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HomeMy WebLinkAboutSPOT, THE (THE 10 SPOT, INC.)A-2017-394 IF ANCE NOT REQUIRED WORK MAY PROCEED CLERK OF COUNCIL QV�(0)6(f, ?e2ejhtjvW c0 OPERATING AGREEMENT FOR NON -MEDICINAL COMMERCIAL CANNABIS BUSINESSES G C I This Operating Agreement ("AGREEMENT") is dated March 29th, 2020, between the City of Santa Ana, a charter city and municipal corporation ("CITY") and The ,10'Spot, Inc. dba The Spot ("OPERATOR"), collectively referred to as "the Parties". This AGREEMENT shall become effective on the date that OPERATOR is issued a Regulatory Safety Permit by CITY for the mi operation of a commercial cannabis business conducting Adult -Use Retail services in whole or in part of its operations transacted and carried -on by OPERATOR at the following subject property location, 2700 S Shannon St, Santa Ana, CA 92704. Public Benefit. A. Intent. The purpose of this Operating AGREEMENT is to ensure positive community impacts from commercial cannabis business operations through local hiring and local sourcing, community benefit and sustainable business practices, and the collection of required fees and taxes as applicable for the operation of a commercial cannabis business and to provide mitigation options to be used by CITY to compensate for impacts to CITY services, residents, and/or businesses as set forth in Santa Ana Municipal Code Chapter 40. The Parties agree that this AGREEMENT confers substantial private benefits on OPERATOR which should be balanced by commensurate public benefits. As part of the cannabis Regulatory Safety Permit process, OPERATOR agrees to enter into this AGREEMENT. OPERATOR acknowledges that CITY and OPERATOR have had extensive negotiations and proceedings prior to entering into this AGREEMENT. OPERATOR has elected to execute this AGREEMENT as it provides OPERATOR with important economic benefits. Accordingly, the Parties intend to provide consideration to the public to balance the private benefits conferred on OPERATOR by providing mitigation measures to the public and to pay for CITY services. B. Local Hiring and Sourcing. OPERATOR agrees to use its reasonable efforts to hire qualified City of Santa Ana residents living in Santa Ana to work at its commercial cannabis businesses. OPERATOR shall also use reasonable efforts to retain the services of qualified contractors and suppliers who are located in the City of Santa Ana or who employ a significant number of City of Santa Ana residents. OPERATOR shall make a good faith effort to advertise on various social media sites, at local job fairs, and through public agencies and organizations. C. Community Benefit and Sustainable Business Practices Plan. OPERATOR agrees to submit a Community Benefit and Sustainable Business Practices Plan ("Plan") to CITY that is hereby attached and incorporated into this AGREEMENT as ("EXHIBIT A"). Said Plan shall detail OPERATOR's experience working with community -based groups such as school districts, college districts, city or county agencies, non-profit organizations, artist or downtown groups. The Plan shall also include a description of OPERATOR's efforts for recruiting and hiring local persons and businesses. Said Plan must also outline commitments by OPERATOR to engage its staff in community service events or programs in the City of Santa Ana. Plan must also outline and address sustainable business practices. OPERATOR shall adequately document that it has met the Plan's obligations and commitments as a condition of renewal/extension of this AGREEMENT upon expiration of the initial term and any extensions. 2. Records Inspection. Examination and Audit. OPERATOR acknowledges and agrees that CITY is empowered under this Agreement to inspect, examine and audit OPERATOR's books and records (including tax filings and returns), to ascertain the amount of operating fees due and owing. CITY or its authorized agents shall have the power and authority to conduct a full inspection, examination and audit of such books and records (including tax filings and returns) at any reasonable time, including but not limited to, during normal business hours. In the event any such books, records, tax filings and returns cannot be made fully available within the City of Santa Ana, OPERATOR acknowledges and agrees that it shall reimburse CITY for the cost of all transportation, lodging, meals, portal-to-portal travel time, and other incidental costs reasonably incurred by CITY or its authorized agents in obtaining said full inspection, examination and audit. In the event that said records inspection, examination and audit determines that a net operating agreement fee payment deficiency of greater than Five Percent (5%) exists; OPERATOR acknowledges and agrees that it shall reimburse CITY for the full cost of said records inspection, examination and audit reasonably incurred by CITY or its authorized agents. 3. Term. This AGREEMENT shall start on the date indicated above and shall terminate on December 31, 2020 regardless of starting date unless terminated earlier in accordance with Section 9 or 10 of this AGREEMENT. The AGREEMENT will have one (1) two-year extension period until December 31, 2022 exercisable by a writing executed by the City Manager and City Attorney's Office with the approval of OPERATOR. 4. Business License Reauired. A valid City of Santa Ana Business License is required for all persons engaged in transacting and carrying on any commercial cannabis business activity in the City of Santa Ana. It is unlawful for any person or legal entity to commence, transact or carry -on cannabis business activity in the City of Santa Ana without first having procured a City of Santa Ana cannabis business license. 5. Operatina Commercial Cannabis Business. OPERATOR shall not operate a commercial cannabis business authorized under the Santa Ana Municipal Code unless: A. It is the holder of a valid Regulatory Safety Permit issued by CITY in accordance with the procedures and requirements of Article 1 of Chapter 40, of the Santa Ana Municipal Code; and B. At such time as the State of California requires cannabis business facilities and businesses to hold a valid license or permit issued by the State of California, it also holds such license or permit; unless, however, such permit or license is subsequently not required by the State of California for the type of cannabis facility or business operation that is the subject of this AGREEMENT. C. OPERATOR remains in compliance with any and all other laws and regulations pertaining to commercial cannabis businesses. D. OPERATOR shall remain in compliance with the operating requirements applicable to commercial cannabis businesses contained in the City's Municipal Code. 6. OPERATOR Indemnification of CITY. A. OPERATOR will indemnify CITY from any claims, damages, injuries, or liabilities of any kind whatsoever sustained or incurred by CITY resulting from entering into this AGREEMENT, and OPERATOR's performance and/or breach of this AGREEMENT. B. OPERATOR agrees to defend, at its sole expense, any action against CITY, its agents, officers, and employees related to this AGREEMENT. OPERATOR agrees to indemnify and reimburse CITY for any court costs and attorney fees that CITY may be required to pay as a result of any legal challenge related to this AGREEMENT and/or CITY's approval of a Regulatory Safety Permit. 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. 7. OPERATOR Compliance with Laws. OPERATOR agrees to comply with the City of Santa Ana Charter and Municipal Code, including but not limited to Chapters 18, 21 and 40, and the laws and regulations of the State of California. 8. Default and Termination for Cause. This AGREEMENT may be terminated by CITY for cause with thirty (30) days' written notice to OPERATOR. Cause as used in this section, is defined as: A. Failure to comply with the terms of the City of Santa Ana Cannabis Regulatory Safety Permit issued to OPERATOR by CITY; B. Failure of OPERATOR to maintain a valid active City of Santa Ana Business License as the commercial cannabis business approved by the Regulatory Safety Permit and as operating; C. Failure of OPERATOR to comply with the requirements of the Community Benefits and Sustainable Business Practices Plan; D. Unauthorized transfer by OPERATOR of the City of Santa Ana cannabis business Regulatory Safety Permit issued by CITY; E. Failure by OPERATOR to accurately report gross receipts information or other data necessary for CITY to calculate/confirm operating agreement fees; F. Failure by OPERATOR to pay operating agreement fees and related reimbursement costs within thirty (30) days of the date those fees are due; G. Failure by OPERATOR to cooperate with CITY or CITY's authorized agents in any inspection, examination and audit of OPERATOR's commercial cannabis business books and records (including tax filings and returns). H. OPERATOR shall cure the default resulting from the cause for termination within thirty (30) days of the date of the notice of termination. If OPERATOR fails to cure the default within thirty (30) days of the date of the notice of termination for cause, this AGREEMENT will be terminated. I. This AGREEMENT will automatically terminate if: i. OPERATOR's Regulatory Safety Permit is revoked by CITY or is not renewed by CITY, or ii. OPERATOR transfers its Regulatory Safety Permit pursuant to Santa Ana Municipal Code section 40-12. 9. Termination Without Cause. Upon mutual written agreement of the Parties, this AGREEMENT may be terminated with thirty (30) days' notice. 10. Termination - Effect on Prior Obligations. Upon any termination of this AGREEMENT, OPERATOR's obligation to report and remit operating agreement fees due and payable under the terms of this AGREEMENT for each month or fraction of a month of a cannabis business operation engaged in within the City of Santa Ana prior to termination of this AGREEMENT shall continue to be in effect. Past due penalties and late interest charges shall continue to accrue and be applicable until all operating fees due under this AGREEMENT are paid in full. OPERATOR's liability for any remaining unpaid past due penalties and/or late interest charges shall continue until fully satisfied. 11. Remedies. A. It is acknowledged by the parties that CITY would not have entered into this AGREEMENT if it were to be liable in damages under this AGREEMENT, or with respect to this AGREEMENT or the application thereof, except as hereinafter expressly provided. B. Each of the parties hereto may pursue any remedy at law or equitable relief available for the breach of any provision of this AGREEMENT, except that CITY shall not be liable in monetary damages, unless expressly provided for in this AGREEMENT. C. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Orange County California before three arbitrators. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures pursuant to JAMS' Streamlined Arbitration Rules and Procedures. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. 12. Reimbursement Clause. In consideration of the time and costs incurred by CITY in the drafting and implementation of this AGREEMENT, OPERATOR agrees to pay $2,500 to CITY within thirty (30) days of execution of this AGREEMENT. 13. Attorney Fees and Costs. 0 In any action or proceeding between CITY and OPERATOR brought to interpret or enforce this AGREEMENT, or which in any way arises out of the existence of this AGREEMENT or is based upon any term or provision contained herein, the "prevailing party" in such action or proceeding shall be entitled to recover from the non -prevailing party, in addition to all other relief to which the prevailing party may be entitled pursuant to this AGREEMENT, the prevailing party's reasonable attorneys' fees and litigation costs, in an amount to be determined by the court. The prevailing party shall be determined by the court in accordance with California Code of Civil Procedure Section 1032. Fees and costs recoverable pursuant to this Section 17 include those incurred during any appeal from an underlying judgment and in the enforcement of any judgment rendered in any such action or proceeding. 14. Notice. Any notice, tender, demand, delivery, or other communication pursuant to this AGREEMENT shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this section, to the following persons: To CITY: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 Fax 714-647-6956 Copies to: Executive Director — Planning and Building Agency City of Santa Ana 20 Civic Center Plaza (M-20) P.O. Box 1988 Santa Ana, California 92702-1988 Fax 714-973-1461 City Attorney City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702-1988 Fax 714-647-6515 To OPERATOR: Jeffrey Meng The 10 Spot, Inc. dba The Spot 2700 S Shannon St Santa Ana, CA 92704 Tel (562) 822-8316 Email jay@highergradeventures.com A party may change its address by giving signed notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax or email document 5 attachment, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays, or City Hall closure dates shall be excluded. 15. Exclusivity and Amendment. This AGREEMENT represents the complete and exclusive statement between CITY and OPERATOR, and supersedes any and all other agreements, oral or written, between the parties. This AGREEMENT may not be modified except by written instrument signed by CITY and by an authorized representative of OPERATOR. Each party to this AGREEMENT acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 16. Assianment. OPERATOR may not assign or transfer any interest herein without the prior written consent of CITY and any such assignment or transfer without CITY's prior written consent shall be considered null and void. 17. Discrimination. OPERATOR shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, disability, gender identity, gender expression, medical condition, genetic information, military or veteran status. as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. OPERATOR affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local labor laws and regulations. 18. Jurisdiction -Venue. This AGREEMENT has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this AGREEMENT shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this AGREEMENT. 19. Severability. If any part of this AGREEMENT is found to conflict with applicable local or state laws or regulations, such part shall be inoperative, null and void insofar as it conflict with said laws or regulations, or may be modified or suspended as may be necessary to comply with any local or state law or regulation but the remainder of the AGREEMENT shall continue in full force and effect. 20. Counteroarts. This AGREEMENT may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this AGREEMENT may be by actual, facsimile or electronic signature. 21. Disclaimer. Despite California's commercial cannabis laws and the terms and conditions of this AGREEMENT or any Regulatory Safety Permit issued pertaining to OPERATOR or the hereinabove specified property location, California commercial cannabis cultivators, transporters, distributors, cannabis testing facility/laboratory businesses or possessors may still be subject to arrest by state or federal officers and prosecuted under state or federal law. The Federal Controlled Substances Act, 21 USC § 801 at. seq., prohibits the manufacture, manufacturing, and possession of cannabis without any exemptions for medical or non -medicinal use. 22. Authority to Bind. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this AGREEMENT, and shall indemnify CITY fully, including reasonable costs and attorney's fees, for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. -Signature Page Below- IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT the date and year first above written. ATTEST: CITY OF SANTA ANA DAISY GOMEZ%,> lark of the Council City KRISTINE RIDGE - APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney By: —' �-_- 4 e^�— Lisa Storck Assistant City Attorney ED FOR APPROVAL: s Minh Thai, Executive Director Planning & Building Agency OPERATOR LEGAL NAME: Jeffrey F. Meng _ SIGNATORY NAME: Jeffrey F. Meng TITLE: CEO A"re B-95-1042 ign EXHIBIT A COMMUNITY BENEFITAND SUSTAINABLE BUSINESS PRACTICES PLAN 10 Spot, Inc. is passionately dedicated to serving the communities in which we operate and has existing plans in place for each of Santa Ana's community merit categories. The marketing strategy and pricing model alone, provide community benefits. 10 Spot does this by promoting $10 for any 1/8 of flower you purchase, on your first 3 visits to the store. Normally that 1/8 would cost the consumer anywhere from $40 - $60, so the savings is drastic, and goes right back in the pocket of the customers. We place a very high value on local hiring, support a variety of youth programs, and have a proven track record of "greening" our facilities and business practices. In Santa Ana, we will focus on hiring potentially disadvantaged community members, especially those with no prior skills training and veterans. 10 Spot, Inc. looks very much forward to putting down deep roots in the Santa Ana community though civic engagements, collaboration with the city on community improvement efforts, financial assistance to youth outreach programs, and green initiatives. LOCAL HIRING PLAN & LABOR EXPERIENCE At 10 Spot, Inc., our principals hold an unwavering commitment to providing more than just jobs; our labor and employment missions is to spring -boarding careers, offer highly competitive wages and benefits, promote and facilitate employee educations, and generally shepherd the wellbeing, longterm growth, and prosperity of our employees, their families, and the greater communities in which we operate. Aaron Friesen, 10 Spot Inc. Compliance Manager, has a 50% record of hiring employees from Santa Ana at Orange County Collision —a business he has been operating for 20 years —and a 90% local hire rate if neighboring cities are included. The many benefits of hiring locally as an employer cannot be overstated and has an obvious net positive effect on the community's local economy. We commit to continuing to hire locally and will set our goal at hiring 100% locally. 10 Spot, Inc. proposes 15-20 new employment opportunities for various levels of experience at this facility, including at least 8-11 entry level positions requiring no prior experience in horticulture or the cannabis industry. aaes and Benefits Part of our commitment to fostering a culture that allows employees to thrive personally and professionally is that idea that every employee deserves a living wage, appropriate to the economy of the region. Benefits that keep people healthy and financially solvent, such as health insurance, are also part of this philosophy, and will also be offered to all full-time employees. 10 Spot, Inc. will offer entry level employees an annual salary of 50% above the minimum wage, in addition to benefits like healthcare coverage, paid time off, and tuition reimbursement. We feel that entry level positions that provide personal and financial stability are badly needed in a community like Santa Ana, where 17% of the population lives below the poverty line. 10 Spot, Inc. will provide needed community benefits as a local employer by offering competitive wages and benefits at all employment levels. Trainina and Continuina Educ 10 Spot, Inc. holds a vested interest in offering employee education opportunities. We invest heavily in our staff, and our management is dedicated to offering mentorship and job -related training in general business practices, cannabis retail regulatory compliance, cannabis products, and other aspects specific to the cannabis industry. Well -trained staff keep our business running optimally and give us the opportunity to expand locally and beyond. Novice Manager Training Program: General Manager, Buyer, and Compliance Tracks For employees who show great interest and aptitude in cannabis business management, 10 Spot, Inc. will offer a Novice Manager Training Program. Divided into three tracks (Novice General Manager Training, Novice Buyer, and Novice Compliance Manager), our trainees will be rigorously trained and expected to learn and execute on a highly professional level. Trainees in the program will become wholly familiar with critical operations such as product sourcing and quality assurance; inventory control; employee management; licensing requirements and regulatory compliance; safety and security; and sales and merchandising. The Novice Manager Training Program will strive to produce individuals who are able to expertly handle day-to-day operations, problem solve, and set the bar for the industry for operational excellence and legal compliance. We believe that individuals who complete our Novice Manager Training Program will become invaluable assets not only to us, or even to the cannabis industry, but to the Santa Ana community as upholders of the law and business excellence. 10 Spot Inc. is committed to providing a healthy work environment for all of its staff, and one that they can flourish in and create careers. Part of our commitment to our staff and the city/ state regulations is shown through the executed labor peace agreement we have signed with UFCW. UFCW provides an opportunity for stability, good benefits and job growth for our staff, and we are glad to have started the process of forging a partnership with UFCW. COMMUNITY BENEFIT, PUBLIC ENGAGEMENT, & YOUTH PROGRAMS Aaron Friesen: Community Involvement and Investment History Aaron Friesen has been an active member of the local community for over 20 years, supporting youth initiatives, getting directly involved with community youth by coaching youth sports, and cooperating with and contributing to Santa Ana law enforcement agencies. Orange County Collision, a sustainable and compliant Santa Ana business owned and operated by Aaron, has a 20-year history of local hiring practices in Santa Ana, and has sponsored multiple local youth sports teams. Mr. Friesen generously donates his time to volunteer as a youth Soccer Coach for the Santa Ana Soccer program. As a US Soccer Federation "D" Licensed coach, and as a mentor to his young athletes, Mr. Friesen makes a valuable contribution to the athletic and personal development of the City's youth. Mr. Friesen is a man of the law and has a heartfelt appreciation for Santa Ana's law enforcement offices. Mr. Friesen also has a long history of supporting local Santa Ana law enforcement and affiliated organizations. He donates to and participates annually in the Association of Orange County Deputy Sheriffs Memorial Golf Tournament to help raise funds for the surviving families of fallen sheriffs and peace officers. In 1999, he helped Santa Ana Police Department and the FBI with "Operation Orion," which was one of the biggest anti -gang sweeps in Orange County history. By helping to convert a van into a disguised surveillance vehicle with custom battery mounts and a disguised exterior, Mr. Friesen's work had a direct impact on the success of the operation. The wall art appreciation gift from Santa Ana Police Department is still proudly displayed in the Orange County Collision front office. Community Partnerships Jeff has always been a big promoter of community partnerships no matter where he worked. This has shown through in the Kush Bottles culture. Proof of this is shown in the donation made on 2/15/18 of $5,000 to Habitat for Humanity of Orange County. The 10 Spot, Inc. continues to carry the belief that supporting the community you do business in, can only be a benefit for the business and its customers. For that reason, 10 Spot, Inc. will be partnering with the community to promote good will, education, community revitalization, and economic growth. They will also continue a pricing model similar to the 10 Spot dispensary, where they provide savings opportunities to their clients, that no one else can compete with (Appendix 20: Commitment of $5,000 to Habitat to Humanity). Youth Programs Part of the 10 Spot, Inc. philosophy is that the longest -term investments pay out the best dividends, not only in financial matters, but in matters of human capital and investment. For this reason, we plan to partner with and make donations to these and other local Santa Ana community organizations supporting youth education and development: Child Creativity Lab We at 10 Spot, Inc. will partner with the Child Creativity Lab, an organization whose mission is to use reclaimed materials to empower the next generation of critical thinkers and innovators. They offer a variety of STEM -based workshops for children, teens, and educators that are hands-on and engaging. They also provide STEM -based outreach programs to schools, libraries, places of worship, and more via the CCL Museum -on -Wheels. 10 Spot, Inc. is excited to join the ranks of other local businesses by donating much needed classroom materials to the Child Creativity Lab, aiding them in their mission to foster hands-on creativity, education, and exploration among the citizens of Santa Ana. In addition, we at 10 Spot, Inc. will invest in the development of business and the sciences through the sponsorships of scholarships for students from diverse demographic backgrounds. With these initiatives, we hope to provide the young adults of Santa Ana with the skills and knowledge necessary to pursue their career goals, as well as stoking their curiosity in science and STEM fields. This will create short-term opportunities for the residents of Santa Ana as well as long-term growth for the community as a whole. 11 Santa Ana Promise Program at Santa Ana College The mission of Santa Ana Promise is to promote academic achievement and college attendance for students who attend high schools in the city of Santa Ana. The organization's primary focus is removing barriers between Santa Ana students and college matriculation. Students participating in the program receive guaranteed financial support for pre -transfer study at Santa Ana College; the opportunity to enroll in academic learning communities at Santa Ana College; and guaranteed access to college English and Math courses, including the college's Early Assessment Program for placement in college level Math and English classes. 10 Spot, Inc. is honored to partner with Santa Ana Promise, and we pledge to provide financial and scholarship support via donations and scholarship drives. Residents Having a positive, continual touch points with the residents of the communities where we operate is a cornerstone of our operations. 10 Spot, Inc. will assist a variety of local non-profit organizations focused on improving the lives of Santa Ana residents, especially disadvantaged residents like those living below the poverty line, underserved youth, victims of domestic violence, veterans, and the homeless. Mercy House 10 Spot, Inc. will also be partnering with the Mercy House, a faith -based organization dedicated to providing a safe, peaceful place for single pregnant women to get the support and shelter they need. Each woman is provided with complete prenatal, labor and delivery, and postpartum care from their midwives and doctors, as well as counseling to navigate any family issues or spiritual concerns. The Mercy House also offers life skills training courses so that these women can provide a stable, wellness -focused home for their infants going forward. We at 10 Spot, Inc. will provide regular volunteers and other financial support in order to invest in the women and families of Santa Ana. Veterans First OC We at 10 Spot, Inc. will be fighting homelessness in Santa Ana by assisting Veterans First OC, t nonprofit organization dedicated to providing services and shelter to the veterans of Orange County. They are hoping to open another shelter to meet the desperate need of local veterans, including a house exclusively for female veterans and their children, and we at 10 Spot, Inc. look forward to providing them with the financial support necessary to aid them in their goals. Our veterans are our heroes, and we are honored to do our part to mitigate the disproportionate rate at which they suffer from homelessness and unemployment. Law Enforcement To continue in Mr. Friesen's tradition of supporting law enforcement organizations and initiative, 10 Spot, Inc. hopes to develop a close working relationship with the Santa Ana Police Department. The SAPID is an essential resource in keeping businesses and customers like ours safe in Santa Ana and assisting such businesses in understanding compliance issues. We hope for a partnership between the SAPID and 10 Spot, Inc. that will ensure the safety of not only our business and customers, but help develop programs that will ensure the safety of the Santa Ana community and help support initiatives that educate about and enforce cannabis retail laws and regulations. Additionally, we plan to take advantage of opportunities to help the City's youth available through the SAPD, such as sponsoring scholarships awarded through the Department. 12 We will also continue to support and enhance Mr. Friesen's commitment to Sherriff's Department initiatives, including the Association of Orange County Deputy Sheriffs Memorial Golf Tournament that helps raise funds for the surviving families of fallen sheriffs and peace officers. We intend to make a significant donation to this cause in 2019. SUSTAINABLE BUSINESS & BUILDING PRACTICES 10 Spot, Inc. is firmly committed to ongoing environmental stewardship as part of our overall commitment to healthier customers and communities. Our commitment to sustainable business practices is evidenced by our green facilities efforts, sponsorship of community green spaces, and cutting -edge cannabis industry sustainability practices both in our own operations and in our partners and associates who provide the products we sell. We work with organically grown and sourced products, and will focus considerable resources on the sustainability and strength of our local community environment. Environmental Groups 10 Spot, Inc. will partner with California Greenworks, Inc., a registered 501 non-profit organization that promotes environmental protection and community revitalization throughout the urban centers of southern California. Their mission is to protect and improve the environment through environmental clean-up, community education and revitalization, and environmentally sustainable economic growth. The environmental impact of cannabis business is a concern for our organization, and we hope to help offset some of our carbon footprint from transportation of product to our facility through this partnership to protect local watersheds, develop Earth -friendly educational programs throughout Santa Ana, and support a variety of local green initiatives. We would also like to leverage this partnership directly to execute green - space projects in Santa Ana, providing long-term environmental benefits and immediate opportunities for enjoyment of healthy spaces for many Santa Ana residents. Green revitalization efforts not only create green jobs, but create spaces around which other community initiatives can be organized and initiated. Inviting green spaces also promote foot traffic, which offers a direct benefit to local business, and has the potential to reduce vehicle use and therefore carbon emissions. Santa Ana is one of the earliest adopters of adult -use recreational cannabis retail in the State, and it is therefore a proving ground for the potential benefits of such businesses to the environment and to communities as a whole. We look forward to demonstrating the best results of community collaborations with retail cannabis business, and to modeling a way of operating that supports sustainability and environmental stewardship at both the local and global levels. Other Environmental and Sustainability Efforts The marijuana industry is growing exponentially but is still in the early phases in the court of public opinion. One way in which 10 Spot, Inc., will demonstrate goodwill and community benefits to the public is by creating a sustainable operation and working to obtain LEED certification. LEED is the gold standard by which commercial facilities are evaluated for environmental stewardship. but still working to establish a reputation for itself. By obtaining LEED certification, supporting the Santa Ana City Council's green initiatives through donations and volunteer efforts, and strictly adhering to all federal, state, and local sustainability and 13 environmental protection regulations, we contribute to a positive reputation for our industry as upholders of the highest standards and stewards for the environment. In our third -party relationships, we have a proven track record of working with cultivators, manufacturers, and distributors that actively work to minimize their carbon footprint and other environmental impacts. The same will be true for building materials and construction contractors that we use at our Santa Ana facility. We will buy materials locally and use local Santa Ana vendors whenever possible for everything from construction materials to office supplies. This not only serves the direct economic interest of the community, but also minimizes the carbon emissions associated with transporting goods over long distances. 10 Spot, Inc. will take a leadership role in the retail cannabis sector on a city-wide level by being an active member in and helping to expand the local cannabis retailers' association, Santa Ana Cannabis Association (SACA). SACA will function in part as a local think-tank for the industry, where information, techniques and solutions can be devised and shared to reduce environmental impact from the industry and create positive impacts in general. Environmental and community improvements and initiatives can be significantly enhanced and expedited by pooling knowledge of respected and experienced members of the local industry. 10 Spot, Inc. welcomes the opportunity to work closely with the City of Santa Ana and its organizations and community members to establish sustainable environmental practices and overall practices that benefit the communities in which we operate for the entire industry. IM,