HomeMy WebLinkAboutPHIRE LABORATORIES AND DISTRIBUTION, INC. DBA PHIRE LABORATORIES OR PHIRE LABSA-2017-402
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FEB 222021 ;� UNU
OPERATING AGREEMENT FOR NON -RETAIL
P49 (Ali VtMVIVP64r)(&W5 COMMERCIAL CANNABIS BUSINESSES
This Operating Agreement ("AGREEMENT') is dated February 2021, between the
City of Santa Ana, a charter city and municipal corporation ("CITY") and Phire
Laboratories and Distribution, - Inc. DBA Phire Laboratories or Phire Labs ("OPERATOR"),
collectively referred to as 'the Parties". This AGREEMENT shall become effective on the
date that OPERA TOR is issued a Regulatory Safety Permit by CITY for the operation of a
commercial cannabis business conducting ADULT -USE AND MEDICINAL
VOLATILE AND NON-VOLATILE MANUFACTURING, AND DISTRIBUTION services
in whole or in part of its operations transacted and carried -on by OPERATOR at the
following subject property location, 3132 W Adams St, Santa Ana, CA 92704.
1. 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
and commitments as a condition of renewallextension of this AGREEMENT upon expiration
of the initial term and any extension
2. ecords Inspection Examination and Audit
to inspect, examine and;aud
returns), to ascertain the ama
agents shalt have the power
audit of such books and race
Including .but not limited to, d
'hat CITY is empowered under this Agreement
s books and records (including tax filings and
ig fees due and owing♦ CITY or its authorized
to conduct ,a full inspection, examination and
ax filings and returns) at any reasonable time,
Business hours, in the event any such books,
ade'fully available withinthe City of Santa Aria,
OPERATOR acknowledges and agrees that It shall reimburse CITY for the cost of ali
transportation, lodging, meals, portal-to-portal travel time, and other Incidental Costa
reasonably incurred by CITY or its authorized agents In obtaining said full inspection,
examination and auolt. In the event that said records inspection, examination and audit
determines the t,a net operating agreement fee payment deficiency of greeter than Five
Percent (5%) exists; OPERATOR acknowledges and agrees that it shall reimburse CITY for
the full cost of said reoords inspection, examination and audit reasonably Incurred by CITY
or Its authorized acents
3. Itirm,
This AGREEMENT stuff start on the date indicated above and shall terminate on
DoPembor 31, 2022 regardless of starting date unless terminated earlier in accordance with
$action 9 or 10 of this AGREEMENT
4. Business License Required.
A valid Citv'of
is required for
the
the City of Santa Ana without first having procured a
6: Operi ting Cgnuxtercial Cannabis Business.
Im
OPERATOR shall not operate a commercial cannabis business authorized under the
Santa Ana Municipal Code unless:
A. It is the Yielder of a valid Regulatory Safety Permit issued by CiTY in accordance with
the procedures and requirements of Article I of Chapter 40, of the Santa .Aria
iviunicipal -Code; and
B: At such time as the State of Caiifornie requires cannabis business facilities and
businesses to hold a valid license or permit issued by the Mate of California, It also
holds such license or permit,, unless, however, such permit or license is subsequently
riot required by the State of California for the type of cannabis facility or business
operation that Is the subject of this AGREEMENT.
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C. OPERATOR remains In compliance with any and ail other laws and regulations
pertaining to commercial cannabis businesses,
D, OPERATOR shall remaln in
to'comrharcial cannabis busi
G. 0PEMTga jpdemnIfication,of CIIX
A. OPERATOR w
any kind whets
AGREEMENT,
0
grees to defend, at its sole expense, any action against CITY, its
CITY for any court costs and attorney fees that CITY
as a result of any legal challenge related to this
s approval of a Regulatory Safety Permit. CITY may, at
e at Its own expense in the defense of any such action,
Y. OPERATOR Compliance with Laws
OPERATOR agrees to comply with the City of Santa Anna Charter and Municipal Code,
Including but not limited to Chapters 18, 21 and 40, and the laws and regulations of the
State of California.
S. 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,
C. Failure of OPERATOR to comply with the requirements of the Community Benefits
and sustainable Business Pracitces,Alan;
7 Unauthorized transfer by OPERATOR of the City of Santa Ana cannabis business
Regulatory Safety Permit issued by CITY
or other data
F. Failure by OPERATOR to pay operating, agreement fees and related reimbursement
costs within thirty (34) days of the date those fees are due,
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G. Failure by OPERATOR to cooperate with CITY orCIlys authorized agents In any
inspkfton, examination and audit of OPERATOR's commerrial 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. *fhi$,AQREEMENTMll automaboally terminate If
1, OPERATOR's Regulatory Safety Permit Is revoked by CITY or Is not renewed by
CITY, or
IL 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 Patties, this AGREEMENT may be terminated
with thirty (30) days' notice.
10, Termination Effect on Prior Obligations.
operating fees due under tr
remaining unpaid past due
salWftpd.
11, Reinedles.
nue to accrue and be applicable until all
r paid In full. OPERATOWs liability for any
a Interest charges shall continue until fully
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
reapeot 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. axnm.i that CITY qhnit not has
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W
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 CITYin the drafting and
implementation,of this AGREEMENT, OPERATOR agrees to pay J= to CITY within
thirty (30) days of execution of this AGREEMENT.
13, attorney Fees and C Is.
In any action or broce
with
14, Notice;
ling between CITY and OPERATOR brought to interpret or
or, which in any way arises out of the existence of this
be entitled pursuant to this
and litigation costs, in an
be determined by the court'
>n 1.032. Fees and costs
during any appeal from gin
idered In any such action or
Any notice, tender, demand, delivery, or other communication pursuant to this
AGREEMENT shall be In writing and shall be deemed tc be property 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
20V Civic Center Plaza (M-8p)
P.O. Box fm
Santa Ana, CA 92702-1988
Fax 714 Ei47-6986
Copies to: Executive Director— Planning and Building; Agency
City of Banta Ana
20 Civic Center Plaza (M-26)
P.0. Box 1988
Santa Ana, California 92702-1988
Fax 714-073-1461-
City Attorney
City 4f Santa Ana.
20 Civic Center Plaza{M-29)
P.O. Box T988
Santa Ana, California:827021988
Fax 714-64'7-6518
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To OPERATOR: Jaime Duenas
Phlre Labs
3132 W Adams St;
SANTA ANA, CA 92704
TeI(714)472.9710
Email Jd@phiredistro.com
A party may change its addressby giving signed notice in writing to the other party,
areafter, any communication shalt be addressed and transmitted to the new address, if
been
or
frames, weekends;
excluded,
15. Fxclusivity and Arp�ndment:
This AGREEMENT
OPERATOR, and supe
parties. This AGREEN
CITY and by an.authod
acknowledges that no
otherwise, have been m
not embodied herein.
16, Assfunment.
17, VjIscrimination:
0
CITY and
ween the
or
are
t e prior written
written consent
tTOR shall not discriminate because of race,, color, creed, religion, sex, marital
ial orientation, age, national origin, anoestryr,disability, ,gender identity, gender
medical condition, genetic information„ military or veteran status. as defined and
ly applicable law, In the recruitment, selection, training, utilization, promotion,
or other employment related activities. OPERATOR affirms that it Is an equal
employer and shall comply with all applicable; federal, state and local labor laws
18..lurisdiction-Venue:
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the State of California and the
any of the clauses of this
ws of the State of California.
i9 be the venue for any action
or.prdceeding that may be brought or arise out of, in connection with or by reason of this
AGREEMENT,
19, Severabitity,
20. Counterparts.
21» 01sclaimer.
.Despite Galff lnila's cornmercial cannabis laws and the terms and conditions of this
AGREEMENT or any Regulatory Safety Permit issued ;pertaining;.; to OPERATOR or the
hereinabove specified property legation, California commercial cannabis cultivators,
transporters, distributors, cannabis testing facility/labor tory 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
2. Authority off,, ElInd.
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 oosts and attorneys
fees, for any Injuries or damages toCITY, In the event that such authority or power is not, in
-si"pPaWre. gage Below
U
A-2017-402
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT the date and year
first above written.
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
By:
Jose on oya
Deputy City Attorney
RECOMMENDED FORAPPROVAL:
Minh Thai, Executive Director`
Planning & Building Agency
CITY OF SANTA ANA
KRISTINE RIDGD
City Manager
OPERATOR
LEGAL
NAME: Phire Laboratories and
Distribution Inc. dba Phire Labs
SIGNATORY
NAME: Jaime Duenas
TITLE: President
TAXPAYER ID: 3-157929 ==a
SIGNATUR
mm=
COMMUNITY BENEFIT AND SUSTAINABLE BUSINESS PRACTICES PLAN
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m
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Local Wiring and Procurement'
Our mission at phire labs is to hire So% of our workforce from within the City of Santa Ana and
specificatlytarget the following groups. Our hiring ads. will tar -get residents of Santa Ana and the
surrounding communities:
• Female Fmp:loyeesand Women Owned Business
0 The cannabis industry is; primarily dominated by the male: consumer. and brin
on women employees will help us angagewith'this group and seek valuable
o We will procure from local women awned business, Phire labs was built by
Slater Builders, a Women Owned General Construction comnanu.
IE
Ana
talent
o Besides hiring + minority employees; our goal is to also ensure we utilize services
from minority owned business. Our primary shareholders are.minoritles and'
have started several other; businesses In the City of Santa Ana,.
+ Veteran Employees
o Serving our country is one of the greatest honors and at Phlre we want to pay
back that honor by hiring veterans onto our team
o We have multiple veterans already on our staff and we will continue to hire
more local veterans,
Charitable Work
Phire
non -profits to
selected Non -Profits below. Our goal
for volunteer work and ph€lanthropys
r
• Santa lAna Police Department.
o Wearestrorrgsupport
+ iolleae 5cholarshia Fund
to help the
llty servite per employee per quarter to
city prosper antl be a pillar of the community
o Wewanttoprovide resources tofuture generations lot$antaAria'scornmunityTo
cN occhildreffs Hospital
o Phiretabs will donate resourcestoCHOCtohelp children In need ofcare tocombat
their illnesses
• Ronald McDonald House
o Phirewill proMeresourtestothe RvlHfoundation tohelp cbIldreninneed
o. Make A Wish Foundation
o We are proud tosupporttheMake AWish foundation to:bring children'swishestp
reality
Fia�SrtBt v/ Phoenix
for Hap
r, oU56
r.
4OSchoiarsh'ip Make,
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Environmental Practices
Energy Efficiency
AtPhire we believethat our building is one of the most energy efficient buildings in the City of
;Santa Ana. OurLED'lighting In the building will save = 0% in energy usage. Also, our building
operates,on anAutomated Logl&mBuiidingManagementSystem, whichinteliigentlysenses;
traffic to . perate HVAC, exhaust and Iightingsysterns.
Our motion sensing
Unoccupied rooms,
carbon footprint an
Use by turning off lights in
Wilding also uses
Recycling
Phlre Labs Intends to use minimal packaging In its products to reduce waste in the
envlronMent, We will also be launching a pilot program where our customers can recycle pods,
batteries; disposable.vape pens and farsat local Santa Ana dispensaries,
Efficient Delivery Fleet
Intension to move
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Employee Benefits.
Wages and Benefits
Mire Labs plans to offer a prevailing wage or higher to oil employees, Besides fulfilling living;
wage rerfuirornents within the ryfirst yearof operations, opr goal is to offer health, vision and:
dental benefits to, ell employees and employees with Six(6) months of -service wilI be eligible;
'for a401 retirement plan,
pdditlonpf Benefits
Besides a robust Ompensation and benefits package, Phire labswilI offer discounts on Mitts
products and merchandise to all its employees. Phire Labs will have ftnthly happy hours and
team building gatherings to celebrate company milestones..
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