on November 6, 2018, for the purpose of fixing the rate of taxation for
commercial cannabis businesses including delivery, distribution, manufacturing,
cultivation, testing and retail sales of cannabis and related products. The taxes required
to be paid under this article are declared to be required pursuant to the taxing power of
the City of Santa Ana solely for the purpose of obtaining revenue and are not regulatory
permit fees.
H. On September 3, 2019, the City Council adopted Ordinance No. NS-2972
amending certain sections of chapters 21 of the Santa Ana Municipal Code allowing
vertical and horizontal integration of cannabis businesses; updating ownership transfers
procedural standards and requirements, security deposits, and various administrative
processes; updating and streamlining regulatory components; reducing cannabis testing
taxes to greater amount of one (1%) percent of gross receipts or $1.50 per square foot;
and adopting a canopy measurement and square footage allocation service fee.
I. The City of Santa Ana desires to remain at the forefront of commercial
cannabis by allowing and regulating commercial cannabis business activities, routinely
updating and amending its ordinances, and establishing commercial cannabis gross
receipts tax rates and square footages tax rates that are competitive and provide for the
needs of the Santa Ana community.
J. The City of Santa Ana has a compelling interest in ensuring that cannabis
is not sold in an illicit manner, in protecting the public health, safety and welfare of its
residents and businesses, in preserving the peace and quiet of the neighborhoods in
which these businesses may operate, and in providing access to safe and tested
cannabis to residents. To ensure safe and tested cannabis, the City desires to see the
establishment and successful operation of cultivation, distribution, and manufacturing
(including shared manufacturing and microbusiness) facilities in the City.
K. Section 21-133(d) of Article XIII of Chapter 21 of the Santa Ana Municipal
Code establishes initial, current, and scheduled commercial cannabis gross receipts tax
Resolution No. 2022-XXX
Page 3 of 6
and square footage tax rates by reference to the authorizing ordinances and resolutions,
the content of which are presented in condensed tabular format as follows:
Commercial Cannabis Business
Activity
Gross Receipts Tax
Rate
Gross Square
Footage Tax Rate
Adult-use Cannabis Retail Business
(including Delivery) (effective
beginning December 21, 2018
through December 31, 2022)
8% $ 25.00
Adult-use Cannabis Retail Business
(including Delivery, but not including
Consumption Lounge and
Temporary Consumption and/or
Special Events)
(effective beginning January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business
(including Delivery and Consumption
Lounge)
(effective beginning January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business
(Temporary Consumption and/or
Special Events)
(effective beginning January 1, 2023)
7% $ 0.00
Qualified Social Equity Adult-use
Cannabis Retail Business (including
Delivery and Consumption Lounge)
(effective beginning January 1, 2023)
5% $ 25.00
Qualified Social Equity Adult-use
Cannabis Retail Business (Temporary
Consumption and/or Special Events)
(effective beginning January 1, 2023)
5% $ 0.00
Cultivation
(effective December 21, 2018
through December 31, 2022)
6% $ 10.00
Cultivation
(effective beginning January 1, 2023) 1% $ 7.00
Distribution
(effective December 21, 2018
through December 31, 2022)
6% $ 4.00
Resolution No. 2022-XXX
Page 4 of 6
Distribution
(effective beginning January 1, 2023) 1% $ 3.00
Manufacturing
(effective December 21, 2018
through December 31, 2022)
6% $ 10.00
Manufacturing
(effective beginning January 1, 2023) 1% $ 3.00
Shared Manufacturing
(effective beginning January 1, 2023) 1% $ 0.00
Testing Facility or Testing Laboratory
(effective December 21, 2018
through June 30, 2019)
5% $ 1.50
Testing Facility or Testing Laboratory
(effective July 1, 2019) 1% $ 1.50
L. Section 21-133(b)(2) of Article XIII of Chapter 21 of the Santa Ana Municipal
Code allows the City Council by resolution to implement any lower commercial cannabis
tax rate it deems appropriate.
Section 2. The City Council hereby establishes: (1) the adult-use cannabis retail
business (including delivery, but not including consumption lounge and temporary
consumption and/or special events) gross receipts tax rate at seven (7%) percent,
lowering it from eight (8%) percent; (2) the adult-use cannabis retail business (including
delivery and consumption lounge) and the adult-use cannabis retail business (temporary
consumption and/or special events) gross receipts tax rates at seven (7%) percent; and
(3) the qualified social equity adult-use cannabis retail business (including delivery and
consumption lounge) and the qualified social equity adult-use cannabis retail business
(temporary consumption and/or special events) gross receipts tax rates at five (5%)
percent. The reduced seven (7%) percent gross receipts tax rate for adult-use cannabis
retail business (including delivery, but not including consumption lounge and temporary
consumption and/or special events), and the (7%) percent gross receipts tax rates for
adult-use cannabis retail business (including delivery and consumption lounge) and adult-
use cannabis retail business (temporary consumption and/or special events), plus the five
(5%) percent qualified social equity adult-use cannabis retail business (including delivery
and consumption lounge) and qualified social equity adult-use cannabis retail business
(temporary consumption and/or special events) activities shall all become effective
January 1, 2023.
Section 3. The City Council hereby establishes: (1) the square footage tax rates
for adult-use cannabis retail business (including delivery, but not including consumption
lounge and temporary consumption and/or special events), plus adult-use cannabis retail
Resolution No. 2022-XXX
Page 5 of 6
business (including delivery and consumption lounge), together with qualified social equity
adult-use cannabis retail business (including delivery and consumption lounge) business
activities at twenty-five ($25) dollars per square foot; (2) the square footage tax rates for
adult-use cannabis retail business (temporary consumption and/or special events) and
qualified social equity adult-use cannabis retail business (temporary consumption and/or
special events) activities at zero ($0) dollars per square foot. The (1) twenty-five ($25)
dollars per square foot, square footage tax rates for adult-use cannabis retail business
(including delivery, but not including consumption lounge and temporary consumption
and/or special events), plus adult-use cannabis retail business (including delivery and
consumption lounge), together with qualified social equity adult-use cannabis retail business
(including delivery and consumption lounge) business activities; and (2) the zero ($0) dollars
per square foot, square footage tax rates for adult-use cannabis retail business (temporary
consumption and/or special events) and qualified social equity adult-use cannabis retail
business (temporary consumption and/or special events) activities shall all become effective
January 1, 2023.
Section 4. The City Council hereby establishes: (1) the commercial cannabis
cultivation gross receipts tax rate; (2) the manufacturing (including shared manufacturing)
gross receipts tax rate; and (3) the distribution gross receipts tax rate at one (1%) percent.
The reduced one (1%) percent gross receipts tax rate for cultivation activities,
manufacturing (including shared manufacturing) activities, and distribution activities shall
become effective January 1, 2023.
Section 5. The City Council hereby establishes: (1) the commercial cannabis
square footage tax rate for cultivation activities at seven ($7) dollars per square foot and
for manufacturing activities at three ($3) dollars per square foot (lowering both from ten
($10) dollars per square foot); (2) the commercial cannabis square footage tax for
distribution activities at three ($3) per square foot (lowering it from four ($4) per square
foot); and (3) the shared manufacturing square footage tax at zero ($0) per square foot.
The reduced seven ($7) per square foot tax rate for cultivation activities, the reduced
three ($3) per square foot tax rate for manufacturing activities, the reduced three ($3) per
square foot tax rate for distribution activities, and the zero ($0) per square foot tax rate
for shared manufacturing shall all become effective January 1, 2023.
Section 6. This Resolution, upon its adoption by the City Council, shall take effect
January 1, 2023, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this ____ day of ___________________, 2022.
Vicente Sarmiento
Mayor
Resolution No. 2022-XXX
Page 6 of 6
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
John M. Funk
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers _
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, ________, Clerk of the Council, do hereby certify the attached Resolution No. 2022-XXX
to be the original resolution adopted by the City Council of the City of Santa Ana on
_____________________, 2022.
Date:
Clerk of the Council
City of Santa Ana
Resolution No. 2022-XXX
Page 1 of 3
RESOLUTION NO. 2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA REDUCING THE TAX ON MEDICINAL RETAIL
MARIJUANA BY ONE PERCENT, FROM SIX (6%) PERCENT
TO FIVE (5%) PERCENT
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines and
declares as follows:
A. On November 4, 2014, Santa Ana voters approved Santa Ana's Medical Marijuana
Regulatory Program ordinance ("Measure BB") allowing up to twenty (20) medical marijuana
retail cannabis collectives/cooperatives ("dispensaries").
B. Following the adoption of Measure BB, the provisions of the measure were
codified in Chapters 18 and 21 of the Santa Ana Municipal Code. The City also established
an implementation plan, enforcement program, administrative policies, and best practices.
C. In May 2016 and early 2017, following initial implementation of the ordinance, the
City held roundtable discussions that invited stakeholders, dispensary owners, and
members of the medical marijuana industry to meet with City staff regarding the
implementation of Measure BB. Participants of the roundtable discussions voiced opinions
on various aspects of the regulatory and tax programs and provided their recommendations
for future policy level consideration.
D. On June 20, 2017, the City Council approved amendments to Chapter 18 to
streamline Measure BB and create more business-friendly conditions for the existing
collectives/cooperatives.
E. On November 17, 2017, the City Council approved an ordinance amending
Chapter 21, Article XII (Marijuana Collectives/Cooperatives) and increasing the tax on
medicinal retail marijuana dispensaries. Measure BB established an initial business license
tax rate of up to five (5%) percent of the medicinal retail marijuana gross receipts generated
from each dispensary, but authorized a maximum business license tax rate of up to ten
(10%) percent. The November 17, 2017, ordinance (NS-2930) increased the tax from the
initial Measure BB voter approved rate of five percent (5%) to six percent (6%) as permitted
by Measure BB.
F. Section 21-127 (b) of Article XII of Chapter 21 of the Santa Ana Municipal Code
allows the City Council by resolution to implement any lower or higher tax rate it deems
Resolution No. 2022-XXX
Page 2 of 3
appropriate not greater than the business license tax rate of up to ten (10%) percent
authorized by Measure BB.
Section 2. The City Council hereby establishes the marijuana
collectives/cooperatives gross receipts tax rate at five (5) percent, lowering it from six (6)
percent. The five (5%) percent gross receipts tax rate shall become effective January 1,
2023.
Section 3. This Resolution, upon its adoption by the City Council, shall take effect
January 1, 2023, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this ____ day of ___________________, 2022.
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
John M. Funk
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers _
Resolution No. 2022-XXX
Page 3 of 3
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, __________________, Clerk of the Council, do hereby certify the attached Resolution No.
2022 - _____ to be the original resolution adopted by the City Council of the City of Santa
Ana on _____________________, 2022.
Date:
Clerk of the Council
City of Santa Ana
Resolution No. 2022-XXX
Page 1 of 5
RESOLUTION NO. 2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA ESTABLISHING: (1) A MAP OF COMMERCIAL
CANNABIS ELIGIBLE AREAS IN WHICH COMMERCIAL
CANNABIS BUSINESSES AS DEFINED AND REGULATED
BY CHAPTERS 21 AND 40 OF THE SANTA ANA MUNICIPAL
CODE MAY OPERATE; (2) THE NUMBER OF ANNUALLY
PERMISSIBLE TEMPORARY CONSUMPTION EVENTS;
AND (3) THE COMMUNITY BENEFIT, SUSTAINABLE
BUSINESS PRACTICES, AND SOCIAL EQUITY PLAN
TEMPLATE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines, and
declares as follows:
A. On December 9, 2014, following voter approval, the City Council adopted
Ordinance No. NS-2864 to regulate the establishment, operation, and taxation of medical
marijuana collectives and cooperatives in the City. The ordinance was originally known as
and subsequently became referred to as “Measure BB.”
B. In November 2016, the California Marijuana Legalization Initiative, also known
as the Adult Use of Marijuana Act (AUMA or Proposition 64) was approved by the voters of
the State of California. The AUMA legalized specified personal use and cultivation of
marijuana for adults 21 years of age or older.
C. In 2017, the Governor signed into law Senate Bill 94, also known as Medicinal
and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), establishing state
regulations and licensing for retail sales, manufacturing, distribution, delivery and testing of
adult-use (also called recreational) marijuana.
D. On November 21, 2017, the City Council adopted Ordinance No. NS-2929,
creating Chapter 40 of the Santa Ana Municipal Code and allowing adult-use commercial
cannabis retail businesses in the city, and amended certain sections of Chapters 18 and
21 of the Santa Ana Municipal Code to ensure consistency with State law and Chapter
40. Since 2014, the City has allowed medicinal marijuana collectives/cooperatives to
operate within the City pursuant to regulations set forth in Chapter 18 and Chapter 21 of
the Santa Ana Municipal Code.
E. Since its inception, Chapter 40 has required all commercial cannabis
business operators to engage in providing community benefits and sustainable business
Resolution No. 2022-XXX
Page 2 of 5
practices through execution of an operating agreement and accompanying Community
Benefit and Sustainable Business Practices plan, with the intent of ensuring commercial
cannabis businesses remain engaged in providing direct benefits to the Santa Ana
community.
F. In 2018, the City Council adopted Ordinance Nos. NS-2941 and NS-2942,
allowing and regulating commercial cannabis testing laboratories, and Ordinance No. NS-
2944, allowing commercial cannabis cultivation, manufacturing, and distribution activities.
G. The City of Santa Ana desires to remain at the forefront of commercial
cannabis by allowing and regulating commercial cannabis business activities, routinely
updating and amending its ordinances, and establishing commercial cannabis gross
receipts tax rates that are competitive and provide for the needs of the Santa Ana
community.
H. Measure BB and subsequent ordinances specified that commercial
cannabis business activity is permitted in the City’s light and heavy industrial zoning
districts (M1 and M2) and must be located 1,000 feet from schools, parks, and properties
zoned for residential uses. Proposition 64 subsequently set a minimum separation of 600
feet but allowed local jurisdictions to adopt lower or higher separation requirements.
I. The City Council recognizes those entities that have remained on the
Medicinal Cannabis Waitlist pursuant to Santa Ana Municipal Code Section 40-104, and
those entities that were scored as part of the merit-based selection process in Section 40-
9.
J. Following redevelopment of industrial properties east of the Costa Mesa
(SR-55) Freeway, the City Council adopted a map of commercial cannabis eligible areas
on March 20, 2018 in which commercial cannabis business activities could locate subject
to full compliance with applicable local, County, and State regulations.
K. Since the last adoption of the map, the increasing demand for industrial
properties in Santa Ana following the COVID-19 pandemic has reduced the availability of
commercial cannabis eligible properties in the industrial zoning districts, creating strain
on cannabis business applicants, other business types, tenants, and property owners. In
order to offer clarity and expansion opportunities to commercial cannabis business
owners, the City desires to update the map to specify the exact parcels on which
commercial cannabis business activities are permitted. The map is based on the original
1,000-foot buffer from sensitive land uses, including schools, parks, and residential
zoning districts.
L. The City of Santa Ana desires to maintain commercial cannabis businesses
in locations adequately buffered from sensitive land uses such as schools, parks, and
properties zoned for residential uses, while maintaining a sufficient amount of properties
eligible to apply for and operate a commercial cannabis business.
Resolution No. 2022-XXX
Page 3 of 5
M. The City of Santa Ana has a compelling interest in ensuring that cannabis
is not sold in an illicit manner, in protecting the public health, safety and welfare of its
residents and businesses, in preserving the peace and quiet of the neighborhoods in
which these businesses may operate, and in providing access to safe, locally produced
and retailed, and tested cannabis to residents and visitors.
N. The rise in commercial cannabis business activity in California, coupled with
an increase in consumer base both Citywide and regionally, requires the City to adopt a
proactive approach to allowing and regulating commercial cannabis business activity,
including ensuring that consumers of commercial cannabis retail products are educated
in responsible consumption and have safely designed and monitored settings in which
retail cannabis may be purchased and consumed.
O. The City Council has held a duly noticed public hearing on September 20,
2022 in connection with consideration and adoption of this resolution, during which
comments were provided by the City Council and members of the public on additional retail
storefronts, reduction of retail tax rates, community benefits and social equity, the map of
commercial cannabis eligible areas, and priority processing for commercial cannabis
consumption lounges that opt in to social equity measures.
Section 2. Pursuant to the California Environmental Quality Act (“CEQA”) and the
State CEQA Guidelines, the adoption of the accompanying ordinance and accompanying
resolutions is exempt from further CEQA analysis pursuant to CEQA Guidelines Section
15061(b)(3), as the proposed amendments address business activities already permitted in
the City and will not result in any significant physical effect on the environment. Because
Santa Ana is a built-out, urbanized community, and the uses permitted and regulated by the
cannabis ordinance are already allowed by the underlying zoning designations and the
development standards in Chapter 41 (Zoning) of the Santa Ana Municipal Code, the
updates to the ordinance will not lead to any cumulative or unforeseen impacts. A Notice of
Exemption, Environmental Review (ER) No. 2022-15, was filed for these actions within five
days of first reading, which took place on September 20, 2022.
Section 3. The City Council hereby establishes the map of commercial
cannabis eligible areas, included here as Attachment A, and referenced in Santa Ana
Municipal Code Sections 40-2, 40-5, and 40-6. This map reflects the original 1,000-foot
distance from properties containing schools, parks, and properties zoned for residential
uses, and includes eligible properties in the Light Industrial (M1), Heavy Industrial (M2),
and select Specific Development and Professional zoning districts of an industrial nature,
but is now parcel-specific to offer clarity to property and business owners.
Section 4. The City Council hereby establishes the maximum number of
temporary consumption events, as defined by Santa Ana Municipal Code Section 40-2
(39.2) and regulated by Santa Ana Municipal Code Section 40-8 (11), as two (2) per
commercial cannabis retail business per calendar year.
Resolution No. 2022-XXX
Page 4 of 5
Section 5. The City Council hereby adopts the Community Benefit, Sustainable
Business Practices, and Social Equity Plan template, attached hereto as Attachment B.
Section 6. This Resolution shall take effect upon the effectiveness of Ordinance
No. NS-____ on January 1, 2023.
ADOPTED this ____ day of ___________________, 2022.
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:
John Funk
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
Resolution No. 2022-XXX
Page 5 of 5
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, _____________________, Clerk of the Council, do hereby certify the attached
Resolution No. 2022 - _____ to be the original resolution adopted by the City Council of
the City of Santa Ana on _____________________, 2022.
Date:
Clerk of the Council
City of Santa Ana
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Note: final verification of eligible applications will be based on information provided via written communication for renewals or for new registration applications.
I
Map Creation Date: 9/13/2022City of Santa Ana - GIS Section 1000 ft Buffer
Commercial Cannabis Business(Medicinal & Adult-Use)Zoning Index Map
0 ½1
Miles
Legend
Schools
Parks
1000 ft Buffer from Schools, Parks, and Residential
Eligible Parcels
M1 - Light Industrial
M2 - Heavy Industrial
P - Professional
Specific Developments (SD8, SD69, SD74, SD85)
Note: If the buffer touches or crosses through a portion of an existing
building, the entire building remains eligible.
Attachment A
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ThorpeFundamental
SegerstromHigh
ValleyHigh
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GreenvilleFundamentalElementary
CentennialRegionalPark
Legend
Schools
Parks
1000 ft Buffer from Schools, Parks, and Residential
Eligible Parcels
M1 - Light Industrial
M2 - Heavy Industrial
P - Professional
Specific Developments (SD8, SD69, SD74, SD85)
Note: final verification of eligible applications will be based on information provided via written communication for renewals or for new registration applications.
Commercial Cannabis Retail(Medicinal & Adult-Use)
Zoning Availability Map 1 of 3
Note: No Adult-Use cannabis retail business shall be located within 500 feet
of another retail cannabis business, except for permitted co-location.
1000 ft Buffer
I0500 1,000
Feet
Map Creation Date: 9/13/2022City of Santa Ana - GIS Section
Note: If the buffer touches or crosses through a portion of an existing
building, the entire building remains eligible.
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Note: final verification of eligible applications will be based on information provided via written communication for renewals or for new registration applications.
Commercial Cannabis Retail(Medicinal & Adult-Use)
Site Availability Map 2 of 3
Note: No Adult-Use cannabis retail business shall be located within 500 feet
of another retail cannabis business, except for permitted co-location.
1000 ft Buffer
Legend
Schools
Parks
1000 ft Buffer from Schools, Parks, and ResidentialEligible Parcels
M1 - Light Industrial
M2 - Heavy Industrial
P - Professional
Specific Developments (SD8, SD69, SD74, SD85)
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Map Creation Date: 9/13/2022City of Santa Ana - GIS Section
Note: If the buffer touches or crosses through a portion of an existing
building, the entire building remains eligible.
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Note: final verification of eligible applications will be based on information provided via written communication for renewals or for new registration applications.
Commercial Cannabis Retail(Medicinal & Adult-Use)
Zoning Availability Map 3 of 3
Note: No Adult-Use cannabis retail business shall be located within 500 feet
of another retail cannabis business, except for permitted co-location.
1000 ft Buffer
I0500 1,000
Feet
Map Creation Date: 9/13/2022City of Santa Ana - GIS SectionLegend
Schools
Parks
1000 ft Buffer from Schools, Parks, and Residential
Eligible Parcels
M1 - Light Industrial
M2 - Heavy Industrial
P - Professional
Specific Developments (SD8, SD69, SD74, SD85)
Note: If the buffer touches or crosses through a portion of an existing
building, the entire building remains eligible.
This Plan is a public record.
Note: This is not a Regulatory Safety Permit (RSP) to legally operate a Commercial Cannabis Business. DO NOT
OPERATE unless a valid RSP is issued.
Page 1 of 5
Commercial Cannabis Business
Community Benefit, Sustainable Business
Practices, and Social Equity Plan
Planning and Building Agency
Planning Division
20 Civic Center Plaza
P.O. Box 1988 (M-20)
Santa Ana, CA 92702
(714) 647-5804
www.santa-ana.org
Section 1: Business Information
Table 1
Item Information
Business Information
Business Legal Name
Business Doing Business As (DBA)
Business Address in Santa Ana
Regulatory Safety Permit (RSP) No.
RSP Issuance Date
RSP Expiration Date
Business Owner Name
Contact Information
Primary Contact Person Name
Primary Contact Person Phone
Primary Contact Person Email
Section 2: Community Benefit, Sustainable Business Practices, and Social
Equity Plan
Pursuant to Santa Ana Municipal Code (SAMC) Section 40-1(C), all commercial cannabis
businesses operating in Santa Ana are required to maintain a Community Benefit,
Sustainable Business Practices, and Social Equity Plan (“Plan”) on file with the City in a
format acceptable to the Executive Director of the Planning and Building Agency. Failure
to maintain a plan and satisfy the obligations specified therein will result in review and
possible suspension, revocation, citation, or other enforcement action. For more
information on the City’s requirements for Community Benefit, Sustainable Business
Practices, and Social Equity, please review SAMC Section 40-1(C).
Beginning January 1, 2023, all commercial cannabis businesses are required to commit
to spending one-half of one percent (0.50%) of gross reported earnings for the previous
reporting year towards community benefit, sustainable business practices, and social
equity obligations. Beginning January 1, 2024, all commercial cannabis businesses are
required to commit to spending one percent (1.00%) of gross reported earnings for the
previous reporting year towards community benefit, sustainable business practices, and
social equity obligations.
Attachment B
This Plan is a public record.
Note: This is not a Regulatory Safety Permit (RSP) to legally operate a Commercial Cannabis Business. DO NOT
OPERATE unless a valid RSP is issued.
Page 2 of 5
Commercial Cannabis Business
Community Benefit, Sustainable Business
Practices, and Social Equity Plan
Planning and Building Agency
Planning Division
20 Civic Center Plaza
P.O. Box 1988 (M-20)
Santa Ana, CA 92702
(714) 647-5804
www.santa-ana.org
Required annual spending must be equitably distributed among the three Section
categories described in Table 2 and is subject to review and approval by the City. A Plan
that does not indicate satisfactory and equitably-distributed commitments will be rejected
and corrections issued to the business owner. Approval and renewal of a Regulatory
Safety Permit is contingent upon Plan approval.
Please utilize the following sections to detail the business’s commitments to community
benefits, sustainable business practices, and social equity measures. If additional space
is required, please attach supplemental sheets to this form using the same format as
Table 2 of this packet.
Table 2
Item Frequency or
Timeframe
Equivalent
Monetary Value
Detailed Description of
Measure or Activity
Section 1: Community Benefits*
CB-1. Local hiring
(Required)1
CB-2. Local sourcing
(Required)2
CB-3. Contributions
to local charitable or
not-for-profit
organizations
(Required)3
1 Describe measures to hire managers, staff, volunteers from within the City of Santa Ana. Details shall be provided on
local job posting methods, and annual data shall be provided indicating the means utilized to advertise jobs and on the
amount of managers, staff, and volunteers residing in Santa Ana. Beginning January 1, 2023, the cannabis retail
business owner must demonstrate that twenty percent (20%) of its employees reside within the City of Santa Ana, then
beginning January 1, 2024, the cannabis retail business owner must demonstrate that forty percent (40%) of its
employees reside within the City of Santa Ana
2 Describe measures to obtain construction materials and inventory from within the City of Santa Ana. Details shall be
provided on local posting methods, and annual data shall be provided indicating the means utilized to source locally
from businesses in Santa Ana.
3 Describe measures to engage with local charitable or not-for-profit organizations located within Santa Ana or carrying
out operations in Santa Ana. Measures may include volunteering, financial contributions, or material contributions.
Describe the frequency and value of all such contributions.
This Plan is a public record.
Note: This is not a Regulatory Safety Permit (RSP) to legally operate a Commercial Cannabis Business. DO NOT
OPERATE unless a valid RSP is issued.
Page 3 of 5
Commercial Cannabis Business
Community Benefit, Sustainable Business
Practices, and Social Equity Plan
Planning and Building Agency
Planning Division
20 Civic Center Plaza
P.O. Box 1988 (M-20)
Santa Ana, CA 92702
(714) 647-5804
www.santa-ana.org
Item Frequency or
Timeframe
Equivalent
Monetary Value
Detailed Description of
Measure or Activity
Section 2: Social Equity Measures (Beginning January 1, 2025)**
SE-1. Employment
compensation for full-
time employees
above minimum
wage (Required)4
SE-2. Measures to
hire part- and full-
time staff from
disadvantaged
communities
(Required)5
SE-3. Expenditures
on safety-related
equipment, training,
and services
(Required)6
4 Employment compensation for the full-time employees of the qualified taxpayer. For purposes of this Plan,
“employment compensation” means wages paid to full-time employees who are paid no less than 115 percent
(beginning January 1, 2024) and no less than 120 percent (beginning January 1, 2026) of the applicable minimum
wage. The calculation of wages may include the monetary value to the full-time employee of employer-provided group
health insurance benefits, childcare benefits, employer contributions to employer-provided retirement benefits, or
employer contributions to pension benefits.
5 Includes measures that the business will take to recruit, hire, and retain employees who reside in low-income census
tracts in Santa Ana where at least fifty-one percent (51%) of the current residents have a household income at or below
eighty percent (80%) of the Orange County Area Median Income (AMI), or from Environmental Justice communities as
specified by the General Plan.
6 For purposes of this Plan, “safety-related equipment, training, and services” means equipment primarily used by
employees of cannabis licensees to ensure their personal and occupational safety or the safety of customers of the
cannabis licensees; training for non-management employees on workplace hazards, including, but not limited to,
training required pursuant to subparagraph (A) of paragraph (11) of subdivision (a) of Section 26051.5 of the California
Business and Professions Code as amended from time to time; and services, including, but not limited to, safety audits,
security guards, security cameras, and fire risk mitigation.
This Plan is a public record.
Note: This is not a Regulatory Safety Permit (RSP) to legally operate a Commercial Cannabis Business. DO NOT
OPERATE unless a valid RSP is issued.
Page 4 of 5
Commercial Cannabis Business
Community Benefit, Sustainable Business
Practices, and Social Equity Plan
Planning and Building Agency
Planning Division
20 Civic Center Plaza
P.O. Box 1988 (M-20)
Santa Ana, CA 92702
(714) 647-5804
www.santa-ana.org
Item Frequency or
Timeframe
Equivalent
Monetary Value
Detailed Description of
Measure or Activity
SE-4. Workforce
development and
safety training for
employees
(Required)7
Section 3: Sustainable Business Practices***
SP-1. Energy Saving
(Required)
SP-2. Water Saving
(Required)
*Additional measures are permissible, such as direct engagement with local charitable or not-for-profit
organizations, volunteer activities, etc.
**Social equity measures are intended to result in improvements to disadvantaged communities, aiding
those systemically and negatively affected by prior criminal or misdemeanor drug convictions, and
creating new opportunities among owners, managers, employees, and other staff employed by the
cannabis industry.
***Minimum “green” technologies such as energy and water saving measures are required. However,
other measures are permissible, such as transit and carpool incentives, healthy living practices, etc.
7 Workforce development and safety training for employees of the qualified taxpayer. For purposes of this Plan,
“workforce development” includes, but is not limited to, joint labor management training programs, membership in a
joint apprenticeship training committee registered by the Division of Apprenticeship Standards, and a state-recognized
high road training partnership as defined in Section 14005 of the California Unemployment Insurance Code as amended
from time to time.
This Plan is a public record.
Note: This is not a Regulatory Safety Permit (RSP) to legally operate a Commercial Cannabis Business. DO NOT
OPERATE unless a valid RSP is issued.
Page 5 of 5
Commercial Cannabis Business
Community Benefit, Sustainable Business
Practices, and Social Equity Plan
Planning and Building Agency
Planning Division
20 Civic Center Plaza
P.O. Box 1988 (M-20)
Santa Ana, CA 92702
(714) 647-5804
www.santa-ana.org
Section 3: Acknowledgement
I, ____________________, primary contact for ____________________, business
owner for the commercial cannabis business named ____________________, located at
________________________________________________________ in Santa Ana,
California, hereby acknowledge that the information presented on this Community
Benefit, Sustainable Business Practices, and Social Equity Plan is accurate and
enforceable by the City of Santa Ana pursuant to Chapter 40 of the Santa Ana Municipal
Code as a condition of Regulatory Safety Permit issuance, renewal, and maintenance of
the Regulatory Safety Permit in good standing. I also understand that documentation of
gross reported annual earnings from the prior reporting year and satisfaction of these
commitments is required as part of the annual Regulatory Safety Permit renewal process.
____________________ ____________________
Primary Contact Date
Signature
____________________ ____________________
Business Owner Date
Signature
Approved:
____________________ ____________________ ____________________
Executive Director Executive Director Date
Name Signature
Exhibit 6
Recommended Commercial Cannabis Tax Rate Adjustments Table
Commercial Cannabis Business Activity Gross Receipts
Tax Rate
Gross Square Footage
Tax Rate
Adult-use Cannabis Retail Business (including Delivery) (effective
beginning December 21, 2018 through December 31, 2022) 8% $ 25.00
Adult-use Cannabis Retail Business (including Delivery, but not
including Consumption Lounge and Temporary Consumption
and/or Special Events) (effective beginning January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business (including Delivery and
Consumption Lounge)
(effective beginning January 1, 2023)
7% $ 25.00
Adult-use Cannabis Retail Business (Temporary Consumption
and/or Special Events)
(effective beginning January 1, 2023)
7% $ 0.00
Qualified Social Equity Adult-use Cannabis Retail Business
(including Delivery and Consumption Lounge)
(effective beginning January 1, 2023)
5% $ 25.00
Qualified Social Equity Adult-use Cannabis Retail Business
(Temporary Consumption and/or Special Events)
(effective beginning January 1, 2023)
5% $ 0.00
Cultivation
(effective December 21, 2018 through December 31, 2022) 6% $ 10.00
Cultivation
(effective beginning January 1, 2023) 1% $ 7.00
Distribution
(effective December 21, 2018 through December 31, 2022) 6% $ 4.00
Distribution
(effective beginning January 1, 2023) 1% $ 3.00
Manufacturing
(effective December 21, 2018 through December 31, 2022) 6% $ 10.00
Exhibit 6
Note:
• Shared manufacturers work in a shared-use facility operated by a commercial cannabis manufacturer. Shared
manufacturers can:
o Extract cannabis using butter or cooking oils
o Make cannabis products through infusion
o Package and label cannabis
• Microbusiness are a single commercial cannabis businesses license type allowing for at least three of the following
activities at one location:
1. Cultivation – up to 10,000 total square feet
2. Manufacturing – use of non-volatile solvents, mechanical extraction, or infusion
3. Distribution or distribution transport-only
4. Adult Use Retail – storefront or non-storefront. ‡
‡ - Santa Ana restricts retail to storefront retail, and only for pre-existing adult use retailers seeking to expand into a
microbusiness.
Manufacturing
(effective beginning January 1, 2023) 1% $ 3.00
Shared Manufacturing
(effective beginning January 1, 2023) 1% $ 0.00
Microbusinesses
(Tax rates apply proportionally to microbusiness’ activities
corresponding to Adult-use Retail [Adult-use Retail (including
Delivery)] / Cultivation / Manufacturing / Distribution)
(effective October 4, 2019 through December 31, 2022)
Adult-use Retail
8%
Cultivation,
Distribution &
Manufacturing
6%
Adult-use Retail
$ 25.00
Cultivation &
Manufacturing
$ 10.00
Distribution
$ 4.00
Microbusinesses†
(Tax rates apply proportionally to microbusiness’ activities
corresponding to Adult-use Retail [Adult-use Retail (including
Delivery, but not including Consumption Lounge and Temporary
Consumption and/or Special Events)] / Cultivation / Manufacturing /
Distribution)
(effective beginning January 1, 2023)
† Note: $2,000 Basic Tax Rate assessment to be reduced for
microbusinesses to a single levy on a microbusiness’ dominant
gross receipts activity.
Adult-use Retail
7%
Cultivation,
Distribution &
Manufacturing
1%
Adult-use Retail
$ 25.00
Cultivation
$ 7.00
Distribution &
Manufacturing
$ 3.00
Testing Facility or Testing Laboratory
(effective December 21, 2018 through June 30, 2019) 5% $ 1.50
Testing Facility or Testing Laboratory
(effective July 1, 2019) 1% $ 1.50