Item 28 - OC Grand Jury's Report, Findings, Recs. Regarding Santa Ana's Cannabis Program

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Exhibit 2 Grand Jury Recommendations and City Responses Recommendation City response R1 The Orange County Grand Jury recommends that the Santa Ana City Council require an annual report specifically detailing all Retail Adult-Use Cannabis money spent each fiscal year. This report should be presented to the Santa Ana City Council and made public. This should be completed by December 31, 2021, for fiscal year 2020-21, and by September 30 following each fiscal year thereafter. (F1) The City can prepare a detailed spending report as recommended by the Grand Jury. Detailed spending information for FY19-20 and FY20-21 was presented to City Council with the August 17, 2021 agenda. A detailed spending report can be presented to City Council by December 31 each year. However, the City cannot commit to a detailed spending report by September 30 for future years, as the general ledger is not fully reconciled and audited by each September 30. R2 The Orange County Grand Jury recommends that the City of Santa Ana designate an individual to oversee and provide centralized coordination of Retail Adult-Use Cannabis activity commencing January 1, 2022. (F3) This recommendation has already been implemented by the City since 2020. The City created the Cannabis Office & Operations Logistics unit with trained staff within the Planning and Building Agency to serve as the central repository for cannabis information and inquiries. This Office functions as a “one-stop shop” to administer the commercial cannabis regulatory program. With a concierge-approach mindset, the Office tailors its approach to match the unique circumstances of this new industry and specifically addresses and coordinates applications for commercial cannabis permits in the City of Santa Ana. As the central resource for the City, this Office works directly with State of California cannabis regulatory agency, pertinent City and external agencies, and cannabis business stakeholders in the implementation of the city’s cannabis program to ensure adherence to the city’s municipal code and prompt openings of new businesses. As part of its task, the Office also works with City Attorney’s Office and the Police Department on background checks and coordinates enforcement and compliance with applicable regulations. R3 The Orange County Grand Jury recommends that the City of Santa Ana create a process to report to the Santa Ana City Council and the residents of Santa Ana detailed information about the participation of Retail Adult-Use Cannabis dispensaries in the Community Benefits Program by December 31, 2021 and yearly thereafter. (F6) Upon adopting an ordinance to allow and regulate adult-use retail cannabis businesses in Santa Ana, the City required all adult-use cannabis retailers to enter into an Operating Agreement to accomplish several goals: 1. Require full compliance with all ordinance requirements to operate a cannabis business in Santa Ana; 2. Commit to payment of operating fees based on business activities; and 3. Engage businesses with the Santa Ana community through local hiring, local sourcing, volunteer events, charitable contributions, and sustainable business practices for the environment and for employees. Upon the adoption of subsequent ordinances and voter-approved taxes in Measure Y, many of the goals of the Operating Agreement were replaced by ordinance but the community benefits component remained. All cannabis businesses continue to commit to various forms of community benefits, and results have been successful, with cannabis businesses providing various forms of charitable contributions, volunteer hours, toy drives, participation in Covid-19 relief programs like CARES Act measures, and food drives. The City recognizes the opportunity to continue building upon the program drawing from City’s experience with the Operating Agreement process, as community benefit commitments may take many different forms and functions. Staff are currently drafting measures to replace the Operating Agreement in its entirety and to develop measurable community benefit and commitment requirements. These changes are will be presented for City Council consideration in early 2022.