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As used in this Article 16, the following words or phrases shall mean:
“A-license” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“A-licensee” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Adult Use Cannabis” means Cannabis or Cannabis Products intended for adults 21 years of age and over.
“Applicant” means an Owner applying for a Cannabis Business Permit under this Article 16.
"Bona Fide Labor Organization" means any organization or any agency or employee repre-sentation committee or any local unit thereof in which employees participate, and exists for the purpose, in whole or in part, of dealing with em-ployers 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.
“Bona Fide Order” means an order for the delivery of Cannabis or Cannabis Products to a Customer that includes this information supplied by the Customer: (a) the Customer’s name and date of birth; (b) the date Delivery is requested and the address of the real property where the Customer would like the items Delivered; (c) an itemization of the Cannabis items proposed for Delivery and the amount, quantity, and/or volume of each such item; and (d) a statement that the Cannabis or Cannabis Product is not for the purpose of resale.
“Bona Fide Proof of Identity and Age” means: (a) a valid document issued by a federal, state, or local government, or subdivision or agency thereof, including, but not limited to, a valid motor vehicle operator’s license, that contains the name, date of birth, description of physical characteristics, and photo of the person; (b) a valid passport issued by the United States or by a foreign government; or (c) a valid identification card issued to a member of the United States Armed Forces that includes a date of birth and a photo of the person.
“Business Work Hours” means the total hours worked for a Cannabis Business by all workers, whether those workers are employed by the Cannabis Business or any subcontractor.
“Cannabis” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Cannabis Business” means any of the following: Cannabis Cultivation Facility, Cannabis Manufacturing Facility, Cannabis Testing Facility, Cannabis Distributor, Cannabis Microbusiness, Medicinal Cannabis Retailer, Cannabis Retailer, or Delivery-Only Cannabis Retailer.
“Cannabis Business Permit” means a permit to operate a specific type of Cannabis Business issued under this Article 16.
“Cannabis Business Registration Period” means the period of time during which Persons wishing to apply for Cannabis Business Permits may register with the Office of Cannabis, as set forth in Section 1605 of this Article 16.
“Cannabis Cultivation Facility” means a fixed place of business where Cannabis is Cultivated for Commercial purposes.
“Cannabis Distributor” means a fixed place of business where Cannabis and/or Cannabis Products are Distributed for Commercial purposes between Cannabis Businesses holding State Cannabis Licenses.
“Cannabis Manufacturing Facility” means a fixed place of business where Cannabis Products are Manufactured for Commercial purposes.
“Cannabis Microbusiness” means a fixed place of business where Cannabis and/or Cannabis Products are Cultivated, Manufactured, Distributed, and Sold to Customers.
“Cannabis Nursery” has the meaning set forth for the term “Nursery” in California Code of Regulations, Title 3, Division 8, Chapter 1, Sections 8000(w) and 8201(e), as amended from time to time.
“Cannabis Products” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Cannabis Retailer” means a fixed place of business where Cannabis and/or Cannabis Products are Sold to Customers.
“Cannabis Testing Facility” means a fixed place of business where Cannabis and/or Cannabis Products are tested for Commercial purposes.
“Canopy” means the designated area(s) at a permitted Premises that will contain Mature Plants.
“City” means the City and County of San Francisco.
“Commercial” means undertaken for Compensation.
“Commercial Cannabis Activity” includes the cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of Cannabis or Cannabis Products for Compensation, as provided for in this Article 16.
“Commercial Vehicle” has the meaning set forth in Section 260 of the California Vehicle Code, as may be amended from time to time.
“Compensation” means money or anything of value made as a payment, loan, advance, donation, contribution, deposit, forgiveness of debt, or gift.
“Consuming” or “Consumption” means Smoking, eating, drinking, chewing, applying topically, or otherwise ingesting.
“Cultivation” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Customer” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Delivery” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Delivery-Only Cannabis Retailer” means a fixed place of business from which Cannabis and/or Cannabis Products are Delivered and Sold to Customers.
“Director” means the Director of the Office of Cannabis, or his or her designee.
“Distribution” or “Distribute” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Hazardous material” has the meaning set forth in Section 1102 of the Health Code, as may be amended from time to time.
“Hazardous materials plan” has the meaning set forth in Section 1102 of the Health Code, as may be amended from time to time.
“Labor Peace Agreement” means an agreement between an Applicant and any Bona Fide Labor Organization that, at a minimum, prohibits such Bona Fide Labor Organization and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicants’ business. As part of this Agreement, an Applicant also agrees not to disrupt efforts by such Bona Fide Labor Organization to communicate with, and attempt to organize and represent, the Applicant’s employees. The agreement shall provide such Bona Fide Labor Organization access at reasonable times to areas in which the Applicants’ employees work, for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. A Labor Peace Agreement shall not mandate a particular method of election or certification of a Bona Fide Labor Organization as an Applicant’s employees’ representative.
“Local Resident” means an individual who is domiciled, as defined by Section 349(b) of the California Elections Code, within the City for at least seven days immediately prior to commencing work for a Cannabis Business.
“M-license” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“M-licensee” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Manufacture” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Mature Plant” means a Cannabis plant that is flowering.
“Medicinal Cannabis” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Medical Cannabis Dispensary” means a cooperative or collective operating under the authority of a permit issued by the Director of Health under Article 33 of the Health Code.
“Medicinal Cannabis Retailer” means a fixed place of business where Medicinal Cannabis and/or Medicinal Cannabis Products are Sold to individuals who qualify under California Health and Safety Code Sections 11362.7 et seq. to use Medicinal Cannabis.
“Office” means the Office of Cannabis or any successor office or agency.
“Owner” means any of the following:
(a) A Person with an aggregate ownership interest of 20% or more in the Person applying for a Cannabis Business Permit or a Permittee, 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; or
(d) A Person who will be participating in the direction, control, or management of the Person applying for a permit.
“Permittee” means any Person to whom a Cannabis Business Permit is issued under this Article 16, and any authorized agent or designee of such Person.
“Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other entity, or other group or combination acting as a unit. Person includes both the plural and singular.
“Physician’s Recommendation” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Pre-Existing Non-Conforming Operator” means a Cannabis Business that engaged in Commercial Cannabis Activities relating to Medicinal Cannabis as of September 26, 2017, in a location where such activities were not authorized by or consistent with the Planning Code.
“Premises” has the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Processing” means the drying, curing, trimming, or packaging of Cannabis. “Processing” does not include the growing, planting, or harvesting of Cannabis.
“Referring Department” means any City department, agency, office, board, or commission that is required by this Article 16, or its implementing regulations, to review an Applicant’s application for a Cannabis Business Permit prior to issuance of such permit by the Director.
“Security Guard” has the meaning set forth in Section 1060 of the Police Code, as may be amended from time to time.
“Security Plan” means a plan that adequately addresses the safety of persons and property at Cannabis Businesses, developed in consultation with the Police Department, and approved as a condition of the Cannabis Business Permit by the Director.
“Sell,” “sale,” and “to sell” have the meaning set forth in Section 26001 of the California Business and Professions Code, as may be amended from time to time.
“Smoke” or “Smoking” has the meaning set forth in Section 11362.3 of the California Health and Safety Code, as may be amended from time to time.
“State Cannabis License” means a license to engage in a Commercial Cannabis Activity, issued pursuant to Division 10 of the California Business and Professions Code.
“State Licensing Authority” means the state agency responsible for the issuance, renewal, or reinstatement of a State Cannabis License.
“Storefront Cannabis Retailer” means either of the following: Medicinal Cannabis Retailer or Cannabis Retailer.
“Temporary Cannabis Business Permit” means a Permit issued by the Director under Section 1605 of this Article 16 authorizing the Temporary Permit holder to engage in time-limited Commercial Activities.
“Tobacco Products” has the meaning set forth in Section 19H.2 of the Health Code, as may be amended from time to time.
“Volatile Solvent” has the meaning set forth in Section 26130(b) of the California Business and Professions Code, as may be amended from time to time.
(a) It shall be unlawful to engage in any Commercial Cannabis Activity or to operate a Cannabis Business within the City without obtaining and maintaining:
(1) A permit therefor issued by the Office of Cannabis;
(2) A license therefor issued by a State Licensing Authority pursuant to Division 10 of the California Business and Professions Code; and
(3) Any such other licenses, permits, certifications, or registrations that may be required by State or City law.
(b) It shall be unlawful for any Person to engage in any Commercial Cannabis Activity for which a permit has been granted under this Article 16 if such permit has been revoked, or during any period in which such permit is suspended.
(c) If any license, permit, certification, or registration required for the operation of a Cannabis Business is denied, suspended, modified, revoked, or expired, the Cannabis Business and any Referring Department responsible for the action shall notify the Director of such action in writing within two business days.
(d) It shall be unlawful for any Person who is required to surrender a permit upon the sale of a Cannabis Business, as required by Section 1608 of this Article 16, to fail to do so.
(Added by Ord. 230-17, File No. 171042, App. 12/6/2017, Eff. 1/5/2018)
(a) The Director, in consultation with the Human Rights Commission, shall implement an Equity Program designed to foster equitable access to participation in the cannabis industry, including equitable access to promotional and ownership opportunities in the industry. The Equity Program shall provide assistance to communities unfairly burdened by the War on Drugs, and shall be designed to ensure full and equal access to resources and opportunities made available as a result of Proposition 64. In particular, the Cannabis Equity Program shall provide support to individuals who have experienced social indicators that exacerbate inequities, and shall create strategies to uplift communities where those inequities have been concentrated.
(b) Equity Applicants. The Equity Program shall offer priority permit processing, as provided in Section 1606, to an individual who meets the following Equity Criteria (“Equity Applicant”):
(1) Is a natural person;
(2) At the time of application, has assets, excluding non-liquid assets and retirement accounts, that do not exceed asset limits established by the Director;
(3) Submits an application for a Cannabis Business Permit in any of the following capacities:
(A) As the sole owner/operator of the Applicant;
(B) As an individual with an ownership interest of at least 40% in the corporate Applicant, and who is also the Chief Executive Officer of the corporate Applicant;
(C) As an individual with an ownership interest of at least 51% in the corporate Applicant; or
(D) As the Executive Director or member of the board of directors of a not-for-profit Applicant where a majority of the members of the board of directors satisfy the requirements of subsections (b)(2) and (4) of this Section 1604; and
(4) Meets three or more of the following additional criteria:
(A) At the time of application, is a member of a household that earns no more than 80% of the San Francisco Area Median Income, adjusted for household size;
(B) During the period 1971-2016, was arrested for, convicted of, or adjudged to be a ward of the juvenile court for any crime under the laws of California or any other jurisdiction relating to the sale, possession, use, manufacture, or cultivation of Cannabis;
(C) After 1995, either lost housing in San Francisco, as evidenced by eviction, foreclosure, or revocation of housing subsidy; resided in permanent supportive housing, as defined in Administrative Code Section 20.54.2, in San Francisco; stayed overnight at a Navigation Center, as described in Administrative Code Chapter 106, in San Francisco, for 90 non-consecutive days; stayed overnight at a Shelter, as defined in Administrative Code Section 20.41, in San Francisco, for 90 non-consecutive days; or resided in a City-funded Single Room Occupancy building;
(D) Has a parent, sibling, or child who, during the period 1971-2016, was arrested for, convicted of, or adjudged to be a ward of the juvenile court for any crime under the laws of California or any other jurisdiction relating to the sale, possession, use, manufacture, or cultivation of Cannabis;
(E) Attended a school under the jurisdiction of the San Francisco Unified School District for five years, either consecutively or in total, during the period 1971-2016; or
(F) During the period 1971-2016, lived for at least five years, either consecutively or in total, in San Francisco census tracts where at least 17% of the households had incomes at or below the federal poverty level, as determined by the Director.
For purposes of Section 1604(b)(3), an “ownership interest” in the corporate Applicant shall include a right, proportionate to the interest held, to share in the business’s profits, including dividends, distributions, or other payments; a right, proportionate to the interest held, to the proceeds of a sale of the business’s assets, liquidation of the business, merger of the business into another business, or another transaction that would signify the end of the original business; and a right, proportionate to the interest held, to vote on fundamental decisions relating to the business.
(c) Equity Incubators. The Equity Program shall offer priority permit processing, as provided in Section 1606, to Equity Incubators. For purposes of this Article 16, an Equity Incubator is an Applicant that does not qualify as an Equity Applicant, but that submits with its Cannabis Business Permit application a Cannabis Equity Incubator Agreement in which it identifies no less than one Equity Applicant in which, or in whose Cannabis Business, the Equity Incubator and its Owner(s) have no ownership interest or profit-sharing arrangement; agrees to provide any such identified Equity Applicant commercial space and security resources or, in either or both cases, the fair market value of same on a continuous basis for a total of no less than three years, beginning at any time after the Director verifies that the Equity Applicant has received all necessary approvals to begin building out its commercial space for use as a Cannabis Business; and commits to comply with the following additional operating requirements on a continuous basis for no less than three years, beginning no later than the date the Equity Incubator begins its operation as a Cannabis Business:
(1) Ensure that at least 30% of all Business Work Hours are performed by Local Residents. Business Work Hours performed by residents of states other than California shall not be considered in calculation of the number of Business Work Hours to which this requirement applies;
(2) Ensure that at least 50% of the Equity Incubator’s employees satisfy the requirements of subsection (b)(4) of this Section 1604;
(3) Provide a community investment plan demonstrating engagement with businesses and residents located within 500 feet of the site of the proposed Cannabis Business;
(4) Provide the identified Equity Applicant, directly or indirectly, with community outreach services, security services for the Equity Applicant’s Premises, and any support necessary for the Equity Applicant to comply with the Good Neighbor Policy required in Section 1609(b)(19); and
(5) Comply with one of the following additional operating requirements:
(A) Submit to the Director for review and approval a written, actionable “Equity Incubator Plan” describing how the Equity Incubator will encourage and support the establishment and growth of Equity Applicants in which, or in whose Cannabis Business, the Equity Incubator Applicant and its Owner(s) have no ownership interest or profit sharing arrangement, including but not limited to any Equity Applicant identified in the Equity Incubator Plan, by, among other things, providing business plan guidance, operations consulting, personnel, or1
and/or technical assistance. The services listed in the Equity Incubator Plan must be enumerated, and include an estimated dollar value of those services. The aggregate dollar value of the services must equal or exceed the sum of (i) 10% of the rent for, or, if the Equity Incubator owns the Equity Incubator’s Premises, 10% of the rental market value of, the Equity Incubator’s Premises, and (ii) the annual total costs of security services at the Equity Incubator’s premises. On or before March 1 of each year, the Equity Incubator shall submit to the Director an annual report covering the prior calendar year, signed by both the Equity Incubator and the Equity Applicant, describing the services provided under this subsection (c)(5)(A); or
(B) Provide an Equity Applicant in which, or in whose Cannabis Business, the Equity Incubator Applicant and its Owner(s) have no ownership interest or profit-sharing arrangement with rent-free commercial space either adjacent to the Equity Incubator’s Premises or off-site, in which the Equity Applicant may conduct its Cannabis Business. If such rent-free commercial space is provided off-site, the Equity Incubator must provide the greater of 800 square feet or the equivalent of at least 10% of the square footage of the Equity Incubator’s Premises. If such rent-free commercial space is provided adjacent to the Equity Incubator’s Premises, the Equity Incubator must provide either 800 square feet or the equivalent of at least 10% of the square footage of the Equity Incubator’s Premises. The Equity Incubator’s provision of this rent-free commercial space to an Equity Applicant may begin at any time after the Director verifies that the Equity Applicant has received all necessary approvals to begin building out its commercial space for use as a Cannabis Business, and the three-year minimum period in which the Equity Incubator must continue to provide rent-free space to the Equity Applicant shall be dated from the Equity Applicant’s earliest use of that rent-free space.
CODIFICATION NOTE
(a) Cannabis Business Registration. The Office of Cannabis shall initiate a Cannabis Business Registration Period in order to collect information from Persons wishing to apply for Cannabis Business Permits. During the Cannabis Business Registration Period, such Persons shall have the opportunity to register with the Office of Cannabis, and to provide such information as may be required by the Director, including but not limited to:
(1) Information regarding the type(s) of Cannabis Business Permit(s) and State Cannabis License(s) for which they intend to apply in 2018;
(2) Information about the location of the proposed Cannabis Business, including but not limited to proof that the property owner has authorized the use of the property as a Cannabis Business;
(3) Copies of all applicable licenses, permits, certifications, and registrations issued by the City or the State and held by the Owner of the proposed business, including but not limited to Hazardous materials registrations, site permits, Business Registration Certificates, and/or Seller’s Permits; and
(4) Such other information, documents, and/or attestations as the Director may deem necessary or appropriate for registration.
(b) Registration a Condition of Eligibility for Temporary Cannabis Business Permit. Persons that do not register with the Office of Cannabis during the Cannabis Business Registration Period shall not be eligible to apply for or receive a Temporary Cannabis Business Permit, as set forth in subsection (d) of this Section 1605.
(c) Medical Cannabis Dispensaries.
(1) To ensure the continued availability of Medicinal Cannabis for individuals who qualify under California Health and Safety Code Sections 11362.7 et seq. to use Medicinal Cannabis, a Medical Cannabis Dispensary that holds a valid permit to operate from the Department of Public Health as of the effective date of this Article 16 may continue to operate as a Medical Cannabis Dispensary at the location identified in its Medical Cannabis Dispensary permit and consistent with the terms of Article 33 of the Health Code, provided that:
(A) The Owner of the Medical Cannabis Dispensary provides the Office of Cannabis with information identifying the type(s) of Cannabis Business Permits and State Cannabis Licenses for which the Owner intends to apply in 2018, and such other information as may be required by the Director;
(B) The Owner of the Medical Cannabis Dispensary applies for and obtains a temporary or permanent State Cannabis License;
(C) The Owner of the Medical Cannabis Dispensary applies for a Cannabis Business Permit within 30 days of the date that the Office of Cannabis makes such applications available; and
(D) The Owner of a Medical Cannabis Dispensary agrees to surrender its Medical Cannabis Dispensary permit to the Department of Public Health upon being awarded a Cannabis Business Permit.
(2) A Medical Cannabis Dispensary’s permit to operate, as issued under Article 33 of the Health Code, shall expire as a matter of law when it is surrendered to the Department of Public Health, as set forth in subsection (c)(1)(D) of this Section 1605, or upon the sunset of Article 33, whichever occurs sooner.
(d) Temporary Cannabis Business Permits. The Office of Cannabis shall make applications available for Temporary Cannabis Business Permits for all permit categories other than Storefront Cannabis Retailers. In order to be eligible for a Temporary Cannabis Business Permit, an Applicant must do all of the following:
(1) Submit an application, on a form to be prescribed by the Director;
(2) Demonstrate compliance with the Cannabis Business Registration process set forth in subsection (a) of this Section 1605;
(3) Demonstrate that as of September 26, 2017, the Applicant was engaging in Commercial Cannabis Activities relating to Medicinal Cannabis in the City and has continued to engage in such activities without interruption;
(4) Demonstrate that the proposed Cannabis Business complies with the Planning Code;
(5) Authorize and submit to the inspection of the proposed Premises by the Office of Cannabis, the Fire Department, the Department of Building Inspection, the Department of Public Health, and such other City departments, agencies, and offices as may be necessary to confirm that the proposed Cannabis Business will operate in compliance with law and with the applicable interim health and safety standards;
(6) Acknowledge the obligation to pay any non-refundable application and/or inspection fees that the Office of Cannabis and/or the Referring Departments may impose in connection with the application for a Temporary Cannabis Business Permit; and
(7) Demonstrate that the proposed Cannabis Business complies with applicable interim health and safety standards developed by the Director in consultation with the Department of Building Inspection, the Fire Department, the Police Department, and the Department of Public Health. The interim health and safety standards shall be sufficient to protect the health and safety of employees, neighbors, and Customers of the proposed Cannabis Business, and to prohibit unlawful access to Cannabis and Cannabis Products by underage individuals.
(e) Review, award, and denial of Temporary Cannabis Business Permits. The Director shall ensure that the Premises are inspected by all relevant City Departments, and shall review all documentation submitted by the Applicant for the Temporary Cannabis Business Permit in support of the application. If the application is incomplete, the Director shall advise the Applicant of the deficiencies, and give the Applicant 30 days in which to correct them. If the application is complete, the Director shall determine whether the Applicant has demonstrated compliance with subsection (d) of this Section 1605, and any implementing regulations. After determining whether the Applicant has met these standards, the Director shall either award, award with conditions, or deny the Temporary Cannabis Business Permit.
(f) Appeal of Denial of Application for Temporary Cannabis Business Permit. The decision of the Director to award, award with conditions, or deny a Temporary Cannabis Business Permit may be appealed to the Board of Appeals in the manner prescribed in Article 1 of the San Francisco Business and Tax Regulations Code.
(g) Activities Authorized by Temporary Cannabis Business Permit. A Temporary Cannabis Business Permit issued under this Section 1605 shall authorize the Permittee to engage in all of the activities authorized by a Cannabis Business Permit of the same category, as set forth in Sections 1623 - 1629 of this Article 16.
(h) Duration. A Temporary Cannabis Business Permit issued under this Section 1605 shall be valid for a period of 120 days and may be extended for additional 120-day periods at the discretion of the Director. Notwithstanding the prior sentence, the Director shall not issue a new temporary permit after January 1, 2019, and shall not extend the term of a Temporary Cannabis Business Permit issued to an applicant for a Cannabis Business Permit under this Article 16 past December 31, 2024.
(i) Temporary Cannabis Business Permit does not guarantee rights regarding a permanent permit. A Temporary Cannabis Business Permit does not obligate the Director to issue a permanent permit pursuant to Section 1615 of this Article 16, or create a vested right in the holder to either an extension of the temporary permit or to the granting of a subsequent permanent permit.
(j) Duty to apply for permanent permit. A Person that is awarded a Temporary Cannabis Business Permit under this Section 1605 must apply for a Cannabis Business Permit, as set forth in Section 1606, within 30 days of when the Office of Cannabis makes applications for such permits available. The Director shall not accept applications for Temporary Cannabis Business Permits after making applications for Cannabis Business Permits available.
(k) Registration of Pre-Existing Non-Conforming Operators. A Pre-Existing Non-Conforming Operator shall be eligible to receive technical assistance and apply for a Cannabis Business Permit, as set forth in Section 1606 of this Article 16, provided it registers with the Office of Cannabis during the Cannabis Business Registration Period and provides the following information and documentation:
(1) Information regarding the type(s) of Commercial Cannabis Activities that the operator conducts;
(2) Information regarding the type(s) of Cannabis Business Permit(s) and State Cannabis License(s) for which the operator intends to apply in 2018;
(3) Demonstration that as of September 26, 2017, the operator was engaging in Commercial Cannabis Activities relating to Medicinal Cannabis in the City;
(4) Copies of all applicable licenses, permits, certifications, and registrations issued by the City or the State and held by the Owner of the proposed business, including but not limited to Hazardous materials registrations, site permits, Business Registration Certificates, and/or Seller’s Permits;
(5) An affidavit or declaration made under penalty of perjury by an Owner certifying that the Pre-Existing Non-Conforming Operator will not engage in Commercial Cannabis Activities in a location where such activities are not authorized by or consistent with the Planning Code; and
(6) Such other information, documents, and/or attestations as the Director may deem necessary or appropriate for registration.
(Added by Ord. 230-17, File No. 171042, App. 12/6/2017, Eff. 1/5/2018; amended by Ord. 279-18, File No. 181041, App. 11/20/2018, Eff. 12/21/2018; Ord. 302-18, File No. 180912, App. 12/21/2018, Eff. 1/21/2019; Ord. 274-19, File No. 190842, App. 11/27/2019, Eff. 12/28/2019; Ord. 198-21, File No. 210865, App. 11/5/2021, Eff. 12/6/2021; Ord. 222-22, File No. 221002, App. 11/4/2022, Eff. 12/5/2022)
(a) Except as provided in subsection (b) of this Section 1606, the Director shall issue Cannabis Business Permits only to Applicants that meet one or more of the following criteria:
(1) Qualify as an Equity Applicant or an Equity Incubator;
(2) Possess a valid permit to operate a Medical Cannabis Dispensary issued pursuant to Article 33 of the Health Code prior to the effective date of the ordinance, in Board File Number 171042, establishing this Article 16;
(3) Were issued a Temporary Cannabis Business Permit under Section 1605 of this Article 16;
(4) Have demonstrated to the Director’s satisfaction that the Applicant operated in compliance with the Compassionate Use Act of 1996, and was forced to discontinue operations as a result of federal prosecution or threat of federal prosecution;
(5) Applied for a Medical Cannabis Dispensary Permit that required referral to and approval by the Planning Commission, and received approval from the Planning Commission prior to the effective date of the ordinance, in Board File Number 171042, establishing this Article 16;
(6) Registered with the Office of Cannabis as a Pre-Existing Non-Conforming Operator, as set forth in subsection (k) of Section 1605 of this Article 16; or
(7) Possessed a valid permit to operate a Medical Cannabis Dispensary, issued under Article 33 of the Health Code prior to January 6, 2018, or a valid Temporary Cannabis Business Permit, issued under Section 1605(d), but were forced to discontinue operations due to the termination of a lease, provided that:
(A) The lease terminated before December 31, 2018;
(B) The lease termination was not due to the lessee’s breach of the lease;
(C) The Owner of the proposed Cannabis Business is identical to the Owner of the former Medical Cannabis Dispensary; and
(D) The Permittee seeks an application for a Cannabis Business Permit no later than July 1, 2019.
(b) The Director may award a Cannabis Business Permit to an Applicant that does not meet the criteria set forth in subsection (a) of this Section 1606 if the total number of Cannabis Business Permits awarded to Equity Applicants in the permit category sought by the Applicant has reached 50% of the total number of Cannabis Business Permits awarded in that permit category.
(c) The Office of Cannabis shall review and process applications for Cannabis Business Permits in an order that reflects the Applicant’s priority category:
(1) First priority: applications from Equity Applicants that, independently or in combination with one or more other Equity Applicants, hold a 100% ownership interest in the Cannabis Business for which they have applied for a Cannabis Business Permit;
(2) Second priority: applications from current Temporary Cannabis Business Permitees1
that demonstrate to the satisfaction of the Director that they meet all of the following criteria:
(A) Hold Type 6, Type 7, or Type N licenses, within the meaning of 17 C.C.R. 40118, as may be amended from time to time, and current approval from the California Department of Public Health to operate as a “shared-use facility,” as defined in 17 C.C.R. 40190, as may be amended from time to time;
(B) Have current agreements allowing for use of a shared-use facility owned or leased by the Permittee by one or more current holders of Type S licenses, as defined in 17 C.C.R. 40190, as may be amended from time to time, that qualify as Equity Applicants under Section 1604(b) of this Article 16, and that are not owned or controlled by any Owner of the Permittee that owns or leases the shared-use facility; and
(C) Commit in the agreements described in subsection (c)(2)(B), above, to use of their shared-use facility by one or more Equity Applicants to a degree that the Director finds to be reasonable, taking into account the available space within the facility, the current use of the facility space by the Permitee’s 1
business, and the demand for shared-use facilities among Equity Applicants.
(3) Third priority: all Equity Applicants that do not meet the criteria for first or second priority processing;
(4) Fourth priority: applications from Equity Incubators;
(5) Fifth priority: applications from Applicants that meet the requirements of Section 1606(a)(4) or 1606(a)(6).
(7) Seventh priority: applications that demonstrate a commitment on the part of the Applicant to provide benefits to the community in which the Cannabis Business is located, including but not limited to workforce opportunities and community benefits contributions; and
(8) Eighth priority: all other applications.
(d) Each Owner Treated as Applicant. Unless this Article 16 specifically provides otherwise, each Owner of a Cannabis Business or proposed Cannabis Business shall be subject to the same obligations that this Article 16 imposes on an Applicant. Such obligations include, but are not limited to, the obligation to provide to the Director the information that this Article 16, and any regulations promulgated thereunder, require from an Applicant.
(e) As of the effective date of the ordinance in Board File No. 200144 enacting this subsection (e), the Director shall decline to accept for processing any new applications for Cannabis Business Permits under this Article 16 in the following categories: Cannabis Retailer, Storefront Cannabis Retailer, Delivery-Only Cannabis Retailer, Medicinal Cannabis Retailer, and Cannabis Microbusiness (to the extent relating to retail activity). No later than June 30, 2027, the Controller shall submit to the Board of Supervisors a report that analyzes various impacts of the moratorium on new applications for retail-related Cannabis Business Permits, including its financial impacts on the City and the City’s cannabis industry, operational impacts on the Office of Cannabis, and impacts on City neighborhoods.
(Added by Ord. 230-17, File No. 171042, App. 12/6/2017, Eff. 1/5/2018; amended by Ord. 302-18, File No. 180912, App. 12/21/2018, Eff. 1/21/2019; Ord. 301-19, File No. 191174, App. 12/20/2019, Eff. 1/20/2020; Ord. 176-21, File No. 210421, App. 10/29/2021, Eff. 11/29/2021; Ord. 106-23, File No. 200144, App. 6/23/2023, Eff. 7/24/2023)
CODIFICATION NOTE
1. So in Ord. 176-21.
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