NS-2972 - Amending and Adding Certain Sections to Articles XIII, XII, and VII of Chapter 21 of Santa Ana Municipal Code Pertaining to Ownership Transfers, ...

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transfer, the successor shall deposit the withheld amount with the collector pending settlement of the account of the transferor. If the decision to sell, assign, or otherwise transfer was made within less than a ninety (90) day period prior to the date of the sale, assignment, or other transfer, the successor shall notify the collector of the sale, assignment, or transfer immediately and shall withhold an amount equal to the sum of the transferor's last three (3) months' of reported and remitted business license taxes until the transferor produces a certificate of nonliability stating the nonliability of the transferor for payment of business license tax liabilities. If the transferor does not present a certificate of nonliability within ninety (90) days after such sale, assignment, or other transfer, the successor shall deposit the withheld amount with the collector pending settlement of the account of the transferor. (e) Joint and several liability. If the successor fails to withhold the applicable amount required under subsection (d) they shall become jointly and severally liable along with the transferor for the payment of the full amount of the transferor's business license tax liabilities and shall likewise become jointly and severally liable along with the transferor for future penalties and/or interest charges as may be applicable as set forth in sections 21-83, 21-84, and 21-85 until all business license tax liabilities are satisfied. (f) Certificate of nonliability. Upon application of a medicinal cannabis retail business operator/owner who is terminating their business, or a transferor, or a successor, for a certificate of nonliability, the collector, after conducting an audit therefore, as he or she may deem necessary, shall issue the certificate if the owner's/operator's, transferor's, or successor's business license tax liabilities have been satisfied. If any business license tax liabilities remain outstanding, or if additional business license tax liabilities have accrued subsequent to the date of application, the collector shall give notice to the operator/owner, transferor, or successor of the applicable amount which must be fully paid as a condition of issuing their respective certificate of nonliability. Where a transferor's business license tax liabilities have been partially or wholly paid by their successor to the collector pursuant to subsection (e) or partially or wholly satisfied by their successor's action of withholding and depositing amounts with the collector pursuant to subsection (d), no certificate of nonliability shall be issued to the transferor without the prior written consent of their successor. Section 6. Section 21-131.2 of Article XII of Chapter 21 of the Santa Ana Municipal Code is hereby added to read in full as follows: Sec. 21-131.2 Vertical and horizontal integration of marijuana collective/cooperative licensees (medicinal cannabis retail businesses) —Defined. The terms vertical integration and horizontal integration as used in this Article shall have the following meanings: Vertical integration shall refer to cannabis businesses operating at different points in the same supply chain from cultivation to retail sales, as long as they share at least 80% underlying common ownership, regardless of form of business Ordinance No. NS-2972 Page 6 of 25