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"Pot Luck": Santa Ana's Monopoly on Licensed Retail Adult -Use Cannabis in Orange County METHOD OF STUDY The OCGJ conducted extensive internet research on the legal status of Retail Adult -Use Cannabis, both nationwide and in California, by reviewing and analyzing relevant legislation as well as the numerous California propositions that culminated in the passage of Proposition 64. In addition, the OCGJ reviewed City of Santa Ana documents including staff reports, commission reports, Requests for City Council Actions, and ordinances that authorized and established conditions for the sale of cannabis products for Adult -Use. The OCGJ also interviewed current and former Santa Ana City Council members and City employees who work in agencies directly involved with or impacted by the licensing and sale of Retail Adult -Use Cannabis products in Santa Ana. In addition, OCGJ interviewed professional experts not employed by the City, including licensed Retail Adult -Use Cannabis dispensary proprietors and employees. The OCGJ visited several licensed Retail Adult -Use Cannabis dispensaries in Santa Ana to observe the facilities, amenities, staff, clientele, and operations. INVESTIGATION AND ANALYSIS Santa Ana City Council Says "Yes" In response to the November 2016 passage of Proposition 64 in California, the Santa Ana City Council began to consider licensing and regulating the retail sale of cannabis for adults. After multiple meetings and discussions and after thorough staff analysis, on October 17, 2017, the City Council introduced ordinance number NS-2929 for a first reading. The ordinance was identified as "An Ordinance of the City Council of the City of Santa Ana creating Chapter 40 of the Santa Ana Municipal Code, `Regulation of Commercial Cannabis', to Regulate Commercial Cannabis Activities, excepting Medicinal Retail." On November 9, 2017, the ordinance was introduced for a second reading and approved with amendments by a vote of 5-0 (two City Council members were absent). Santa Ana has remained the only city in Orange County issuing business licenses and regulating the retail sale of Adult - Use Cannabis for the years 2018, 2019, and 2020. Dispensary Application and Licensing Process Santa Ana Ordinance number NS-2929 allows up to 30 Retail Adult -Use Cannabis stores within the City. As of April 15, 2021, there were 23 dispensaries open and operating in the City of Santa Ana (see Appendix 1). The ordinance sets forth operational standards, permit procedures, and an operating agreement to address collection of operating fees. To ensure fairness and impartiality in the selection process, the City devised a system of "Retail Adult -Use Cannabis merit -based criteria and possible points" (see Appendix 2) to evaluate applicants who sought to operate a dispensary offering Adult -Use Cannabis products. This led to the Commercial Cannabis Application (Phase I and Phase II) and Permit Process (see Appendix 3), a comprehensive evaluation process that each Retail Adult -Use Cannabis dispensary applicant had to follow and pass before being allowed to open for business. 2020-2021 Orange County Grand Jury Page 3 City Council 28 — 7 9/7/2021