1657004400 07/05/22

hmm. Hmm. Yeah. Wow. Good afternoon, everyone I d like to go ahead and call our meeting to order And if the city clerk would please do our roll call. Certainly. Councilmember Kalmick here. Mayor Pro Tem Posey Here glaze here. Councilmember Kalmick here. Councilmember Kalmick jurors not yet arrived. Councilmember Kalmick here. Thank you. Do. We have any simple medical communications? Just one, a power point for this portion of the meeting, a power point presentation entitled Policy Discussion concerning cannabis, business, Taxation and Regulation was submitted by our senior administrative analyst Grace Yun Taylor. Okay. And. Do. We have any public comments? Yes, I do have one person signed up to speak, MR. Russ. Neil, you want to come down? Thank you, Mr Neil, You can come to the podium. I ll. Give it to you. Okay. Good evening. I. Guess. It s good afternoon. Still, Mayor, Doug Lea s and members of the City Council. My name is Russell. Neil and I live in Huntington Beach. I am speaking in opposition to the proposed cannabis business legalization. A. Marijuana MAY not be as dangerous as heroin or fentanyl. But. Neither is it as safe as alcohol and tobacco? It MAY not always be a gateway drug, but tragically. It is a gateway drug for far Too many. Marijuana continues to be identified by federal law as a schedule one drug Having high potential for abuse. No currently accepted medical use and treatment. And, a lack of accepted safety for use. We are not talking here about medical marijuana or c b. D. We are talking about encouraging. The recreational use. Of hallucinogenic products. With souped up thc content. We re talking about. Edible products that are as high as 95% thc. So, I might say, who asked you to put this on the ballot? It appears to be representatives of the marijuana industry. I see no evidence. Of input from Huntington Beach residents and no evidence of your reaching out to Huntington Beach residents. For their opinions. Since the decriminalization of recreational marijuana in California. Illegal sales of marijuana have doubled and emergency room admissions for cannabis related complications. Have shot up by a factor of 10 and the handouts. I have have all links to the source of the information for this. Do. You know what can a boy cannabinoid? Hyper emphasis is It s also called scrum editing. Or screaming and vomiting at the same time. Over a long period of time. Since legalization, e, r doctors and grieving parents. Have become very familiar with this formerly rare syndrome. This drug. Is, an addictive hallucinogen that can lead to psychosis, violence and death. Any tax revenues, the industry promises Will be dwarfed id. By the enormous social costs. Do not put this measure on the NOVEMBER ballot. Thank you. Do. We have any other speakers that concludes public ahead and close the public comments and we ll go ahead and Have our Study Session and Mr um, Zelinka. Would you like to introduce this item? Thank you, mayor. Um this afternoon. We have this Study Session that is being brought forward by, um Grace in the City Manager Zelinka office, and she will be, um, having it be a policy discussion concerning cannabis, business, taxation and regulation, and it will be for Your benefit as the Huntington Beach City Council. So great, Thank you. Thank you, Mr Zelinka Good evening mayor and member of the Council for the benefit of the public who have not been fully caught up with the previous Study Session and City Council meetings. Let me provide some background information on why we are here today. So as you recall last late last year to private cannabis industry groups filed separate petitions to get their ballot measures proposing legalization and regulation of cannabis business in Huntington Beach such genius should have measures were created without City council or step input. In Response City Council conducted to study sessions to discuss preliminary cannabis regulatory fram. On MARCH 1st. The council voted to place on text measure on JUNE primary election asking city voters whether to adopt a special tax on cannabis businesses if they were to be ever permitted. At The times that councils are directed to the subcommittee and staff to discuss various policy concerns and report back report back to the City Council. The City has also solicited valuable input from residents, businesses and community stakeholders on proposed regulatory framework through various channel. Um subcommittee members and city staff conducted a site towards of permitted facilities in other cities. We hosted a community forum on JUNE 9th. Which was very well attended. They also receive a written comment from public which we will which we have shared with you and we ll discuss further later. Based on the official election results from the register of the voters 64% 640.58, I m Sorry Excuse Me 64.58% of the Huntington Beach Voters supported cannabis business tax measure, also known as measure a However it failed to reach two third of the voters vote required to pass. So City Council direction is now requested to determine as to where to go from here. City staff is recommending the city present to ballot measures on NOVEMBER election asking voters number one. Whether the city should legalize and regulate unlimited number of retail and non retail cannabis business in specific permitted areas of Huntington Beach and two if permitted, imposed local excise taxes on cannabis businesses as a general tax. City staff is also recommending the city developed regulatory and zoning organizes for council adoption and cities. Commercial cannabis regulations that spells out Detailed application and renewal procedures as well as operational standards to be adopted by council resolution. We believe that this balance approach will extend to voters authority as to whether commercial canvas activities should be permitted and taxed at the same time in maintains City council s ability to develop policy traditions. And allow timely flexibility to respond to ever changing state law and market condition without delay and expense of initiating on municipal election. If. The regulations are adopted by city resolution instead of city manager. You will provide opportunity for input from City Council as well as the public. Um, does enhance transparency, the way the intent of city ordinance would be implemented. Now. We are going to highlight key features to proposed canvas regulatory framework before I begin. I think it s very important to point out that the proposed or announces and regulation that are published in the city website Are very much a working draft and that s what we are presenting today s subject change depending on city councils further direction, we will You know city staff plants together more community input and finalize ordinances and regulations for your approval in a later time. Okay, so the first is about cannabis industry type. Storefront dispensaries and delivery facilities are permitted for commercial activity for adult use and medical, cannabis and cannabis products run non retailers, including indoor cultivation. Manufacturing casting lab and distributions are permitted. Retailers must be looked at in a permanent structure. In. Other words. Sales on vehicles, Mobile stores, kiosks, vending machines or temporary structure. Are strictly prohibited. Per state regulations sales with drivin or or to drive through will be prohibited. Outdoor cultivation, micro businesses will be prohibited cannabis events and even organizer will be prohibited as well as public and on site consumption consumptions. In this diagram you can see again where the city will be regulating cannabis businesses to fall into the supply chain. Next is about the number of permits City would issue up to 10 permits for retailers and limit the number of non retail permits by zoning restriction without a cap. Additionally it would limit one license type her owners of for example, one owner can apply for one retailer and one manufacturer, but they cannot apply for two or three retail permit applications. Businesses cannot. I mean No more than one application per property and application up, businesses must renew their permit annually before it expires and must begin operation within one year after license is granted. Um Also businesses cannot transfer their permits to others within three years. Next policy areas about where to locate them in the city. And for this portion, I will invite my colleague Mr Hayden Beckman from community development to present Thank you. Thank you, Grace and good afternoon, honorable mayor and fellow council members working with the subcommittee. It was also highly discussed the regulations as it comes to land use, and so being a pro, citing these uses appropriately came to be important. In that we want to reduce potential impacts between these new uses and existing uses. So what I m going to do is I m gonna provide a very brief summary of the land use aspects of the proposed regulatory framework, starting with cannabis retailers. The proposed regulations would allow storefront dispensaries in commercial and specific plan commercial is owned areas. That are applique that apply with buffer restrictions will mention those on the Non storefront delivery only retailers are as specified state license type that called Type nine. Those would be allowed only in the industrial zone also subject to the b. At this time staff would recommend excluding the downtown specific plan in Sunset Beach specific plans as well as any coastal zone overlay property from being a candidate site for future cannabis operation. Next thing, please. Thank you. Additionally cannabis retailers would be permitted in multi storefront buildings there would not currently there is no current proposal to have a buffer between these cannabis use is But also there would be a grandfather clause in that and established cannabis business would be able to continue the operation, even if a new sensitive use were to open within an existing buffer from that operation. The buffer. The recommended buffer distances themselves are based largely on existing state requirements with the difference being staff would currently recommend 1000 ft buffer from any cannabis. Business from any high high school or middle school. And a 600 ft buffer would be applicable to k through five schools, which includes any public, private or charter school, as well as parks, licensed commercial daycares and youth. For non retail uses, um they would be permitted in the industrial zones again. Just, a refresher, the non retail would be manufacturing distribution, cultivation a. They would also be subject to the same buffers as retail, which is 1000 ft from high high school and middle schools and 600 ft. From, the remaining sensitive uses Some of the fundamental inputs that the subcommittee and staff have received so far also have to do with security measures. Um, and there is an extensive list that s included in the draft regulations for your review and consideration. But probably most importantly, there would be a 24 7 Security guard on premises. There would be video monitoring, not unlike existing alcohol businesses in the city, and no consumption would be permitted on site on the premises of these businesses. Staff is also received input from the fire department and just briefly, the fire department would be performing an inspection and safety inspection on these sites prior to occupancy. The commercial cannabis facilities would also be subject to submitting a safety plan for consistency with the California fire code, especially if they are inclusive, any handling or storage of any hazardous materials. And commercial cannabis facilities would be subject to frequent inspections as identified in the community risk assessment. Finally, code enforcement has also been key in supporting staff in its work with the subcommittee in so far as code enforcement is concerned, we are asking that any future licenses maintaining display their permits on site. That they remedy any expired building permits for their facilities in that if there is an expired permit, or if there is an inspection that has not been satisfied that that be cleared up prior to occupancy. And, one of the other key elements as they the future businesses would be prevented from displaying any products or signage or graphics that are visible from the exterior. Outside of what current code would allow. Finally code enforcement would also board any doors or windows and MAY shut off utilities to any illegal operators in the city. With that alternative back over to grace. Thank you. Next is about the permit application and selection process. The proposed application process will be permanently three step process with its ultimate goal is to being Identified high quality operators with financial capacity and experiences and to make the permitting process efficient and streamlined city will develop a point review Eric accordance with the policy goal of the ordinances and have a selection committee comprising of city staff or or Third party evaluators. I ll. Think Pence will be initially screened by a set of minimum qualification to be placed on an eligibility list and selection committee that they evaluate those on the eligibility list and this score them. Applicants will be required to meet all fire safety building requirements and pass all require inspections. In order to be placed on an eligibility list as a first step, applicants must submit up complete application with applicable fees paid to the city. They must verify it and prove that the proposed location meets the zoning and bar for Restrictions and must prove Excuse me and submit proof of their ownership or side control of that location. Applicants will be also required to have at least four current permits or state licenses in California and Summit, a refundable again a refundable security deposit of fixed amount set by the City Council. Applicants will be will also need to identify a local philanthropy partner that benefits the city and demonstrates no past violations. As a step to applicants on eligibility list will be evaluated on the point system as I mentioned before similar tariff p process create area includes or not. Limited to ownership structure, owner qualifications, Business and Operation plan, trafficking at parking Plan Safety and security plan approved by our own police Department and Community benefit plan. Applicants must score from average of old scores at or above a minimum percentage of total available points. For example 70% or 80%. Said by the city of right regulatation. The City manager will have authority to either deny, approve or conditionally approved the application for a permit and he s or her decision will be final. However, applicants whose permit is revoked suspended were not renewed, can appeal to cities hearing officer and proceed with the hearing. So that is the high level summary of the proposed regulatory framework. And through as I said through various channels. City has received great input from the community, covering a wide range of topics, and we would like to summarize six major policy areas that need more direction from the City Council tonight. And. As I said, Um, depending on the city Council direction, all or some of your feedback tonight MAY be incorporated into the final ordinances. First is regarding the medical cannabis businesses and consumers, a city could apply different rules about medical cannabis versus adult use Recreational cannabis. Some suggestions include allowing medical cannabis sales to patients under 21. So, for example, 18 plus years old with valid medical card and I d. Similar to the state regulation. Um and or differentiating tax rates and apply a lower tax rate for medical cannabis products, then recreational, um, cannabis sales. And or three the permitting cannabis business to donate medical products to veterans per sp 34. So. That s the one area And then Ah, Second is about Operation Hours City currently, um the current language allows it to be open from eight am to eight pm for store. France suspense. Aries city could extend operation hours. From six A.M. To 10 P.M. Following the state regulation, and that would make the regulation to be consistent with deliveries. Retail deliveries. Excuse me and third puffer measurement currently proposed zoning language says that prefer distance will be measured from occupy premises to the proper line. Instead. The measurement could be from properly aligned to proper line as well as all of the all the other zoning and par for distance in the cities are being measured. And in force, as such alternative is to measure buffers from premises to promises. The Fourth is about local residency requirement or preference. Many community members expressed their concerns about current proposal ordinance lacking support to local businesses or limiting them to enter market by having ahora bar high bar. The proposed ordinance does include our local hiring, preference and application evaluation as one of the merit based criteria, but the city could further support local residents and business owners by, um Requiring the business owners have been Require a excuse me requiring that the business owners have been Huntington Beach residents for at least three years, or at least 50% of their employees are Huntington Beach residents. Another suggestion is to allocate two permits out of total 10 permits were allowed to additional premise. So that makes tour of 12. Two local only equity businesses that get process after the 1st 10 and lower the entry points with less restrictive requirements. Fifth. Um. It s regarding the pro pre application requirement to have at least four local permits or state licenses. City received much community feedback regarding this matter as well. Although the original intent of this provision is to identify most experienced operators with proven track record and staying power. Some expressed that he MAY um um alienate local small businesses and on level the playing field and that favors bigger operators. City could consider eliminating or lowering the number of required permit and licenses or adding other alternatives to assess the businesses qualification. Such as years of running a successful business isn t Huntington b. Ah, six is about the location and property requirement in the pre application process again because, um, expressed that it would make the process more difficult and less accessible to small businesses. Cook cannot pay rents for months or years. It MAY take to secure permit or start their business. So it could consider not requiring approval, ownership or side control over property to widen the application for such as city of West Hollywood. For small businesses, However in MAY create a situation where application go through rigorous process but then cannot open a business to to lack of viable property and Huntington Beach. Um So. Um, So it was great Is our recommendation again that City Council present to ballot measures in NOVEMBER to obtain border approval, First of regulating and taxing cannabis business Huntington Beach. And, then adopt a regulatory and then use ordinances. And approved the commercial cannabis regulation by council reso. And with that, Um, staff is available to answer any questions you have. Okay. Let me do that for you. Is there Anybody who has a question at this time, Mr Peterson? Go ahead. So. What. Why staff recommending this? Who and staff said, Hey, this is a good idea. We re going to recommend it. You said staffs recommending and I just want to know how they got to this point. Yes, with the input that received from the subcommittee and the council, there are there are recommended actions. That are on the agenda item and we were just trying to provide a basis for moving forward and the council definitely can choose any of those items or provide other direction. All right. So, um I know on some of these things, and I Don t know. I remember, we had the 1000 ft buffer and the 600 ft buffer and I was never for any 600 ft. I wanted everything 1000, but I. Guess. It s 1000 now. Or 600. I just wanted 1000 for everything. So. We never discussed that. You weren t at the meeting that we did. We had a meeting of the whole council. We had a meeting of the subcommittee when we did when we made our recommendation. That was that s the record. I mean, a lot of this is the recommendation of the subcommittee and we we ve had through some a lot of the again. This was the three folks that council empowered to make a recommendation council. This is why we re here tonight. Well, I know, but we had that before, and we were going to bring anything We disagreed on back to council and that was one thing we disagreed on. But So be it. The other thing, Um You had something in here. The four permits. I don t care about that, Um Local peace agreement if you have more than 20 employees, the union can come in. So why are we putting it in? That s redundant? All? These places have more than 20 employees, right? Um, we haven t I m a recommendation recommendation is believed to not 20 Orange County is two across the board with every other city. 20 is is I believe is believe state but state most of our we always did you want to speak No. I think I. Think Councilmember Kalmick answered it so other cities in Orange County, so Santa Ana Costa Mesa at two, not 20, So we were just trying to find parody with The other cities in Orange County. But. You. Don t Need one. It s redundant. I mean lowering the threshold to 2 20 employees again. You don t need one, but community benefit. I don t know why we re taking this business and making them do something. Versus another one. Local hiring. Yeah. You can have that. There s huge turnover in this industry. So and You might think everyone wants to work here, but it s not. It s sort of hard to find people to work at these places. So I wouldn t restrict a business from, you know to hire local I do think the residents should be, uh, are the owner should live in Huntington Beach? Three years. I mean that s at least I think. And you and that owner should own at least 51%. I don t care about the employees, but I think the owner should bring a primary owner. Um I don t know. I ll hear what you guys have to say. But I just You know? I would think if you re going to see If people in Huntington Beach wanted cannabis, which they have shown to want it in the state election in this one. It s sort of came That more people are in favor than against it. But again. A. Lot of people thought it was legal and they were voting to taxes. So. It was a little Um Unclear for some, at least that I ve talked to Ah! Mhm. The other thing is, you know you can set up an ordinance and correct me if I m wrong from the city attorney s office that gives the council the ability, you know, even though the people voted on it to change things in it. It doesn t have to come back every single time to make changes. Um, so I would think that the ordinance should be voted on by the people. Rather than the council changing it. At its with, you know, Every part of. I mean, I think there s some important things that that if you re going to do this, that they need to be codified there, and you can put a provision in an ordinance in an elected ordinance that We can come back and change certain things. That s all I have right now I have Dan and then MISS Carr. Thank you. Um I kinda work backwards a bit. So. This sort of subcommittees met several times and we had a great town hall with 40 something odd folks show up and we took a page of notes and Came back with some of additional recommendations based on that feedback to try to, you know, find his trying to thread the needle with this many folks there with regard to the ordinance. Um I think asking the question whether or not cannabis should be legal in Huntington Beach, Yes or no? Um and we have the ordinance and everything done by the time folks vote in OCTOBER. I mean we are. We re we re working around tonight. We re asking for some big policy changes is about 20 other like things based on The guidance from council later on tonight that will help address that I anticipate having another ad hoc committee after tonight s meeting, either one way or the other, potentially, um, and then go having another town hall once that kind of figured out that last 20 items. Um and then bringing that back to council and then at that point, we should be well before ballots drop in OCTOBER, so I would envision if counsel is so inclined to put this on the ballot is the tax and the question. And then residents can see what the ordinances and vote yes or no based on on that, I think Putting. The ordinance on is is highly complicated and highly technical, and I think we re going to likely have to make some tweaks to this going forward in the future. There is no. I think former interim city manager Joyce said at the town hall that There s no model ordinance for this No one said. You can t point to a single city and so they did this out of the gate. Perfect what I have done and what I think the rest of the committee has done to its staff has done. As I looked at what other cities have done found out what the learned from what they did wrong, and we re trying to ameliorate and use their best practices from some of these other cities as we are the umpteenth city to to to attempt this and I think to address Some of the the only speaker as to why is that we had to ballot in issues walked in that we had no control over and those would have been placed on the NOVEMBER ballot. Had they gone and collected signatures and likely they would we could have ended up in a situation like South Bay. Um Manhattan Redondo and her most of beach. Elliott. Lewis has walked in, uh, initiatives there on the ballot in NOVEMBER, so the city has no control over that, And so they re scrambling now to try to figure out what they want to see in their city. But we ve This council has taken the initiative to begin work on this so in a good faith effort, so that I think industry is backed off. I mean they didn they didn t go collect signatures, but we know they could We absolutely know they could. And I think that Let s continue to work on this is that the inevitability of the why was it was going to happen to us instead, it s not going to happen to us. We are in control of that process with regard to that, I think The what I had that the committee had recommended. I think through the last time the last ad hoc committee was to bring some of these six big points that we need to counsel direction on back later tonight being should we allow medical operating hours, the buffers Um, addressing some of the local, um concerns about being able to open a business. I am personally think that this shouldn t be your first rodeo that this should not be your first best jump into cannabis. I don t want to see failed. Businesses don t want to see folks going bankrupt. I think starting with the larger folks that are shown proven that they can operate a retail and non retail businesses in other parts of the s. Um, but then allowing and that was the That was what came out of the ad. The Town Hall was, um, current, like, Well, okay, well, let s add on to more permits. We can process after the 10 are maps currently and its council agrees have quite a bit of retail space in them. So the 1st 10 aren t going to eat up all the great retail space. That would allow for 100% local like if you are a local business owner and Huntington Beach you want to get into cannabis. It s envision that we drop that threshold down the application. The initial application fee. Potentially you don t you were contemplating not having a lock up. Property with that as well, which is another one of the things we need to discuss, as well as should property be part of the application. Um originally I was against it. I thought where they should be decoupled to avoid a land rush. That s already happened. So at this point, I think what staff presented was helpful in that We don t want somebody to go through this expensive application process, pay their attorneys to figure it all out, and then realized that they re invalid property. It also helps with the scoring of the application to make sure that, um, that it s where we want it and I think through the public meetings. We have maps. Everybody knows where cannabis would be legal, potentially Throughout the city. But I do think that pre application requirements is important. Um. I think I would really like to see some locals only permits. Um that would allow for folks that want to get into the industry is after the fact so staff would have had 10 applications to process they ll have learned the process. I envisioned that there would be a you know, Cannabis Chamber of commerce by then folks would get industry so there would be two folks. You can do it with an already kind of established industry. Ready to go, Um, for buffers, I think you know premise. The premise is really import. Um, there are parking lots are enormous. And if we want to make sure that we have viable space and we don t everybody out that we re going from the building premise and in my mind and staff can correct me on this is the building envelope you operate in and so if you measure it from your sweet or your property mind to the next line. But. I would only say I took it to a position is a little more complicated, which is from parks and schools, which is the thousands of schools from the other housing public parks as well. You take it from the property line of those to give them a little bit extra buffer to your premises for daycares and the things that would appear in other shopping center. We got big shopping centers. Would be premised premise. So you could. I mean, in some cases, you can be almost half a mile away from, uh, if you re on one side of the shopping center there on the other. Um, So I mean again and then just step back and ask. Well. What are the buffers actually for right, you can throw a beer bottle from liquor store to liquor store in the city. There s two or three liquor licenses across the street from Ocean View High school. These are locations where you have to be 21, or 18 with a medical card if we decide to go that way, which I think is a is a good idea. Um, you know what are those? What are those buffers actually meant to imply And I think State minimums, I think are important. And I think, um Because you know some folks in high school can have mustaches. Um, man that I think that 1000 ft buffer is important. Most elementary schools are in the middle of residential communities anyway, so that they wouldn t It doesn t really change much, but I think and discussion with some folks in industry and some and staff is that Rolling stuff back after the fact is very difficult. Um, so I think if we can start with state minimums, Um and then I think with our high school and middle school carpet, I think is a function above her so I want to appreciate staff on the really hard work and basically trying to, um, figure out what everybody else did wrong to make us successful here, and I don t think anyone s under any Um, dream that we re going to get this right right out of the gate. But we have, We re we have tried our hardest and I think the six tonight would give direction for the other 20 kind of minor things that we come back with the recommendation and that spreadsheet. I think I would imagine being available everybody else after the fact So I also, I m sure my fellow council members feel the same, but The ad hoc meetings. I know if you ve been They good and you ve had a good response, especially their last one. Do. You feel that the six that were presented by staff are a good overall from the meetings and the customers that you ve had from the city speaking Two of them came out of that. That meeting. Specifically, the other four were stuff we can actually three did so the medical option which way we actually overlooked operating hours and then Having more local be able to participate in the process came out of that. I think that was really important, but I think to speak to the attacks right? Like, um We had very, very low voter turnout, 40, But. My thing is like 40 40% voter turnout. Huntington Beach modeling was on 50 to 60% if you dig into the numbers, you see that It was 66 point. I mean, a fraction of a point off by just a vote by mail is a couple of 1000 folks that showed up and voted in person. They voted like 50 50, and that that brought us down But we lost. I think by two points on it, So we had a I think it s pretty good Poll of folks at 2 to 1 and and builds on the polling data that we shut that we saw from NOVEMBER of last year and then the prop 64. Back in the day that shows that this is only getting more popular in that residence, I think are interested in it. So, um that s all i ll. Stop talking. I m sorry. Excuse me, Mary. If. I. MAY. I Think five of six, um, policy area that we just discussed are actually community and businesses. Thank you? I appreciate that. Go ahead and ask are well, thank you, Um As one of the council members that does not serve on the ad hoc committee. I really do appreciate this presentation, Grace. I think you always do an amazing job of bringing so many details to the table, and we were actually for those of us who were not on the ad hoc committee we were in recommended advised actually prohibited From going to that town hall. So. This is a great opportunity for us to get caught up because lot of the questions that Mr Peterson had is kind of like, Well, wait a minute. Let s slow our roll here a little bit, so I appreciate this opportunity to bring everybody up to speed, So. I have a lot of questions and forgive me if they sound very basic, But again. It s somebody who does not serve on the ad hoc committee and somebody who wants to be brought up to speed. I just want to start with some of the basics. Which is why 10 permits. How Did that come about what was that based on? And? Is that an appropriate number for Huntington Beach. And I. Guess really My question, Grace. I don t know if you want to answer if you want to summarize the ad hoc committee or one of the ad hoc members wants to answer Um? Yeah, 10 is plenty. I mean finds five s fine 10 spine, The industry says, You know they have their matric. But if you talk to a lot of them. They think that s too much for the city. Too many known Oh if you go with theirs, which okay 20, but I mean there s a big difference between when you say five is fine in tennis fine, that s like, night and day to me. I will I wanted five. Okay. They wanted 10. So. Um I, but the industry sort of looks at like 20, But then you go to the Costa Mesa model, which is a nightmare. They. Just, open it up from everything and They have flooded with applications and it s It s really bad for both the operator and the city staff. Um my, my thought, and you know all of our thought, I think was Let s find a reasonable number, whether it be five or 10. But something that we can handle staff wise and Okay, not just opening up the whole city if I can add to that, so when we re talking about metrics, um, that the industry is using they have a number per 10,000 residents or something like that. And so that s where This upper limit of 20 comes from the people were kind of tossing around, and we just Did feel like 20 sounded like a lot. Um You know for this city, especially starting out. Um. So, you know to me personally, 10 sounded reasonable when you have the industry talking about. Well. You know, it s based on what we think. You know it s it s you guys can handle 20. And. That s I just don t Necessarily agree, but at the same time You know, I think that 10 might be doable, considering the staff resources that we have and the ability to use? Um like some other cities do a contractor to handle the qualification process and things l. Um So. You know, I think 10, plus the two that it would be reserved for local ownership. If. I MAY add, um in FEBRUARY 15th Study Session what we did was we Looked at other cities and compare license per population ratio so that we can actually compare Apple to apple. So, For example. Long Beach have permits one every 12,000. Pasadena have won every 14th 1000, So. Our recommendation is one every 20,000 so I think compared to other cities. As I mentioned we are a little more conservative. Besides So on that line, then I mean we have the ad hoc committee. Do. We have some outside consultants helping us with this Are we using like Nobody. Is that something that we re considering doing because I think that would be very helpful to hire somebody? Absolutely absolutely Councilmember Kalmick. We do have, um Existing contract with h l and companies. We initially work with them, and then we wanted to kind of took it on first and look at other cities. But when we are ready, I think we will be employing them to review our final ordinances to get their feedback. And get their technical, um, support. I think that that I if it were me if I were on the ad hoc committee, I probably would have engaged them. Earlier in this process to answer some of these questions to have the data to back it up rather than just kind of looking on different websites to figure But. I have a lot and I know we don t have an incredible amount of time. We have a lot to do today, but one of the issues that I thought that was sort of unique was the transferring of the permit after three years. And. The reason why I m a little bit bothered about this because the city now is creating a very valuable asset And I m Not really Sure why we would do that. Given that, um, if somebody is ready to move on with their cannabis business, I would imagine that we would return that license back to the city to give other people the opportunity to apply for it. Whereas Now. If I m an investor. I could Petition this in whether my businesses was going to be thriving or not within three years, I now have a license that s worth probably $10 million. So Why would we do that? As a city instead of bringing it back to us? To me It doesn t make any sense Is that the ad hoc committee want to address that, or As a business person, which is my background. I mean, at 25 years in business. I See these and I m to me. This is like this is a ridiculous thing that the city has proposed. So with the, um Let s say you get the business. You re not doing well or you re not going to give it back to the city at your asset. It s like a true like the asset, right? It s the same thing. So you re going to try to sell it, and it was sort of. We re sort of looking more, but I think Personally If the If. You have an owner. You know someone that lives in Huntington Beach will be less so that was sort of one of the right reasons why I wanted someone, but you don t want someone that comes in, sort of like what developers do and get entitlements and then just turn around and sell it and they don t build the project. So we were trying to avoid that type of thing. I agree and and and it was one of those. You know if you re going to build it in most of the people that are going to do that, I mean in places like Costa Mesa where it s it s the Wild West. You ll have a bunch of that We didn t want that, at least from my thinking it was you Come in. You re going to start the business. You know if it s going to fail if you weren t prepared Um which I think MAY be more on this small business stuff. I. Don t think they know what They re actually up for because it isn t a very, very, very expensive process. Um You know it s it s a way to sort of get that that development model buying something entitling it and selling it for more. We just said We didn t want that type of thing. We wanted people who, actually we re going to do the job, and that s where again the owner, local ownership came in to play. You can if you can get that local ownership again, you ve created an asset with these licenses, the local so I think For me. I wouldn t want to see that if I could answer that a different way. Sure, again like I agree with Councilmember Kalmick. The idea was to not have us create value. Most of these businesses if you re trying to get open, you re going to fail within the 1st 18 months. At that point you failed and you re you not open. Your permit is revoked, and now we have nine instead of 10, for instance, right, Your permit goes b. At. Three years. The ideas that you have a successful business. And some of this is that you have to see you can very few people in 100% of their license right? They own portions of it. I think the state is either 2025%. You re considered an owner. At some point you will need to cash out. You need to be able to sell your license. And. So that s what this does is that at three years if you need if you need to sell your business, you re capable of selling out business. You still have to reapply, though. So at the renewal process at year. I guess what I will have to figure out the math is it s either year three or your four, depending on how that s red. Um, you would have your the new person applying to your sale would have to go through and hit the same scoring metric and you have to meet at least the minimum scoring metric Of the 10 pool. So if the tops the bottom scores 83, you still have to score 83 for that new person. So it does allow you to sell your business. Um, and we ve somewhat created value We do. I mean we do it with alcohol permits and all of the similar things with the conditional use permits in that regard, but What I was trying to avoid was the Go through the process in the first year. Don t get open, and then you ve got this big, valuable thing If you don t get you have a year from when your permits issued to open so if you can t get open Um, you are your permits revoked. Are. You go to the replication process. After three years, you can sell your business That s kind of you ve built your business. You ve gotta float function business. You can sell it, but you have to go through the transfer process. And that s the I mean, it s almost the American way, right? You, Build your business secret and you sell it again like I am 100% hesitant in trying to create value out of nothing but that three year lockup period was so that you re not warehousing and you re not Just trading paper, So you actually have functional business that you can sell, and we figured that three years is about the that end of where you re either going to get open or not, And again. You have that one year from permit issuing To open or even the three years is sort of. I mean, We don t have any data to back that up to say that that is the break even point of when a business does become profitable. Why not? Five years. I mean why not? 10 years, right? I mean, at that point Now we re you going to run into no one s going to get no one s going to want to operate if they can t sell their business within 10 years or sell a portion of their business in years, three years Some folks were arguing for industry was in emails for two years like they felt that it was three years is too much, but you know, 18 months is about that time so again like, yeah, 10 years like no one s really gonna open because they can t They can t get out. Um of the apartment stuck with it effectively or they have to turn it back in. I mean, but you basically built your Yeah. It s a rental effectively. You don t want to be doing this creating these golden tickets. Of course that you know in in a way, it does sort of feel like that if you re one of the lucky tend to have gotten this Um Even if you invested three or $4 million, you re looking at being able to cash out. Handsomely. After three years, you ve got to be operating a business successfully, though. Yeah, even if you re not operating if you are running in the red again, you ve got the license. That s You ve got the permit. We can talk. We can talk more offline on it, but I don t want to take more. But. That s just the thoughts that are going through my head on that, just to other things real quick. The city manager has the final decision on the permits. I don t really understand that why the city manager doesn t I don t know why this wouldn t go through that s pretty standard in the industry, so usually you ll have like an outside company. Do all the work like they that that would be I would be for that if you had a third party. No, no, no, no. The City council the or the manager that he just approves it his signature on it at the final. Okay, Right. Okay. Thank you for that clarification. Yeah. Usually the best is if you haven t City Manager Zelinka in on it, Correct. Okay got it. Um And then the I agree with you. Mr Call make about starting with the state minimums. I like that idea, so I would also extend that to the store hours, which are the state minimums. Um and then the locals only requirement. We could probably take a look at that because I do think that there is an opportunity there whether we add two more permits, or we used two of the 10. To make that an opportunity and maybe we craft ordinances that, um, are more in line for people in the locals Ordinance. I think that there s an opportunity there, especially requiring the four permits and all of those other things, and the last thing I wanted to just touch upon quickly was the ordinance itself on giving it to the voters. Yes I I think that the voters do want to vote on this. But I think we need to be, um, very, you know, specific on some issues, issues when it comes to the ordinance, because if you re just asking an open ended question do you want retail cannabis in your city? Yes or no? I think that a lot of people would see. Well, maybe And and I think that that s something like Do. You want cannabis like Costa Mesa or do you want cast cannabis like Santa Ana? There s just so many different ordinances out there that if you are going to be putting that on the ballot, there needs to be some language in there that, um, maybe by now and then. That the ad hoc committee can, um, really kind of get something more concrete like we want 10 businesses or some of the things that you guys have worked on. To make it a little bit more concrete, because the thing that I m a little bit worried about with having the ordinance go to the voters is that we don t know what this industry is going to look like in 10 years. And the way that businesses are continually disrupted by technology. Retail sales could be completely obsolete. So I think that You know when we when we do an ordinance, and we and we bring it to the to the folks, it needs to be clear. With. The intent is behind it. Otherwise. I think that if it s too ambiguous, people will interpret it in their own way. And it, um It. Just. It causes more questions than it provides answers right And first for the committee. I think I don t want to speak for Rhonda Bolton. I contemplated that the council would have all of the ordinances and everything done. Before OCTOBER. Um, that then the voters this would it would all be passed contingent on the vote of the people in NOVEMBER so they would have what we contemplated 100% all the rags. All the ordinances done by the council. Laid out and the voters would vote up or down on whether or not they prove that, but not actually putting it on the ballot, But it wouldn t be on the ballot so the ballot would be very open ended, but it would mean statements would say, Go to this website and download the order. The past the ordinances, Zoning. I mean you could contemplate the Planning commission going through their process as well, already changing the zoning contingent on The voter approval in NOVEMBER. Okay, that s that s kind of a complex council is going to make the decision. That s kind of what I contemplated was that we put his little on the ballot as possible. So that gives us the most versatility in the end. But Council would have already gone through the process by OCTOBER well again. That s why? I appreciate that. We re having this meeting to talk this all out because I haven t been privy to any of those, so I think it s important that we have more Study Session about this and more town halls to let the community know and provide more input. One Town Hall. I. Don t think is enough. One thing, the great Moser. I m sorry. The one thing that I would like to remind the council is that if you like to take the entire ordinance to the voters in NOVEMBER, we have to finalize everything. Before AUGUST 12th, and I don t think that timeline is realistic at all if you like to direct staff to come up with a more specific question, then just do you want this or not in our town? We can certainly come up with more specific, specific language that says You know the maximum permit the district zone so that the question is little more specific. We can certainly do that. But entire ordinance will not be ready by the deadline for the NOVEMBER election. Drb Thank you? I concur with Councilmember Kalmick are with regards to the level of outreach. I appreciate that we had a town hall. Um it s great that we re having the Study Session. I too, agree that I would like to have more town halls, which you already mentioned. In your presentation as well. I think that s really important and it s it important demonstrated by the fact that we had multiple things from the last town hall, um, now presented as policy options here. Um. Also, I appreciate. Um Councilmember Kalmick commenting are really responding before with regards to how we went about all of these things specifically about the industry, really preempting industry and Kind of making us um, you know, move in a certain direction. I think it s important that we do retain that control. Um and that we are doing so by looking at the best practices of other communities that have already done this learned from that and really allowing us to provide some flexibility, especially looking at how we re going to do the vote or the ballot measures versus the ordinance. I think it makes sense with what was just discussed. That. We move forward with it the way that has been recommended. I do have a couple of questions, though with regards to The maximum number. I know that Councilmember Kalmick recommend or mentioned that that was 1 to 20,000 at this point, 20,000 residents which would get us to that 10 as the uppermost limit for our city, which was half of what the industry had recommended as the uppermost limit. My question really is I know it was mentioned that we would either potentially look at doing 10 plus two or essentially eight plus two. My first thought would be if the upper limit is 10 that it should be eight plus two. Um Because as much as I think it s great to have a local, um local participants in this, but if our Max is 10 I. Don t see why we would not proceed with a max of 10. Is there any commentary with regards to that? 12 verses. 10. I think I think I m, the one that submitted the recommendation so I can speak to the why I thought of it that way. Um, I think it s gonna be real difficult for new folks to get involved in this Um, very, very difficult if the fact that if they can even get open, so, um I had contemplated. The two is being an add on after the fact. Um, with my guess would be a low probability opening, but lowering a lot of the threshold so decoupling property. Potentially. You wouldn t need to identify your property. You potentially get a tax break as being 100% local owned. We have the ability to set tax rates. And so if you meet that you could lower the tax rate for those locals. And, then lower fees to get it into the into the chute, so because it would be different, not the locals piece would also not be precluded from the 10 in my mind, so you would still get points for being local zone. Local Local hire all of that. You get all those points as part of the regular application as well. So someone who would be 100% local could apply for, you know, wait and gamble after the fact that the two or go for the 10 I just I just contemplated. It looked like weave, attend. We re still Low for what other cities have right. So. He s 1 to 10 20 were I have issues Also with people driving real far like I don t want to increase vm t because we are cities very geographically Large takes 30 40 minutes to drive across town. Um so I basically said Look, the 10 I think can get open. If it were established. They ve already got stores. It s just copy paste for a lot of what they currently have. But. Let s have those two on after the fact. So that a we can maximize jobs in our city as fat as quick as possible. Revitalization of our shopping centers. And then you know, I think the last for me is really the tax revenue, which again? That s not really What driving this for me. This is really to really help our shopping centers out because these folks come in and really do a great job on on the centers and then the jobs right. There s going to be a nontrivial number of jobs created with this if we met in vision, 10 and maybe a couple of non industrial non retail If we were to do the eight plus two and not the 10, plus two and with the concern that maybe the two could not, actually, you know, create that business would there will we be able to do something? Where I don t know. Put some type of time frame on it, where if they weren t able to Create those businesses within that time frame. Those two additional could go back to the full number. I know it s complicated, but I just I just feel pretty strongly about maintaining the 10. Or didn t the to come from sort of the smaller businesses wanting into it that aren t in the industry. So I. Guess. It s a legal question. How do you Be fair with a process and then you say, But, these people it sort of like with housing. You know if you have if you have low income housing, you can t say that s just for Huntington Beach. It comes from everywhere. So how do you How? Do? You set something like that up. Mike and Mike, I I mean, To where you can do it legally, like, are we going to get sued? I mean? That s? We haven t talked about it in the subcommittee, but I know where it came from, with people not in the industry and for saying, Hey, these people you have to be in the industry for you. You have to license the babble, blah, blah, blah and these people You want to grow pot in your backyard and sell it and they were good. You know it. It s I mean it not that, but that s basically we re doing. How. Do. You do that legally. Are there precedents in other cities where they have done that. I mean I would defer to the staff has been working on it and if there are other precedents, so there are some industry Um. It s called usually Social Equity program, and they So. There would, for example, City of Santa Sacramento or sick of Long Beach would set aside number of permits to this social equity applicants who would be local who who would be most affected by war on drug in the past, so there are some said, create eerie a and some of the as I mentioned Sacramento Long Beach and some of the cities are working on this program. We have not based on disadvantaged neighborhood. This that s not who came to the council. We had local business owners small business that would, but you re talking about the model she s talking about is that the framework exists to differentiate permits by class. Um and that s I. Think what? What the model would be modeled on the set aside of so we would just increase the captain 12 with two permits being Equity locals only equity permits, I think is really what the what we envisioned. Maybe that the disadvantage that the locals have is because they don t have the same type of capital. Uh that someone might be able to access if they re already involved in the business, or, um You know, they don t have the same degree of experience in the business that I m thinking what they were saying in the meeting. They didn t have the they didn t have a license. They weren t in the industry. They wanted a storefront. Couldn t meet our criteria so they would be like a small business. Yeah. Now he s gonna finish. Sorry. Yeah. I had just one more question with I. I appreciated the medical Patients being added the tax rates lowered for those and then the donations to veterans. I just was curious if there were any unintended consequences of of those Types of things being implemented elsewhere. Maybe I don t know absolutely have a long beach. They have a two separate were concurrent a permitting process for medical and adult use. So. Definitely, we could, um Develop ordinance that that, um kind of serve different populations. Okay. Thank you thank you all for your questions. What. I ve really appreciated. Um Be sticking around for a long time for a few of us have been here for a while, but Um Grace and Hayden. Excellent. Um information for us to study clearly, we need Maybe a few more Adcox. And. I welcome them, because what I appreciate about the Councilmember Kalmick really trying to get it right. And why not? I mean? Let s do it. Let do it that way, so it could be a model We re going to break for, um Closed Session and, um, I need a motion to do that. Okay, all right, and we ll be sky. Walks on it while Really like light. Yeah. Do something. Working. Actor like them shiny. Wheel understand along you know that something somewhere? The season. No lights. Shadow show. Scottish Yeah. Eating everyone. I d like to go ahead and reconvene the City Council Public Finance Authority meeting and if we put City clerk. If we could Please have roll call. Certainly all began. Council member Peterson here. Council member Bolton Council member Posey here. Mayor Dale Glaze here. Council member car here. Council member Mosher here. Council member comic present. Thank you. And maybe you can all stand for the Pledge of Allegiance, led by council member Posey and the invocation by Maha rather than of the Muslim community. Huntington s beach and member of the Greater Huntington s beach in our Faith Council. In light of our recent celebration of the nation s birthday yesterday. Please join me in saluting our flag. Pleasure. Republic. Oh, GOD have mercy and compassion in your sacred name. We gather here. And. We begin and we end we thank you for the many and abundant blessings we receive every day. MAY you continue to bless the important work of this council. To help them lead and work for the good of all in this community and to preserve our peaceful way of life. Amen. Amen. Closed session report by the city attorney. Thank You mayor. Nothing tonight. Okay. Thank you okay awards in presentations. So this evening. We have a special award for, um Congresswoman Michelle Steel in her representative Kim Vander Mulan. Is that how it s pron. Thank you if you join me up here. Um. It s My great pleasure to thank congresswoman shall steal for her valiant effort in securing 15 point. Five million in funding to help our coastline from further erosion with the Surfside Sunset, Newport s Beach Replenishment Project. So we are let her know that we are so grateful for her efforts and helping California coastline with the sand Replace PRESIDENT Many people do not know the erosion on Orange County beaches can be traced way back to the 19 forties. The impacts of a Rogge in along our coastline is not simply that a Beach issue. It s a community wide issue that affects our natural habitats. Local businesses, residents, visitors and significant impacts on our infrastructure. This issue deserves an immediate response and we are incredibly appreciative of her support in our mission to replenish the beautiful coastline and keep our communities safe. So I would like to offer you if you d like to say a few words on her behalf. Well. Thank you so much. Um, This is amazing. I will definitely pass this o