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HomeMy Public PortalAboutA 2020-08-26 - CITIZEN OVERSIGHT COMMITTEE AGENDA City of 43 : 11330 Bullis Road ,�� LYN %VOLynwood, CA 90262 California (310) 603-0220 • CITIZEN OVERSIGHT COMMITTEE REGULAR MEETING Wednesday, August 26, 2020 6:00 p.m. TELECONFERENCE VIA WEBEX Participate by calling (310) 372-7549 and entering Conference Code: 852724 AGENDA In compliance with the Americans with Disabilities Act(ADA), if you are a disabled person and need a disability related modification or accommodation to participate in this meeting, please contact the City Clerk's Office at(310)603-0220 ext. 214. Requests must be made as early as possible, and at least one full business day before the start of the meeting. Staff reports, writings, or other material related to an item on this agenda which are distributed to the Citizen Oversight Committee less than 72 hours before this scheduled meeting shall be available for public inspection in the Office of the City Clerk located at 11330 Bullis Road, Lynwood, CA 90262, during normal business hours. 1. CALL TO ORDER 2. CERTIFICATION OF AGENDA -D7/64/ 3. PLEDGE OF ALLEGIANCE o , E C '." Ei> 4. ROLL CALL AUG 1 9 2020 Paulette A. Bradley, Chair CITY OF LYNW00D Oscar Flores, Vice Chair CITY CLERKS OFFlCF Joaquin Mesinas Brenda Rivera _ 401 5. APPROVAL OF MINUTES a. Minutes of September 25, 2019 6. PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) 7. NON-AGENDA PUBLIC ORAL COMMUNICATIONS (This time is reserved for members of the public to address the Citizen Oversight Committee relative to matters that are not on the agenda. No action may be taken on non-agenda items unless authorized by law). 8. NEW/OLD BUSINESS a. Fiscal Year (FY) 2019-2020 — Cannabis Fees Collected 9. CITIZEN OVERSIGHT COMMITTEE ORAL AND WRITTEN COMMUNICATIONS (This section is designed for Committee Members to report on outside meetings attended that pertain to the work of the Committee). Paulette A. Bradley, Chair Oscar Flores, Vice Chair Joaquin Mesinas, Committee Member Brenda Rivera, Committee Member 10.ADJOURNMENT APPROVED BY: Michelle G. Ramirez,' Director of Communi Development Citizen Oversight Committee CITIZEN OVERSIGHT COMMITTEE REGULAR MEETING MINUTES September 25, 2019, 6:00 p.m. 1. CALL TO ORDER — Meeting was called to order by Community Development Director Michelle Ramirez at 6:09 p.m. 2. CERTIFICATION OF AGENDA—Executive Assistant Suzanne Trejo confirmed the agenda was duly posted. 3. PLEDGE OF ALLEGIANCE — Pledge of allegiance was led by Community Development Director Michelle Ramirez. • 4. ROLL CALL — Committee Members Bradley, Flores and Rivera were present. Committee Member Mesinas was absent. 5. REORGANIZATION —Committee Member Rivera nominated Committee Member Bradley as Chair of the Committee. Nomination was second by Committee Member Flores. Votes resulted in: Ayes: Bradley, Flores, Rivera Noes: None Abstain: None Absent: Mesinas Chair Bradley nominated Committee Member Flores as Vice Chair of the Committee. Nomination was second by Committee Member Rivera. Votes resulted in: Ayes: Bradley, Flores, Rivera Noes: None Abstain: None Absent: Mesinas 6. APPROVAL OF MINUTES — None 7. PUBLIC ORAL COMMUNICATIONS - None 8. NON-AGENDA PUBLIC ORAL COMMUNICATIONS— None 9. NEW/OLD BUSINESS a. Setting of Meetings Community Development Director Michelle Ramirez read the staff report and the recommendation that the Citizen Oversight Committee formally establish the meeting date of the fourth (4th) Wednesday of each month at 6:00 p.m. in the old Council Chambers as the official date for the Citizen Oversight Committee meetings. Chair Bradley made a motion to approve the recommended date of the meetings. Vice Chair Flores second the motion. - Votes resulted in: Ayes: Bradley, Flores, Rivera Noes: None Abstain: None Absent: Mesinas b. Role of Committee Community Development Director Michelle Ramirez read the staff report and the recommendation that the Citizen Oversight Committee receive and file this report. Ms. Ramirez proceeded to give an overview of the established Measure PS funds (one-cent sales tax increase) and Commercial Cannabis related activities. City Council has currently approved 19 facilities to operate within the city, which include manufacturing, extraction, distribution, delivery and testing of cannabis. As a result of the two initiatives, the city created an Oversight Committee to assist and provide guidance to the Council on the expenditures of these funds. Ms. Ramirez stated Measure PS funds are currently being utilized for Public Safety and Infrastructure. The city just started collecting quarterly sales taxes for the active Cannabis businesses. Four operators are currently up and running. NMC Organization — Distribution General Testing — Distribution Natural Plant Extract of CA— Manufacturing & Distribution Pure CA— Manufacturing & Distribution Ms. Ramirez stated this information was provided as general information of the two funds and next meeting she will present actual figures and current balances of the funds. Chair Bradley inquired out of the 19 cannabis businesses initially approved by council in 2017, will the remaining inoperable businesses be allowed to continue to establish their business or is there a cutoff date. Ms. Ramirez responded that within the development agreements there is no cutoff date. However, the development agreements do include a five-year review of the business and the permits are only valid for ten years. Chair Bradley also inquired if the quarterly sales tax revenue from cannabis is separated from the general fund or inclusive. Ms. Ramirez responded that all money collected is general fund revenue however it is separated by accounts. There is a separate accounting of the funds. Vice Chair Flores inquired where the funding collected from the citations issued goes to. Ms. Ramirez responded that these funds are also deposited into a separate account. The revenue from these fines also assist with the Sheriff's and Public Safety. Vice Chair Flores inquired if the committee can expect the hear recommendations on projects presented by staff with the use of the funds. Ms. Ramirez responded that if projects are proposed, yes. Staff will present various items to the committee such as updates on fund balances, expenditures of the funds or prosed projects. The committee may also present staff with recommendations or suggestions for council consideration. Chair Bradley adjourned the meeting. 10.ADJOURNMENT—The meeting adjourned at 6:34 p.m. The next Regular Citizen Oversight Committee meeting is scheduled for October 23, 2019 at 6:00 p.m. in the City Hall Council Chambers, 11330 Bullis Road, Lynwood, California. i:' AGENDA STAFF REPORT I . DATE: August 26, 2020 TO: Honorable Chair and Members of the Citizen Oversight Committee APPROVED BY: Michelle G. Ramirez, Director of Community Development PREPARED BY: Suzanne Trejo, Executive Assistant SUBJECT: Fiscal Year (FY) 2019-20 — Cannabis Fees Collected Recommendation: It is recommended that the Citizen Oversight Committee receive and file this report. No further action is necessary. Background: • As part of the operation of a cannabis facility within Lynwood, there are a number of fees that must be paid to the City,which include an annual Cost Recovery Fee, Quarterly Fees, and Transfer Fees, when applicable. The purpose of this report is to update the Citizen Oversight Committee on the fees collected to date for Fiscal Year 2019-20. Discussion: Cost Recovery Fee (CRF) The City assess an annual fee to each cannabis operator to recover reasonable processing and monitoring costs relating to the cannabis operator business. The total CRF for FY 2018-19 was $251,003.88, which was broken down by $190,347.71 staff costs and $60,656.17 attorney costs. This number divided by the 19 cannabis operators would be $13,210.73 per operator. However, according to the executed Development Agreements, the maximum CRF allowed in FY 2018-19 was $7,000. While this fee is to cover City expenses accumulated in FY 2018-19, it is not collected until the FY has ended. Therefore, this fee is collected and accounted for in the FY 2019-20. As of June 30, 2020, 18 of the 19 cannabis operators had paid, as shown below. Staff is currently working with the one (1) remaining,cannabis operator (Aftercare) on collecting payment. However, until this payment is received, the City will not accept any plans, issue any further permits, or renew any business license for this cannabis operator until the CRF is paid. 1 Cannabis Cost Recovery Fees for FY 2018-19 Licensee Amount Paid Date BECC Holding $7,000 10/7/2019 Broken Arrow $7,000 4/7/2020 Cali Med $7,000 12/19/2019 Cali Premium $7,000 6/17/2020 COF Organic Farms, Inc. $7,000 8/27/2019 General Testing $7,000 7/1/2020 Green Fantasy $7,000 8/21/2019 Growerks $7,000 10/2/2019 JB Los Angeles Farmers $7,000 8/21/2019 Lacturnus $7,000 1/6/2019 Lynwood Canna Plex $7,000 10/15/2019 Magnolia Extracts $7,000 1/8/2019 Natural Plant Extract of CA $7,000 9/4/2019 NMC Organization, Inc. $7,000 9/12/2019 Norton Ave. Ventures $7,000 10/29/2019 PGH, LLC $7,000 9/25/2019 Pure CA $7,000 1/28/2020 RD Lynwood South $7,000 12/17/2019 $126,000 Quarterly Fees During the FY 2019-20, the City had four (4) cannabis operators in operation. The sites are listed below: 1. Natural Plant Extract of California— 11116 Wright Road 2. NMC Organization Incorporated — 10810-44 Alameda Avenue 3. Pure CA—2990 Martin Luther King, Jr. Boulevard 4. RD Lynwood South - 11510 Alameda Street As part of each cannabis facility Development Agreement, each operator must make quarterly payments to the City. The quarterly payments are based on: 1. Annual fee of$10.00 per square foot of cultivation area (canopy); 2. The higher of the following: an annual fee of two percent (2.0%) of gross income from manufacturing activities; or a sum that shall be set at twenty thousand dollars ($20,000) during the first year of operations and shall rise in increments of twenty thousand dollars each succeeding year until it reaches the maximum of one hundred forty thousand dollars ($140,000.00); 2 3. Annual fee of one and one-half percent (1.5%) of gross income from Distribution/transportation of product for anyone other than Owner; and 4. Annual fee of two and one-half percent(2.5%) of gross income from Delivery activities. The operator must show proof of quarterly revenues by producing their quarterly return submitted to the State, which is used to calculate the amount owed to the City. The schedule of the payments are shown below. • July—September: payment due by October 15th • October—December: payment due by January 15th • January—March: payment due by April 15th • April — June: payment due by July 15th (this date was extended by the State due to COVID-19 until September 15th) To date, for FY 2019-20, the City has received a total of $156,593.17 in quarterly fees. It should be noted that three (3) of the four (4)cannabis operators have not yet submitted their payment for the period April—June, as it is not due until September 15th. The three operators include Natural Plant Extract of CA, NMC Organization, and RD Lynwood South. Cannabis Quarterly Fees for FY 2019-20 Licensee Amount PaidActivity Natural Plant Extract of CA $3,539.31 Distribution NMC Or•anization, Inc. $66,613.67 Deliver and Distribution Pure CA $42,072.70 Extraction RD L nwood South $44,367.49 Distribution $156,593.17 Transfer or Change in Ownership During the current FY, five (5) cannabis operators had applied for a Transfer or Change in Ownership as allowed under the Lynwood Municipal Code Section 4-34.7 "Cannabis -Transfer or Change in Ownership or Location". Out of the five (5) applications received, the City Manager approved all of them. In completing a Transfer or Change in Ownership, a new complete application must be submitted to the City Manager for each person interested in being added to the ownership along with the required payment of $22,500 ($7,500 application fee and $15,000 license fee). As part of the review, each new owner being added must also complete a Live Scan and private background investigation. Shown below are the five (5) ownership changes that were approved in FY 2019-20 and the fees collected by the City. 3 Cannabis Transfer of Ownership Fees (Amended Application) Licensee Amount Paid Date BECC Holding $22,500 9/16/2019 Lynwood Canna Plex $22,500 9/17/2019 Green Fantasy $22,500 10/17/2019 Lacturnus Research Assoc. $22,500 11/7/2019 National Plant Extract $22,500 6/3/2020 $112,500 Use of Funds The total amount of funds collected so far in FY 2019-20 is $395,093.17. These funds are used to offset program costs as related to the enforcement of the Cannabis and Development Agreement ordinances, which are attached to this staff report for your reference. ATTACHMENT(S): Ordinance Number 1564—Development Agreements Ordinance Number 1565-Cannabis 4 ORDINANCE NO. 1564 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LYNWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA APPROVING AMENDED DEVELOPMENT AGREEMENTS FOR THE OPERATION OF COMMERCIAL CANNABIS CULTIVATION, MANUFACTURING, DISTRIBUTION, DELIVERY, AND TESTING FACILITIES THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY ORDAIN AS FOLLOWS: Section 1. 1.1 Section 65865 of the State of California Government Code provides that cities may enter into a development agreement with any person having a legal or equitable interest in real properties for the development of properties. 1.2 Section 65868 of the State of California Government Code provides that development agreements shall be amended by ordinance. 1.3 Chapter 4, Title 34 of the City of Lynwood Municipal Code provides that development agreements may be entered into as a condition of issuance by the City of regulatory permits for commercial cannabis cultivation, manufacturing, distribution, delivery, and testing facilities. 1.4 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Aftercare Alliance Group LLC for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 2899 Norton Avenue. 1.5 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with BECC Holdings for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 10857 Drury Lane. 1.6 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Broken Arrow Private Organization for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 2820 Martin Luther King, Jr. Boulevard. 1.7 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Cali Med for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 2827 Norton Avenue. 1 { 1.8 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Cali Premium Produce LLC for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 11108 Wright Road. •1.9 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with COF Organic Farms, Inc., for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 10869 Drury Lane. 1.10 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with General Testing LLC for a commercial cannabis manufacturing, distribution, and delivery facility for property located at 2826 Norton Avenue. 1.11 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Green Fantasy Corp. for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 11511 Bellinger Street. 1.12 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Growerks, LLC for a commercial cannabis manufacturing, distribution, and delivery facility for property located at 11100 Wright Road. 1.13 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with JB Los Angeles Farmers for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 2851 Lynwood Road. 1.14 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Lacturnus Research Association, Inc., for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 11010-20 Santa Fe Avenue, 1.15 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Lynwood Canna Plex for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 10842-46-68 Stanford Avenue. 1.16 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Magnolia Extracts, LLC for a commercial cannabis manufacturing, distribution, and delivery facility for property located at 11118-22 Wright Road. 2 1.17 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Natural Plant Extract of California for a commercial cannabis manufacturing, distribution, and delivery facility for property located at 11116 Wright Road. 1.18 It is the desire of the City Council to enter into an amended development agreement with NMC Organization, Inc. for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located 10810-44 Alameda Street. 1.19 It is the desire of the City Council to enter into an amended development agreement with Norton Avenue Ventures for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located 2830-60 Norton Avenue. 1.20 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with PGH, LLC for a commercial cannabis testing facility for property located at 3148 Martin Luther King, Jr., Boulevard. 1.21 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with Pure CA for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 2990 Martin Luther King, Jr., Boulevard. 1.22 It is the desire of the City of Lynwood City Council to enter into an amended development agreement with RD Lynwood South for a commercial cannabis cultivation, manufacturing, distribution, and delivery facility for property located at 11510 Alameda Street. 1.23 The amended development agreements were reviewed and discussed by the Lynwood Planning Commission, which adopted a resolution recommending that the City Council approve this ordinance Section 2. Findings. The following findings are adopted in support of the amended development agreements. A. Conformance with General Plan -The amended development agreements are consistent with the General Plan objectives, policies, land uses, and implementation programs and any other applicable specific plans. FACT: The commercial cannabis cultivation, manufacturing, distribution, delivery, and testing facilities are allowed uses in the Manufacturing (M) zoning district. In addition, a maximum of one (1) testing facility is allowed within the C-3 (Heavy Commercial) zone. 3 The projects comply with all commercial development standards for the M (Manufacturing) or the C-3 (Heavy Commercial)zoning district set forth in Chapter 25,Article 10,Article 25, and Article 30 of the zoning code, including but not limited to requirements for minimum lot area, maximum lot coverage, buildings setbacks, buildings height limits, landscaping, resource efficiency, lighting, parking performance standards, and signage. The General Plan encourages infill and intensification of land uses through the reuse or redevelopment of vacant or underutilized industrial, commercial, and residential sites. It also encourages the redevelopment and reuse of vacant and/or underutilized commercial buildings. The projects utilize commercially zoned or manufacturing zoned properties that are either vacant or under-utilized. The General Plan encourages development of commercial and industrial uses that are consistent with the scale and character of surrounding land uses. The projects will develop multiple cultivation, manufacturing, distribution, delivery, and testing facilities that are of the scale and intensity appropriate for a commercial or manufacturing development. The new development will consist of buildings that are of a size and height similar to adjacent and nearby buildings. The projects are consistent with General Plan policies that call for the recruitment of businesses, industries, and other employers whose operations are consistent with long-term economic development goals. The projects bring a new industry to the City that will provide new jobs to promote economic development and further the City's jobs to housing goals. It will also provide a significant source of revenue to the City that will enable the City to provide services and benefits to the community that it is not currently able to do because of budget limitations and insufficient revenues. B. The amended development agreements are in conformance with the public convenience and general welfare of persons residing in the immediate area and will not be detrimental or injurious to properties or persons in the general neighborhood or to the general welfare of the residents of the city as a whole. FACT: The construction of a steel security fence around the perimeter of all buildings where commercial cannabis is cultivated, manufactured, stored, processed, tested, distributed, and handled will provide increased security for the site and the materials and products stored, tested, cultivated, and manufactured, and distributed in the facilities. A video surveillance system will be installed to monitor all exterior areas of the properties, all site and buildings entrances and exits, and all interior spaces of the buildings, thereby providing additional security for the entire properties. The facilities will not be open to the general public and no direct sales or product distribution will be made to the general public at the facilities. 4 The amended development agreements include provisions for public outreach and education programs to promote the public welfare and operational and security plans to ensure the facility is operated in a safe and legal manner. C. The amended development agreements will promote the orderly development of property and the preservation of property values. FACT: The projects included in the amended development agreements are for infill development that will intensify land uses through the redevelopment of vacant and underutilized commercial sites. The commercial cannabis cultivation, manufacturing, distribution, delivery, and testing facilities are located in a commercial or manufacturing zoned district in proximity to other similar uses. D. All requirements of the California Environmental Quality Act have been met. FACT: If a project is subject to several discretionary approvals, for purposes of CEQA the"project" refers to the totality of the development project and not to each separate governmental approval(CEQA Guidelines section 15378). For purposes of the required CEQA discussion and analysis, the project under review includes the approval of amended development agreements. The projects (amended development agreements) are Categorically Exempt from California Environmental Quality Act (CEQA) requirements under provisions of CEQA Guidelines Section 15302 "Replacement or Reconstruction". This exemption (Class 2) consists of replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced. More specifically, Section 15302(b) applies to the replacement of commercial structures with a new commercial structural of substantially the same size, purpose, and capacity. In this case, the cannabis activities occur in areas zoned for manufacturing. The project sites are currently developed with manufacturing uses authorized pursuant to the zoning code or are vacant. In addition, most of the sites also qualify for the In-Fill exception (Class 32) pursuant to CEQA Guidelines Section 15332 "In-Fill Development Projects". This exemption applies to projects characterized as in-fill development meeting the conditions described in Section 15332. Section 3. That the amended development agreements with Aftercare Alliance Group, BECC Holdings, Broken Arrow Private Organization, Cali Med, Cali Premium Produce, COF Organic Farms, Inc., General Testing LLC, Green Fantasy Corp., Growerks LLC, JB Los Angeles Farmers, Lacturnus Research Association, Inc., Lynwood Canna Plex, Magnolia Extracts LLC, Natural Plant Extract of California, NMC Organization Incorporated, Norton Avenue Ventures, PGH LLC, Pure CA, and RD 5 Lynwood South are approved and adopted by the City Council substantially in the form of the agreements attached hereto. Section 4. If any section, subsection, sentence, clause or word of this Ordinance is for any reason held to be invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of this Ordinance. The City Council of the City of Lynwood HEREBY DECLARES that it would have passed and adopted this Ordinance and each and all provisions thereof, irrespective of the fact that any one or more of said provisions may be declared to be invalid. Section 5. Effective Date: This Ordinance shall take effect thirty(30)days after its adoption. Section 6. Adoption. The City Clerk shall certify to the adoption of this Ordinance and cause it to be published or posted according to law. Section 7. The City Clerk shall certify to the adoption of this Ordinance. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lynwood, California, this 16th day of April 2019. Jo Solache, Mayor ATTEST: l --- La.', / Ai !1 Sdof, aria Quinonez, Ci'' Cler APPROVED AS TO FORM APPROVED AT TO CONTENT lr .Ada Noel Tapia, City Attorfiey Jose eireteotl, City Manager 6 STATE OF CALIFORNIA ) ) § COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the above and foregoing resolution was duly adopted by the City Council of the City of Lynwood at a regular meeting held in the City Hall of said City on the 16th day of April 2019, and passed by the following vote: AYES: COUNCIL MEMBER CASANOVA, SANTANA, AND MAYOR SOLACHE NOES: COUNCIL MEMBER ALATORRE ABSENT: NONE ABSTAIN: NONE i aria Quinoneze, ay Clerk 41 7 ORDINANCE NO. 1565 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LYNWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AMENDING CERTAIN PROVISIONS OF TITLE 34 OF CHAPTER 4 OF THE LYNWOOD MUNICIPAL CODE WHEREAS, Ordinance No. 1688, "An Ordinance of the Lynwood City Council Adding Title 34 to Chapter 4 Licensing and Business Regulations of the Lynwood Municipal Code Relating to the Licensing and Regulation of Cannabis Cultivation and Manufacturing- Related Businesses in the City of Lynwood, and Consideration of the Planning Commission's Recommendation to Amend the Zoning Code to Allow Cultivation/Manufacturing Commercial Cannabis Activity in the Manufacturing Zone of the City", was adopted by the Lynwood City Council on December 20, 2016; and WHEREAS, it is the desire of the City of Lynwood City Council to amend certain provisions of Title 34 of Chapter 4 of the Municipal Code; and WHEREAS, it is the desire of the City of Lynwood City Council to abide by and be consistent with State law, as mandated by legislation concerning the use of medical and non-medical, adult use recreational marijuana, enacted from 1996 to the present. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES ORDAIN AS FOLLOWS: Section 1. Municipal Code Amendment. TITLE 34 4-34.1: Purpose A. The purpose of this article is to regulate all Commercial Cannabis Activity in the City of Lynwood, as defined in Section 26001 of the California Business and Professions Code, to the extent authorized by state law and in a manner designed to minimize negative impact on the City, and to promote the health, safety, morals, and general welfare of residents and businesses within the City. B. This article is further adopted, established, and amended pursuant to the specific authority granted to the City of Lynwood in Section 7 of Article XI of the California Constitution, Division 10 of the California Business and Professions Code, commencing with section 26000, other applicable provisions of State Law in the Health and Safety Code and elsewhere, and any and all regulations adopted by the Bureau of Cannabis Control as well as any state agency or department with jurisdiction over Cannabis. These laws and regulations shall govern all Commercial Cannabis Activity that occurs within the jurisdiction of the City. 4-34.2: Definitions Terms not defined herein shall have the same meanings set forth in the Medical and Adult Use Cannabis Regulation and Safety Act ("MAUCRSA") and any regulations promulgated pursuant thereto. In addition, the following terms shall be defined as follows: A. "Applicant" shall have the same meaning as in Section 26001(c) of the California Business and Professions Code. B. "Cannabis" shall have the same meaning as in Section 26001(f) of the California Business and Professions Code. C. "City" means the City of Lynwood, California. D. "City Manager" shall mean the City Manager of the City or a duly authorized designee.. E. "Code" means the Lynwood Municipal Code. F. "Commercial Cannabis" shall include medical as well as adult use cannabis. G. "Commercial Cannabis Activity" shall have the same meaning as in Section 26001(k) of the California Business and Professions Code. H. "Commercial Cannabis Business" means any Person engaged in Commercial Cannabis Activity. I. "Cultivation Site" shall have the same meaning as in Section 26001(m) of the California Business and Professions Code. J. "Delivery" shall have the same meaning as in section 26001(p) of the Business and Professions Code. K. "Distribution" shall have the same meaning as in section 26001(r) of the Business and Professions Code. L. "Distribution Site" shall mean any building, structure, premises, or location that is used to distribute Cannabis or Cannabis related products. M. "Enclosed Locked Structure," means a structure that: (1) does not allow for the visibility of the interior from the outside; (2) is secured with a lock; (3) is surrounded by a wall; and (4) is roofed. Enclosed Locked Structures may include accessory buildings. All Enclosed Locked Structures shall comply with the City building code, City fire code, and all other applicable laws. 2 N. "Good Cause" for purposes of refusing or denying an initial license under this chapter, for revoking a Permit, or for refusing or denying a Permit renewal or reinstatement, means: 1. The Applicant has not obtained approval by the City Council of a development agreement setting forth the general terms for the operation of a business under this Chapter or a Licensee breaches the terms of an applicable development agreement; 2. The Applicant or Licensee has violated any of the terms, conditions or provisions of this chapter, of state law, of any regulations and rules promulgated pursuant to state law, any applicable local rules and regulations, or any special terms or conditions placed upon its State License, Local License, or Permit; 3. The Licensed Premises have been operated in a manner that adversely affects the public health, safety or welfare or the safety of the immediate neighborhood in which the establishment is located; 4. The Applicant or Licensee has knowingly made false statements, misrepresentations or material omissions on an application form, renewal form, or any other document submitted to the City; 5. The Applicant or Licensee's criminal history does not indicate that the Applicant or Licensee is of Good Moral Character; or the Applicant or Licensee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made; except that, if the State Licensing Authority has issued a Local License to the Applicant or Licensee, the City shall not consider any criminal history of the Applicant or Licensee that was disclosed to or discovered by the State Licensing Authority prior to the issuance of the License and is confirmed by the Applicant. For any criminal history that was not disclosed to or discovered by the State Licensing Authority prior to the issuance of the License, or that arose after the issuance of the License, the City shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the Applicant or Licensee, and shall evaluate the suitability of the Applicant or Licensee to be issued a Permit based on the evidence found through the review. in determining which offenses are substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, the City shall consider the factors as set forth in Section 26057(b)(4) of the California Business and Professions Code; 6. The Applicant or Licensee is employing or allowing to volunteer any Person whose criminal history indicates that Person is not of Good Moral Character; 7. The Applicant or Licensee fails to allow inspection of the security recordings, activity logs, or business records of the Licensed Premises by City officials; or 8. An Owner of the Applicant or Licensee is a Physician providing Written Documentation to qualified patients for medical Cannabis. 9. The Applicant or Licensee has had a license application denied, or a license revoked or suspended by the State of California. 3 0. "Good Moral Character" means having a personal history that demonstrates the propensity to serve the public in the licensed area in a manner that reflects openness, honesty, fairness, and respect for the rights of others and for the law. In determining Good Moral Character, the following standards shall apply: 1. A judgment of guilt in a criminal prosecution or a judgment in a civil action shall not be used, in and of itself, as proof of an individual's lack of Good Moral Character. Such judgment may be used as evidence in the determination, and when so used the individual shall be notified and shall be permitted to rebut the evidence by showing that at the current time he or she has the ability to, and is likely to serve the public in a fair, honest and open manner, that he or she is rehabilitated, or that the substance of the former offense is not substantially related to the occupation or profession for which he or she seeks to be licensed. 2. Notwithstanding Chapter 2 of Division 1.5 of the California Business and Professions Code, a prior conviction where the sentence, including any term of probation, incarceration, or supervised release is completed for possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance, is not considered substantially related, and shall not be the sole ground for denial of a Local License, except that any of the following convictions shall be deemed substantially related and may be the sole grounds for denying a Local License or Permit: a. A felony conviction for hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance; or b. A felony conviction for selling, offering to sell,furnishing, offering to furnish, administering, or giving any controlled substance to a minor; or c. A felony conviction for drug trafficking with enhancements pursuant to Section 11370.4 or 11379.8 of the California Health and Safety Code. d. Conviction for any controlled substance felony subsequent to issuance of a Permit shall be grounds for revocation of a Permit or denial of the renewal of a Permit. P. "Licensed Premises" means the premises, consisting of a single or immediately adjoining parcel(s) as identified by valid street address and Assessor Parcel Number, specified in an application for a Permit under this chapter, which are owned or in possession of the Applicant or Licensee and within which the Applicant or Licensee is applying for authorization to cultivate, manufacture, distribute, test, or is applying for multiple permitted uses within the same premises, in accordance with the provisions of this chapter, the MAUCRSA, any development agreement approved by the City Council, and any rules adopted pursuant thereto, except that no storefront dispensary, as specified in Section 25-200-1 of the Lynwood Municipal Code, and no Cannabis retail sales, other than Delivery, shall be permitted within the City. Q. "Licensee" means a Person who holds a Cannabis Permit issued pursuant to this chapter for one Licensed Premises. 4 i R. "Limited Access Area" means a building, room or other area that is part of the Licensed Premises where medical or adult use Cannabis is grown, cultivated, stored, weighed, displayed, packaged, or sold to other medical or adult use Cannabis businesses, under control of the Licensee, with limited access to only authorized personnel. S. "Local License" means a business license granted by the City, pursuant to Chapter 4 of this code. T. "Manufacturing Site" shall mean any building, structure, premises, or location that is used to manufacture Cannabis or Cannabis related products. U. "Medical Cannabis"shall have the same meaning as the term "medicinal cannabis," as defined in Section 26001(ai) of the California Business and Professions Code. V. "Medical and Adult Use Cannabis Regulation and Safety Act" or "MAUCRSA" means Division 10 of the California Business and Professions Code, including any future amendments. W. "Outdoors"means any location within the City that is not within an Enclosed Locked Structure. X. "Owner" shall have the same meaning as in Section 26001(al) of the California Business and Professions Code. Y. "Person" shall have the same meaning as in Section 26001(an) of the California Business and Professions Code. Z. "Permit" means authorization to conduct Commercial Cannabis Activity pursuant to this chapter, State law, and upon the issuance of an occupancy permit and business license by the City. AA. "Physician" shall mean an individual who possesses a license in good standing to practice medicine or osteopathy from the State of California. BB. "State Law(s)" shall mean and include California Health and Safety Code Section 11362.5 (Compassionate Use Act of 1996); California Health and Safety Code Sections 11362.7 to 11362.83 (Medical Marijuana Program Act); the California Attorney General's Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use issued in August, 2008, as such guidelines may be revised from time to time by action of the Attorney General; MAUCRSA, and all other applicable laws and regulations of the state of California. CC. "State License" shall have the same meaning as in Section 26001(a), (y), and (ae) of the California Business and Professions Code. 5 DD. "State Licensing Authority"shall mean the Bureau of Cannabis Control within the Department of Consumer Affairs, the Department of Public Health, or any other state agency responsible for the issuance, renewal, or reinstatement of a License issued pursuant to Division 10 of the California Business and Professions Code or any state agency authorized to take disciplinary action against such License. EE. "Testing laboratory" shall have the same meaning as in Section 26001(at) of the California Business and Professional Code. FF. "Written Documentation" shall have the meaning as in Section 11362.7(i) of the California Health and Safety Code. GG. "Youth Center"means any facility that is operated by a public agency or non- profit entity with the sole purpose of providing educational and/or recreational services to minors. 4-34.3: Relationship to other laws. Except as otherwise specifically provided herein, this title incorporates the requirements and procedures set forth in Division 10 of the California Business and Professions Code, starting with section 26000, as such division may be amended in the future. In the event of any conflict between the provisions of this title and the provisions of Division 10 of the Business and Professions Code or any other applicable state law or the Lynwood Municipal Code, the more restrictive provision shall govern. 4-34.4: Permitted Use A. Commercial Cannabis Businesses shall only be permitted to operate in the City following application, investigation, verification, approval and issuance of development agreement approved by the City Council and a business license issued by the City in accordance with the criteria and procedures set forth in Chapter 4 of this code and in compliance with the Lynwood Municipal Code. No land use entitlement, permit (including building permit) approval, site plan, certificate of occupancy, zoning clearance, or other land use authorization for a Commercial Cannabis Business shall be granted or permitted unless it complies with the provisions of this chapter and the applicable building standards and the Lynwood Municipal Code. If there is a conflict between the requirements of another chapter and this chapter, the requirements of this Title 4-34 shall prevail. B. All Persons who are engaged in or who are attempting to engage in Commercial Cannabis Activity in any form shall do so only in strict compliance with the terms, conditions, limitations and restrictions of the MAUCRSA, the provisions of this Title 4-34, and all other applicable state and local laws and regulations. 6 C. The City Manager is authorized to make policies and procedures consistent with the intent and spirit of this chapter concerning the applications, the application process, the information required of Applicants, the application procedures and the administration and procedures to be used and followed in the application and hearing process. 4-34.5: Development agreement. Prior to operating in the City and as a condition of issuance of a Permit, the Applicant shall enter into a development agreement with the City setting forth the terms and conditions under which the facility will operate that is in addition to the requirements of this chapter, including, but not limited to, public outreach and education, community service, payment of fees and other charges as mutually agreed upon, approval of architectural plans (including site plan, floor plan, and elevation, to conform with manufacturing uses under the Lynwood Municipal Code), and such other terms and conditions that will protect and promote the public health, safety, and welfare of all Persons in the City. The development agreement shall have a term of ten years and shall be valid for those ten years as long as the Licensee complies with the terms and conditions set forth therein and the provisions of this chapter and Code, and all applicable State Laws. 4-34.6: Permitted zones— Distance and other conditions for approval. Licensed Premises of any license classification type, as specified in Business and Professions Code section 26050 (except Cannabis retail storefronts), and in this chapter, may be allowed, maintained, or operated in the City. If there is a conflict between the requirements of this chapter and any other chapter, the requirements of this chapter shall prevail. A. Manufacturing Site. I. No Manufacturing Site shall be located within six hundred feet of a school, day-care center, or Youth Center, in conformance with state law, or within fifty feet of a residential zone. 2. Subject to the distance and other requirements of this title and the Code, a Manufacturing Site may only be located on a property within the M (Manufacturing) zone, and only after the application for and granting of a development agreement by the City Council and a business permit in accordance with this title. The proposed use will comply with the minimum requirements set forth in this title for distance separations between Manufacturing Sites and other specific land uses. 3. All manufacturing of commercial Cannabis shall occur in an Enclosed Locked Structure.All manufacturing of Cannabis Outdoors within the City is prohibited. 4. Manufacturing Sites shall not exceed the square footage authorized pursuant to the controlling development agreement. 5. From a public right-of-way, there should be no exterior evidence of the manufacture of commercial Cannabis of any type or kind, except for any signage authorized by this Code. 7 6. All Manufacturing Sites shall comply with the City's lighting standards including, without limitation,fixture type, wattage, illumination levels, shielding, and secure the necessary approvals and permits as needed. 7. All windows on the Licensed Premises of the Manufacturing Site shall be appropriately secured and all commercial Cannabis securely stored. 8. A Manufacturing Site, all operations conducted therein, and all equipment used must be in compliance with all applicable state and local laws, including all building, electrical, and fire codes. 9. If hazardous materials, flammable gas, flammable liquefied gas, flammable and combustible liquids, or other flammable material, as those terms are defined in CFC Section 202, are to be used in the processing of commercial Cannabis, then the provisions of CFC Section 407 shall be applicable where hazardous materials subject to permits under CFC Section 50 (Hazardous Materials) are located on the Licensed Premises or where required by the fire department official. 10. Storage, use and handling of compressed gases in compressed gas containers, cylinders, tanks and systems shall comply with CFC Chapter 53. Partially full compressed gas containers, cylinders or tanks containing residual gases shall be considered as full for the purposes of the controls required. Compressed gases classified as hazardous materials shall also comply with CFC Chapter 50 for general requirements and CFC Chapter 53 addressing specific hazards, including CFC Chapter 58(Flammable Gases), CFC Chapter 60 (Highly Toxic and Toxic Materials), CFC Chapter 63 (Oxidizers, Oxidizing Gases and Oxidizing Cryogenic Fluids) and CFC Chapter 64 (Pyrophoric Materials). Prevention, control and mitigation of dangerous conditions related to storage, use, dispensing, mixing and handling of flammable and combustible liquids shall be in accordance with CFC Chapters 50 and 57. 11. Manufacturing Sites are a Group F-1 (Factory Industrial Moderate-Hazard) Occupancy under the Fire Code. All new construction is required to be fire sprinkled per the Fire Code. For Manufacturing Sites that will be sited in an existing structure, an automatic sprinkler system shall be provided throughout all buildings containing a Group F-I occupancy where one of the following conditions exists: a. A Group F-1 fire area exceeds twelve thousand square feet. b. A Group F-1 fire area is located more than three stories above grade plane. c. The combined area of all Group F-1 fire areas on all floors, including any mezzanines, exceeds twenty-four thousand square feet. B. Cultivation Sites. 1. No Cultivation Site shall be located within six hundred feet of a school, day- care center, park, or Youth Center, in conformance with state law, or within fifty feet of a residential zone. 2. Subject to the distance and other requirements of this chapter and the Code, a Cultivation Site may only be located on a property within the M (Manufacturing) zone, and only after the application for and granting of a 8 development agreement by the City Council and a business permit in accordance with this chapter. The proposed use will comply with the minimum requirements set forth in this chapter for distance separations between Manufacturing Sites and other specific land uses. 3. All cultivation of commercial Cannabis shall occur in an Enclosed Locked Structure. All cultivation of Cannabis Outdoors within the City is prohibited. . 4. Cultivation Sites shall not exceed the square footage authorized pursuant to the Permit. 5. From a public right-of-way, there should be no exterior evidence of the cultivation of commercial Cannabis except for any signage authorized by this chapter. 6. All Cultivation Sites shall comply with the City's lighting standards including, without limitation, fixture type, wattage, illumination levels, shielding, and secure the necessary approvals and permits as needed. 7. All windows on the Licensed Premises of the Cultivation Sites shall be appropriately secured and all commercial Cannabis securely stored. 8. Areas where commercial Cannabis is cultivated are wet locations, and the electrical system in such areas must comply with Title 11-8 of this code,Article 300.6(D) of the National Electric Code, City and California building codes, fire codes, electrical codes and all other applicable laws. 9. Cultivation Sites are a Group F-1 (Factory Industrial Moderate-Hazard) Occupancy under the Fire Code. All new construction is required to be fire sprinkled per the Fire Code. For Cultivation Sites that will be sited in an existing structure, an automatic sprinkler system shall be provided throughout all buildings containing a Group F-1 occupancy where one of the following conditions exists: a. A Group F-1 fire area exceeds twelve thousand square feet. b. A Group F-1 fire area is located more than three stories above grade plane. c. The combined area of all Group F-1 fire areas on all floors, including any mezzanines, exceeds twenty-four thousand square feet. C. Distribution Sites. 1. No Distribution Site shall be located within six hundred feet of a school, day- care center, or Youth Center, in conformance with state law, or within fifty feet of a residential zone. 2. Subject to the distance and other requirements of this title and the Code, a Distribution Site may only be located on a property within the M (Manufacturing) zone, and only after the application for and granting of a development agreement by the City Council and a business permit in accordance with this title. The proposed use will comply with the minimum requirements set forth in this title for distance separations between Manufacturing Sites and other specific land uses. 3. All storage, handling, and packaging of commercial Cannabis for distribution shall occur in an Enclosed Locked Structure. All storage, handling, and packaging of Cannabis Outdoors within the City is prohibited. 9 4. Distribution Sites shall not exceed the square footage authorized pursuant to the controlling development agreement. 5. From a public right-of-way, there should be no exterior evidence of the storage, handling, or packaging of commercial Cannabis of any type or kind, except for any signage authorized by this Code. 6. All Distribution Sites shall comply with the City's lighting standards including, without limitation, fixture type, wattage, illumination levels, shielding, and secure the necessary approvals and permits as needed. 7. All windows on the Licensed Premises of the Distribution Site shall be . appropriately secured and all commercial Cannabis securely stored. 8. A Distribution Site, all operations conducted therein, and all equipment used must be in compliance with all applicable state and local laws, including all building, electrical, and fire codes. 9. No Distribution company will carry or move Cannabis within the City without complying with State Law. D. Testing Sites. 1. No Testing Site shall be located within six hundred feet of a school, day-care center, or Youth Center, in conformance with state law. 2. Subject to the distance and other requirements of this title and the Code, a Testing Site may be located on a property within the M (Manufacturing) zone or within the C-3 Heavy Commercial zone (which is limited to a maximum of one facility within the C-3 zone), and only after the application for and granting of a development agreement by the City Council and a business permit in accordance with this title. The proposed use will comply with the minimum requirements set forth in this title for distance separations between Testing Sites and other specific land uses. 3. All storage, handling, and packaging of commercial Cannabis for Testing shall occur in an Enclosed Locked Structure. All storage, handling, and packaging of Cannabis Outdoors within the City is prohibited. 4. From a public right-of-way, there should be no exterior evidence of the storage, handling, or packaging of commercial Cannabis of any type or kind, except for any signage authorized by this Code. 5. All Testing Sites shall comply with the City's lighting standards including, without limitation, fixture type, wattage, illumination levels, shielding, and secure the necessary approvals and permits as needed. 6. All windows on the Licensed Premises of the Testing Site shall be appropriately secured and all commercial Cannabis securely stored. 7. A Testing Site, all operations conducted therein, and all equipment used must be in compliance with all applicable state and local laws, including all building, electrical, and fire codes. 8. No Testing company will carry or move Cannabis within the City without complying with State Law. 10 E. Delivery. 1. If it is permitted under state law, a Person may operate a Cannabis non- storefront Delivery service if the Person obtains a Permit from the City for such activity. 2. The activity must be conducted as a Cannabis Delivery-only service, consistent with state law and regulations, and it can only be conducted from a Licensed Premises in the City of Lynwood. 3. No in-person sales shall be permitted at any Licensed Premises, and no Licensed Premises shall be open to the public. 4. A Permit to conduct a Cannabis Delivery service will be subject to reasonable conditions, including but not limited to the types of vehicles that may be used for deliveries, the qualifications of drivers, and limits on the amount of Cannabis products that an individual may purchase. 5. This section creates no vested right to engage in any such activity or business. 6. This activity shall not be considered a dispensary. 7. This is intended as an exceptional measure, notwithstanding any other provision of the Lynwood Municipal Code, to ensure the City's residents have safe and reliable access to Cannabis products. 8. No Cannabis Delivery Site shall be located within six hundred feet of a school, day-care center, or Youth Center, in conformance with state law, or within fifty feet of a residential zone. 9. Subject to the distance and other requirements of this title and the Code, a Cannabis Delivery Site may only be located on a property within the M (Manufacturing) zone, and only after the application for and granting of a development agreement by the City Council and a business permit in accordance with this title. The proposed use will comply with the minimum requirements set forth in this title for distance separations between Manufacturing Sites and other specific land uses. F. Additional Uses. In addition to a cultivation, manufacturing, or distribution Permit, a Commercial Cannabis Business Applicant may apply for another use as permitted by MAUCRSA, a development agreement approved by City Council, and any rules adopted pursuant thereto, as long as the requested use does not violate any provision in State Law, Ordinance No. 1632, Section 25-200-1, Chapter 25 Appendix A of the Lynwood Zoning Code, or the limitations in this Title 4-34, except that no Person may have a testing Permit if that Person has any other kind of Permit. G. Nonconforming Use. Any dispensary of medical or adult use Cannabis, or Cannabis retail storefronts established or operating in the City in violation of this title or the ban established by Ordinance No. 1632, Section 25-200-1, and Chapter 25 Appendix A of the Lynwood Zoning Code, shall not be considered a lawful or permitted nonconforming use, and no such Commercial Cannabis Business shall be eligible for issuance of a Cannabis Permit. Further, any such unlawfully established Commercial Cannabis 11 Business shall constitute a public nuisance subject to abatement by the City, pursuant to Title 13 of Chapter 3. H. Distances. All distances specified in this section shall be measured in the following manner: 1. For schools, day-care centers, parks, or Youth Centers, the distance shall be measured in a straight line from the subject property line to the closest property line of the lot on which the Cannabis business is to be located without regard to intervening structures. 2. From residential zones, the distance shall be measured to the nearest point of the parcel or property in a residential zone to the closest property line of the lot on which the Cannabis business is to be located without regard to intervening structures. 4-34.7: Transfer or Change in Ownership or Location. A. Transfer or Change of Ownership 1. Transfer by Owner of Minority Interest. Any Owner of a Commercial Cannabis Business may sell, transfer, pledge, assign, grant an option, or otherwise dispose ("Transfer") of his or her ownership interest in the Commercial Cannabis Business covered by any Permit issued under this chapter upon written notice to the City Manager so long as: (i) after giving effect to such Transfer, the transferee of such interest and any affiliates of such transferee own less than twenty percent (20%) of such Commercial Cannabis Business ("Minority Interest"); (ii) after giving effect to such Transfer, the transferee of such interest and any affiliates of such transferee do not participate in the direction, control, or management of the Licensee, subject to transferee having an approval right over major decisions; and (iii) after giving effect to such Transfer, the Persons owning such Commercial Cannabis Business as of the then most recent Transfer approved by the City Manager or the City Council will continue to own more than fifty percent (50%) of such Commercial Cannabis Business and will continue to control the management and operation of the Licensee, subject to other Owners having an approval right over major decisions. 2. Transfer by Owner of Non-Minority Interest. Any Owner of a Commercial Cannabis Business may Transfer between twenty point zero one percent (20.01%) and one hundred percent (100%) his or her ownership interest in the Commercial Cannabis Business covered by any Permit issued under this chapter by filing an application to Transfer the ownership and obtaining the approval of the City Manager to such Transfer. 3. Transfer by Licensee to a New Entity. A Licensee may Transfer his or her Commercial Cannabis Business Permit issued under this chapter to a Person not named in the required development agreement by filing an application to 12 Transfer the ownership and obtaining the approval of the City Manager to such Transfer. 4. Transfers under subsections (b)and (c) above shall be subject to the following procedure. An application for approval of a Transfer shall be submitted to the City Manager, who shall review it and all supporting documents for completeness. The City Manager, within 30 days of receipt of a complete application, shall either approve or deny the application. The City Manager's decision shall be subject to appeal pursuant to section 4-34.15, below. B. Persons permitted pursuant to the provisions of this chapter or those making application for such Permits, must demonstrate proof of lawful possession of the location. Evidence of lawful possession consists of properly executed deeds, leases, or other written documents. C. The location shall only be the geographical area that is specifically and accurately described in executed documents verifying lawful possession. No Licensee is authorized to relocate to other areas or units within a building structure, and no Licensee shall add additional contiguous units or areas, thereby altering the initially approved premises, without filing an application to modify the location, including any applicable processing fee, and obtaining the approval of the City Manager. D. Subletting Not Authorized. No Licensee is authorized to sublet any portion of any Licensed Premises for any purpose, unless all necessary forms and application to modify the existing location to accomplish any subletting have been approved by the City Manager. 4-34.8: Changing, Altering, or Modifying Location. A. Application Required to Alter or Modify Licensed Premises. After issuance of a Permit, the Licensee shall not make any physical change, alteration, or modification of the Licensed Premises that materially or substantially alters the location,production estimates, or the usage of the location from the plans originally approved with the development agreement, without the prior written approval of the City Manager or his designee. The Licensee whose premises are to be materially or substantially changed is responsible for filing an application for approval on current forms provided by the City Manager. B. What Constitutes a Material Change. Material or substantial changes, alterations, or modifications requiring approval include, but are not limited to, the following: 1. Any increase or decrease in the total physical size or capacity of the location; 2. The sealing off, creation of or relocation of a common entryway, doorway, passage or other such means of public ingress and/or egress, when such common entryway, doorway or passage alters or changes Limited Access Areas, such as the cultivation, harvesting, manufacturing, or sale of commercial Cannabis or Cannabis-infused product within the Licensed Premises; or 13 3. The installation or replacement of electric fixtures or equipment, the lowering of a ceiling, or electrical modifications made for the purpose of increasing power usage to enhance cultivation activities. C. Application. The City Council or its designee may grant approval for the types of changes, alterations, or modifications described herein upon the filing of an application by the Licensee, and payment of any applicable fee.The Licensee must submit all information requested by the City Council or its designee including but not limited to, documents that verify the following: 1. The Licensee will continue to have exclusive possession of the premises, as changed, by ownership, lease, or rental agreement, and sole control of all production; and 2. The proposed change conforms to any and all City restrictions related to the time, manner, and place of regulation of the Commercial Cannabis Activity. 4-34.9: Grounds for Denial of Permit—Additional conditions imposed. A. The City Manager may reject an application upon making any of the following findings: 1. The Applicant made one or more false or misleading statements or omissions on the registration application or during the application process; 2. The Applicant's business entity, if applicable, is not properly organized in strict compliance pursuant to the applicable law, rules and regulations; 3. The Applicant fails to meet the requirements of this chapter or any regulation adopted pursuant to this chapter; 4. The Applicant's facility or its location is in violation of any building, zoning, health, safety, or other provision of this Code, or of any state or local law which substantially affects the public health, welfare, safety, or morals, or the facility or its location is not permitted in the proposed area, or the issuing or continuation of a Permit would be contrary to the public health, welfare, safety, or morals; 5. The Applicant, or any of its officers, directors, Owners, managers, or employees is under twenty-one (21) years of age; 6. The Applicant, or any of its officers, directors, or Owners, or any Person who is managing or is otherwise responsible for the activities of the Licensed Premises, or any employee who participates in the cultivation, processing, manufacturing, Distribution, Delivery, or transporting of Cannabis or who participates in the daily operations of the commercial Cannabis facility, has been convicted of a violent felony, a felony or misdemeanor involving fraud, deceit, embezzlement, or moral turpitude, or the illegal use, possession, transportation, Distribution or similar activities related to controlled substances, as defined in the Federal Controlled Substances Act, with the exception of Medical Cannabis related offenses for which the conviction occurred after the passage of the Compassionate Use Act of 1996; 14 7. The Applicant, or any of its officers, directors, Owners, or managers, is a Physician making patient recommendations for Medical Cannabis; 8. The Applicant, or any of its officers, directors, Owners, or managers has been sanctioned by the City, the state of California, or any county for unregistered Medical Cannabis activities or has had a registration revoked under this chapter in the previous three (3) years; 9. The Applicant did not pay to the City the required application and processing fees; 10. The Applicant has had a license application denied, or a license revoked or suspended by the State of California; 11. Good Cause exists to reject the application, as defined in this chapter; or 12. Applicant's application does not reflect the purpose of this chapter, to promote the health, safety, morals, and general welfare of residents and businesses within the City. 4-34.10: Security. A. General Security Requirements 1. Security cameras shall be installed and maintained in good working condition and used in an on-going manner with at least 240 continuous hours of digitally recorded documentation in a format approved by the City Manager. The cameras shall be in use 24 hours per day, 7 days per week. The areas to be covered by the security cameras include, but are not limited to, the storage areas, manufacturing or cultivation areas, all doors and windows, and any other areas as determined by the City Manager. 2. The lease/business space shall be alarmed with a reliable, commercial alarm system that is operated and monitored by a security company or alarm business that is operating in full compliance with Title 3-1 of this Code. 3. Entrance to any storage areas shall be locked at all times, and under the control of Licensee's staff. 4. The business entrance(s) and all window areas shall be illuminated during evening hours. The Applicant shall comply with the City's lighting standards regarding fixture type, wattage, illumination levels, shielding, etc., and secure the necessary approvals and permits as needed. 5. Ail windows on the Licensee's building shall be appropriately secured and all product securely stored. 6. Each Licensee shall implement a system to track the cultivation and manufacturing of Cannabis in order to prevent the Licensee from diverting or transporting Cannabis to any location not authorized by State Laws and any local law or regulation. 7. All waste and disposal containers shall be locked at all times and stored in a secure area, and under the control of Licensee's staff. 15 B. Security Alarm Systems— Minimum Requirements 1. Each Licensed Premises shall have a Security Alarm System, installed by a licensed alarm company, on all perimeter entry points and perimeter windows. 2. Each Licensed Premises must ensure that its location is continuously monitored. Licensed Premises may engage the services of an outside vendor to fulfill this requirement. 3. The Licensed Premises shall maintain up to date and current records and existing contracts on the premises that describe the location and operation of each security alarm system, a schematic of security zones, the name of the licensed alarm company, and the name of any vendor monitoring the premises. 4. Upon request, each Licensed Premises shall make available to the City Manager or any state or local law enforcement agency, for a purpose authorized by this chapter or any state or local law enforcement purpose, all information related to security alarm systems, recordings, monitoring, and alarm activity. C. Lock Standards — Minimum Requirement. At all points of ingress and egress, the Licensee shall ensure the use of commercial-grade, nonresidential door locks. D. Video surveillance requirements: 1. Prior to exercising the privileges of a Permit under this chapter, an Applicant must install fully operational video surveillance and camera recording system. The recording system must record in digital format and meet the requirements outlined in this Section. 2. All video surveillance records and recordings must be stored in a secure area that is only accessible to the management staff of Licensed Premises. 3. Video surveillance records and recordings must be made available upon request to the City Manager or any other state or local law enforcement agency for a purpose authorized by this chapter or for any other state or local law enforcement purpose. 4. Video surveillance records shall be held in confidence by all employees and representatives of the City Manager, except that the City Manager may provide such records and recordings to any other state or local law enforcement agency for a purpose authorized by this Chapter or for any other state or local law enforcement purpose. 5. A sign shall be posted in a conspicuous place near each point of public access which shall be not less than 12 inches wide and 12 inches long, composed of letters not less than one inch in height, stating "All Activities Monitored by Video Camera" or "These Premises Are Being Digitally Recorded" or otherwise advising all Persons entering the Licensed Premises that a video surveillance and camera recording system is in operation at the MCCC and recording all activity as provided in this Section. 16 6. The Licensed Premises should use video surveillance equipment and a camera system that can be accessed remotely by local law enforcement and the City, as specified in each development agreement. E. Video Surveillance Equipment 1. Video surveillance equipment shall, at a minimum, consist of digital or network video recorders, cameras capable of meeting the recording requirements described in this rule, video monitors, digital archiving devices, and a color printer capable of delivering still photos. 2. All video surveillance systems must be equipped with a failure notification system that provides prompt notification to the Licensed Premises of any prolonged surveillance interruption and/or the complete failure of the surveillance system. 3. Licensed Premises are responsible for ensuring that all surveillance equipment is properly functioning and maintained so that the playback quality is suitable for viewing and the surveillance equipment is capturing the identity of all individuals and activities in the monitored areas. 4. All video surveillance equipment shall have sufficient battery backup to support a minimum of four hours of recording in the event of a power outage. F. Placement of Cameras and Required Camera Coverage 1. Camera placement shall be capable of identifying activity occurring within 20 feet of all points of ingress and egress and shall allow for the clear and certain identification of any individual and activities on the Licensed Premises. 2. All entrances and exits to the facility shall be recorded from both indoor and outdoor vantage points. 3. The system shall be capable of recording all pre-determined surveillance areas in any lighting conditions. If the Licensed Premises has a commercial Cannabis cultivation area, a rotating schedule of lighted conditions and zero- illumination can occur as long as ingress and egress points to those areas remain constantly illuminated for recording purposes. 4. Areas where commercial Cannabis is grown, tested, cured, manufactured, or stored shall have camera placement in the room facing the primary entry door at a height, which will provide a clear unobstructed view of activity without sight blockage from lighting hoods, fixtures, or other equipment. 5. Cameras shall also be placed at each location where weighing, packaging, transport, preparation, or tagging activities occur. 6. At least one camera must be dedicated to record the access points to the secured surveillance recording area. 7. All outdoor cultivation areas must meet the same video surveillance requirements applicable to any other indoor Limited Access Areas. 17 G. Location and Maintenance of Surveillance Equipment 1. Surveillance recording equipment must be housed in a designated, locked and secured room or other enclosure with access limited to authorized employees, agents of the City Manager, state or local law enforcement agencies for a purpose authorized by this chapter or for any other state or local law enforcement purpose, .and service personnel or contractors. 2. Licensed Premises must keep a current list of all authorized employees and service Personnel who have access to the surveillance system and/or room on the Licensed Premises. Licensed Premises must keep a surveillance equipment maintenance activity log on the Licensed Premises to record all service activity including the identity of the individual(s)performing the service, the service date and time and the reason for service to the surveillance system. 3. Off-site monitoring and video recording storage of the Licensed Premises or an independent third-party is authorized as long as standards exercised at the remote location meets or exceeds all standards for on-site monitoring. 4. Each Licensed Premises located in a common or shared building must have a .separate surveillance room/area that is dedicated to that specific Licensed Premises. The facility that does not house the central surveillance room is required to have a review station, printer, and map of camera placement on the premises.All minimum requirements for equipment and security standards as set forth in the section apply to the review station. H. Video Recording and Retention Requirements 1. All camera views of all recorded areas must be continuously recorded 24 hours a day. 2. All surveillance recordings must be kept for a minimum of 30 days and be in a format that can be easily accessed for viewing. Video recordings must be archived in a format that ensures authentication of the recording as legitimately captured video and guarantees that no alteration of the recorded image has taken place. 3. The surveillance system or equipment must have the capabilities to produce a color still photograph from any camera image, live or recorded, of the Licensed Premises. 4. The date and time must be embedded on all surveillance recordings without significantly obscuring the picture. 5. Time is to be measured in accordance with the official United States time established by the National Institute of Standards and Technology and the U.S. Naval Observatory at: http://www.time.gov/timezone.cgi?Mountain/d/- 7/Java_ 6. After the 30-day surveillance video retention schedule has lapsed, surveillance video recordings must be erased or destroyed prior to being discarded or disposed of for any other purpose. Surveillance video recordings may not be destroyed if the Licensed Premises knows or should have known 18 of a pending criminal, civil, or administrative investigation or any other proceeding for which the recording may contain relevant information. 1. Other Records — All records applicable to the surveillance system and Cannabis tracking system shall be maintained on the Licensed Premises. At a minimum, Licensed Premises shall maintain a map of the camera locations, direction of coverage, camera numbers, surveillance equipment maintenance activity log, user authorization list and operating instructions for the surveillance equipment. 4-34.11: Fees and charges A. Prior to operating in the City, the operator of each Licensed Premises shall timely and fully pay all fees associated with the establishment of that business. The fees shall be as set forth in the schedule of fees and charges established by resolution of the City Council, including, but not limited to, the following: 1. Application fee of twenty-five thousand dollars ($25,000.00) for accepting an application; due and payable in full at the time an application is submitted; this fee shall cover legal fees incurred by the City to prepare a development agreement as well as staff time and costs to review, investigate, and evaluate the application. 2. Permit issuance fee of twenty thousand dollars ($20,000.00)for the cost to the City of preparing the necessary staff reports and hold the necessary hearings consistent with the development agreement statutes, City Council review and approval of the development agreement and the Permit, and preparation and issuance of the Permit as authorized by the City Council, due and payable in full at the time the City issues a Permit. 3. Amended application fee of seven thousand five hundred dollars ($7,500.00) for the cost to the City of reviewing amendments or changes to the application form previously filed on behalf of the Licensed Premises (such as a change of ownership); due and payable in full at the time amendments or changes to any Permit form is submitted to the City. 4. Fee of fifteen thousand dollars ($15,000.00) for the cost to the City of reviewing an application for a change of location of a Licensed Premises, including the cost of staff time to review, investigate, and evaluate the application, inspect the existing premises and the proposed premises, and prepare staff reports, and to hold the necessary hearings before the Planning Commission and the City Council. 5. Fee of fifteen thousand dollars ($15,000.00) for the cost to the City of reviewing an application for a change of a Licensee for a Commercial Cannabis Business, including the cost of staff time to review, investigate, and evaluate the application. 6. Annual fee of$10.00 per square foot of cultivation area (canopy). 7. The higher of the following: an annual fee of two percent (2.0%) of gross income from manufacturing activities; or a sum that shall be set at twenty thousand dollars ($20,000) during the first year of operations and shall rise in 19 increments of twenty thousand dollars each succeeding year until it reaches the maximum of one hundred forty thousand dollars ($140,000.00). 8. Annual fee of one and one-half percent (1.5%) of gross income from Distribution/transportation of product for anyone other than Owner. 9. Annual fee of two and one-half percent (2.5%) of gross income from Delivery activities. 10. Fee of eight one-hundredths of one percent (0.08%) on all revenues from manufacturing, distribution, and delivery activities, payable to the City on a quarterly basis, to reimburse the City for the cost of the electronic revenue tracking and merchant verification system known as "Veritil", or any similar system that the City may approve. 11. The Cost Recovery Fee set forth in the applicable development agreement. 12. All standard fees and charges, including but not limited to plan review fees, permit fees, encroachment permit fees, and pass-through fees and charges from other agencies. 4-34.12: Revenue tracking software Each Licensee will employ the electronic revenue tracking and merchant verification system known as "Veritil", or any similar system approved by the City for all point of donation/sales tracking from seed or inception to product distribution to other licensed commercial Cannabis facilities or Delivery to individual customers or otherwise in compliance with state and local law. Such approved system will track in real time all of Licensee's sales transactions involving commercial Cannabis products and will have the capacity to produce historical transactional data in accordance with the City's requirements. 4-34.13: Limitations on City's liability A. To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to approving any Permit pursuant to this chapter or the operation of any commercial Cannabis facility approved pursuant to this chapter. B. As a condition of approval of a Permit as provided in this title, 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 facility or the prosecution of the commercial Cannabis facility or its Owners, managers, directors, officers, employees, or its qualified patients or primary caregivers for violation of federal or State Laws; 2. Maintain insurance in the amounts and of the types that are acceptable to the City Manager; 3. Name the City as an additional 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 Permit; and 20 5. Agree to 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 the City's approval of a 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. 4-34.14. Inspections A. The City Manager, law enforcement, or their designees shall have the right to enter all Licensed Premises from time to time unannounced during the facility's hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this chapter,to inspect and copy records required to be maintained under this chapter, or to inspect, view, and copy recordings made by security cameras, all without requirement for a search warrant, subpoena, or court order, and subject to appropriate fees as specified in the development agreement or in this Code. B. Operation of a Licensed Premises in noncompliance with any conditions of approval or the provisions of this chapter shall constitute a violation of this Code and shall be enforced pursuant to the provisions of this Code. C. The City Manager may summarily suspend or revoke a Permit, or disqualify an Applicant from the registration process, or elect not to renew a Permit if any of the following, singularly or in combination, occur: 1. The City Manager determines that the Cannabis Licensee has failed to comply with any requirement of this chapter or any condition of approval or a circumstance or situation has been created that would have permitted the City Manager to deny the Permit under this chapter or elect not to renew or revoke the Permit under this chapter; 2. The Licensee or Applicant has conducted itself or is being conducted in a manner that creates or results in a public nuisance; 3. The Licensee ceases operations for more than 90 calendar days, including during change of ownership proceedings; 4. Ownership is changed without the new Owner(s) applying for and securing a new Permit under this chapter, consistent with section 4-34-7; 5. The Licensed Premises relocates to a different location or premises; and 6. The Licensee fails to allow inspection and/or copying of the security recordings, the activity logs and records required under this chapter, or the premises by authorized City officials. D. Abatement. The City shall initiate abatement proceedings as authorized by this Code if necessary to correct any violation of this chapter, Code, or State Laws. E. Violation deemed misdemeanor—penalty. Any Person violating any of the provisions of this chapter or any applicable rule in this chapter or Code, shall be guilty of a misdemeanor, and upon conviction thereof shall be punishable by the maximum penalties provided for in Section 19 of the Penal Code. 21 4-34.15: Testing A. Testing Rules and Regulations.The City Manager is authorized to formulate, adopt, and amend from time to time, rules and regulations regarding the safety and potency of commercial Cannabis distributed, dispensed, cultivated or manufactured at any Licensed Premises operating within the City. The purpose of such rules and regulations is to verify that any Cannabis in any Licensed Premises is free of disallowed pesticides, fungicides, and microbiological organisms such as mold, bacteria, and fungus, and to verify the potency of such Cannabis. B. Testing Centers. The City Manager is authorized on behalf of the City to contract with one or more independent testing laboratories to assist the City Manager in the formulation of the rules and regulations required under this Section and to perform periodic and random testing of Cannabis at each Licensed Premises operating in the City. C. Samples on Demand. Each Licensee shall, upon request of the City Manager, submit a sufficient quantity of Cannabis to a recognized testing facility retained by the City Manager to perform laboratory or chemical analysis of the subject Cannabis. The testing facility shall maintain the testing results as part of its records. The City Manager will notify the Licensee of the results of the analysis. 4-34.16: Appeals Any decision regarding or pertaining to the permit process set forth in this chapter, or any action taken by the City Manager pursuant hereto, may be appealed to the City Council. Such appeal shall be taken by filing with the City Clerk, within ten (10) days after notice of the action or decision complained of has been issued, a written statement setting forth the grounds for the appeal. The City Clerk shall transmit the written statement to the City Council and at its next regular meeting the council shall set a time and place for a hearing on the appeal. Notice of the time and place of such hearing shall be mailed to the appellant. The decision of the City Council on such appeal shall be final and binding on all parties concerned. 4-34.17: Statewide Regulation. This title, and the provisions herein, shall be read consistently with any statewide regulation of medical and/or adult use Cannabis/marijuana that is promulgated by the legislature or by voter approval in the future. In the event that any state law is passed pursuant to the decriminalization or legalization, for recreational use, of Cannabis, this ordinance shall govern the conduct of those businesses allowed to cultivate, manufacture, test, or distribute Cannabis under such law. 22 4-34.18: Interpretation. The provisions of this title shall be read consistent with all the provisions of Federal and State Laws,this chapter, as well as this Code.At no time shall a Commercial Cannabis Business in compliance with state law and this Code be deemed to be an unlawful business. Section 2. Environmental Review. The projects for which Development Agreements have been negotiated are Categorically Exempt from California Environmental Quality Act (CEQA) requirements under provisions of CEQA Guidelines Section 15302 "Replacement or Reconstruction". This exemption (Class 2) consists of replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced. More specifically, Section 15302(b) applies to the replacement of commercial structures with a new commercial structure of substantially the same size, purpose, and capacity. In this case,the cannabis activities occur in areas zoned for manufacturing. The project sites are currently developed with manufacturing uses ' authorized pursuant to the zoning code or are vacant. In addition, most of the sites also qualify for the In-Fill exception (Class 32) pursuant to CEQA Guidelines Section 15332 "In- Fill Development Projects". This exemption applies to projects characterized as in-fill development meeting the conditions described in Section 15332. Section 3. Severability. Should any provision of this chapter, or its application to any Person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on 'my other provision of this chapter or the application of this chapter to any other Person or circumstance and, to that end, the provisions hereof are severable. Section 4. Effect of Enactment. Except as specifically provided herein, nothing contained in this Ordinance shall be deemed to modify or supersede any prior enactment of the City Council that addresses the same subject addressed herein. Section 5. Effective Date. This Ordinance shall take effect thirty (30) days after its adoption. Section 6. Adoption. The City Clerk shall certify to the adoption of this Ordinance and cause it to be published or posted according to law. [Signatures on the next page] 23 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lynwood, California, this 16th day of April 2019. f J•.e Luis Solache, Mayor ATTEST: t. eijA1?- / Maria Quinonez, ity Clerk oil APPROVED AS TO FORM APPROVED • TO CONTENT Noel City,Ta iaAttorn�y Jose r eteotl, City Manager P 24 STATE OF CALIFORNIA ) ) $ COUNTY OF LOS ANGELES ) I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the above and foregoing resolution was duly adopted by the City Council of the City of Lynwood at a regular meeting held in the City Hall of said City on the 16th day of April 2019, and passed by the following vote: AYES: COUNCIL MEMBER CASANOVA, SANTANA, AND MAYOR SOLACHE NOES: COUNCIL MEMBER ALATORRE ABSENT: NONE ABSTAIN: NONE (9_. / / 0 UelitC aria Quinonez, ity Clerk 25