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HomeMy WebLinkAboutBUD AND BLOOM, A MUTUAL BENEFIT CORPORATION-2017itu;)LlRANU- iWT, RECI'IAED A-2017-369-16 W011K MAY {-'FfOCEED CLERK OF COUNCIL i Dur: DEC; 2 0 2017 OPERATING AGREEMENT FOR ADULT USE (NON -MEDICINAL) CANNABIS RETAIL BUSINESS k. (o 1� December 26 7 This Operating Agreement ("AGREEMENT") is dated 201_ between the City of Santa Ana, a charter city and municipal corporation ("CITY") and Bud and7BI00m a Mutual Benefit Corporation ("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 operation of an adult -use cannabis retail business transacted and carried -on by OPERATOR at the following subject property location, 1327 E. Saint Gertrude Place , Santa Ana, California 92705 1. Public Benefit. A. Intent. The purpose of this Operating AGREEMENT is to collect fees for the operation of an adult -use cannabis retail business and to provide fees for 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 section 40-2(22). The Parties agree that this AGREEMENT confers substantial private benefits on OPERATOR which should be balanced by commensurate public benefits. As part of the adult -use cannabis retail business 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 as a result of the operating agreement fees collected. 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 adult -use cannabis retail business. 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 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. 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 renewaltextension of this AGREEMENT upon expiration of the initial term and any extensions. 2. Operatina Fee Rates for Adult -Use Cannabis Retail Business: Payment. For each month OPERATOR of the permitted "adult -use cannabis retail business" (as said term is defined in Chapter 40 of the Santa Ana Municipal Code) transacts and carries on adult -use cannabis retail business operations at the above-described property location permitted by CITY, OPERATOR shall pay an operating agreement fee monthly to CITY. The term "month" or "monthly" as used in this AGREEMENT shall refer to a calendar month and shall include any fraction of a calendar month as a whole month. Terms of payment of the operating agreement fee are as follows: A. OPERATOR's operating agreement fee shall begin to accrue on the date that CITY first issues OPERATOR an Adult -Use Cannabis Retail Regulatory Safety Permit and shall be paid to CITY by the last day of the month following the month for which it is due. B. OPERATOR shall pay CITY a monthly operating agreement fee which is the higher of the following two calculations: i. calculated at a rate of Eight Percent (8%) of the gross receipts generated or otherwise received; or, ii. calculated at an annual rate of Twenty -Five Dollars ($25.00) per square foot based on the gross square footage of OPERATOR's permitted property location (as confirmed by the corresponding "Approved Building Set" on file with City of Santa Ana Planning and Building Agency) prorated monthly to one -twelfth (1/12th) of the annual rate amount. C. OPERATOR shall calculate and report its monthly operating agreement fee based on both of the above calculations each month; remitting the higher amount to CITY. D. OPERATOR shall report its operating agreement fee calculations to CITY using the "Monthly Operating Agreement Reporting Form" set out in "Exhibit B" of this AGREEMENT which is hereby incorporated into this AGREEMENT by reference. 3. Operating Fees Not a Pass -Through Fee; Gross Receipts Defined. A. OPERATOR, as an adult -use cannabis retail business, shall not pass the operating agreement fees or any or any portion thereof through to the adult -use cannabis retail business' customer in any fashion except as part of the basic product sales and/or service price. B. For the purposes of this AGREEMENT, "gross receipts" shall mean any and all of the following: Transfer of title or possession, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration including any monetary consideration for adult -use (non -medicinal) cannabis, including, but not limited to, membership dues, reimbursements provided by members, regardless of form, or the total amount of cash or in-kind contributions, including all operating costs related to the growth, cultivation, manufacture, 2 distribution, testing, or provision of adult -use (non -medicinal) cannabis or any transaction related thereto; • Anything else of value obtained by an adult -use cannabis retail business; • The total amount of the sale price of all sales; • The total amount charged or received for the performance of any act, service or employment of whatever nature it may be, whether or not such service, act or employment is done as a part of or in connection with the sale of goods, wares, merchandise, for which a charge is made or credit allowed, including all refunds, cash credits and properties of any amount or nature; • Any amount for which credit is allowed by the seller to the purchaser without any deduction therefrom, on account of the cost of the property sold, the cost of materials used, the labor or service cost, interest paid or payable, losses, or any other expense whatsoever; provided that cash discounts allowed or payment on sales shall not be included; • The amount of any federal, manufacturer's or importer's excise tax included in the price of property sold, even though the manufacturer or importer is also the retailer thereof and whether or not the amount of such tax is stated as a separate charge. C. "Gross receipts" shall not include the following: • The amount of any federal tax imposed on or with respect to retail sales whether imposed upon the retailer or the consumer and regardless of whether or not the amount of federal tax is stated to customers as a separate charge. • The amount of any California state excise tax or state cultivation tax regardless of whether or not the amount of such excise tax or cultivation tax is stated to customers as a separate charge, or any California state, city or city and county sales or use tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser, or such part of the sales price of any property previously sold and returned by the purchaser to the seller which is refunded by the seller by way of cash or credit allowances given or taken as part payment on any property so accepted for resale; or • The amount of medicinal cannabis (medical marijuana) sales and related services generated or otherwise received in the event that OPERATOR is both a permitted medical marijuana collective/cooperative business as well as a permitted, co -located adult -use (non -medicinal) cannabis retail business operating at the same property location. • The amount of the sale price of all medical marijuana goods, wares, merchandise, and other related services sold or otherwise generated in connection with operation of a co -located medical marijuana collective/cooperative business. • The amount of the sale price of business personal property (all property owned or leased by OPERATOR used in the operation of the adult -use cannabis retail business, including but not limited to: furniture, fixtures, and business equipment); real property, including land, buildings and other improvements. 3 • The amount of equity contributions, investments, and/or loan proceeds to OPERATOR's adult -use cannabis retail business operation, and/or proceeds from the sale or transfer of OPERATOR's adult -use cannabis retail business. D. "Gross receipts" shall be calculated without any deduction on account of any of the following: • The cost of tangible property sold or bartered; • The cost of materials or products used, labor or service cost, interest paid, losses, or other expense; or • The cost of transportation of the adult use (non -medicinal) cannabis, or other property or product. 4. Remittance and Reporting. Beginning as set forth above and monthly thereafter, OPERATOR shall report and remit payment to CITY of the applicable operating agreement fee set forth in Section 2 of this AGREEMENT. OPERATOR shall report to CITY any gross receipts received during the preceding monthly reporting period and shall remit to CITY on or before the last day of the month following the operating agreement fee due and owing during said period as applicable in accordance with Section 2 of this AGREEMENT. When the last day of the month falls on a City Holiday or City Hall Closure Day then the reporting/remittance date shall fall on the next City business day following. The operating agreement fee shall be acknowledged and agreed by CITY to be paid timely if paid on said date. When reporting/remitting is made by mail, the postmark date shall serve as proof of timely reporting/remittance. 5. 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. LI 6. Past due date — Past due penalty; Late interest. A. Any OPERATOR entity or individual who fails to pay the operating agreement fees required by this AGREEMENT when due shall be subject to past due penalties and interest as set forth herein. OPERATOR shall be considered past due if the required monthly operating agreement fee is not paid by the last day of the month following the month for which it is due. ii. For failure to fully pay any monthly fee when due, the following past due penalty and late interest charges shall be added to the unpaid balance amount owing: 1) A past due penalty of Twenty -Five Percent (25%) per month; 2) A late interest charge of One and One Half Percent (1.5%) per month added to the unpaid balance amount owing, inclusive of any prior past due penalty or late interest charges accrued. B. CITY is not required to send a past due notice or other bill or invoice to OPERATOR, or any other person subject to the provisions of this AGREEMENT and failure to send such notice, bill or invoice shall not affect the validity of any operating fee, late penalty or late interest charge due under the provisions of this AGREEMENT. 7. 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 12 or 13 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. 8. Business License Required. A valid City of Santa Ana Business License is required for all persons engaged in transacting and carrying on any adult -use cannabis retail business activity in the City of Santa Ana. It is unlawful for any person or legal entity to commence, transact or carry -on adult -use cannabis retail business activity in the City of Santa Ana without first having procured a City of Santa Ana adult -use cannabis retail business license. 9. Operating Adult -use Cannabis Retail Business. OPERATOR shall not operate an adult -use cannabis retail 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 adult -use cannabis retail 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 commercial 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 including adult -use cannabis retail businesses. 10. 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. 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. 11. OPERATOR ComDliance 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. 12. 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 Adult -Use Cannabis Retail Business Regulatory Safety Permit issued to OPERATOR by CITY; B. Failure of OPERATOR to maintain a valid active City of Santa Ana Business License as an Adult -Use Cannabis Retail Business (Adult -Use Cannabis Retailer); C. Unauthorized transfer by OPERATOR of the City of Santa Ana Adult -Use Cannabis Retail Business Regulatory Safety Permit issued by CITY; D. Failure by OPERATOR to accurately report gross receipts information or other data necessary for CITY to calculate/confirm operating agreement fees; E. Failure by OPERATOR to pay operating agreement fees and related reimbursement costs within thirty (30) days of the date those fees are due; 0 F. Failure by OPERATOR to cooperate with CITY or CITY's authorized agents in any inspection, examination and audit of OPERATOR's adult -use cannabis retail business books and records (including tax filings and returns). G. 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. H. 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. 13. Termination Without Cause. Upon mutual written agreement of the parties this AGREEMENT may be terminated with thirty (30) days notice. 14. 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 adult -use cannabis retail 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. 15. 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 binding arbitration of 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. Such matter shall be determined by binding arbitration in Orange County California before three (3) arbitrators. The binding 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 to aid arbitration from a court of appropriate jurisdiction. 16. Reimbursement Clause. In consideration of the time and costs incurred by CITY in the drafting and implementation of this AGREEMENT, OPERATOR agrees to pay ja,500 to CITY within thirty (30) days of execution of this AGREEMENT. 17. Attorney Fees and Costs. 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. 18. 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: Bud and Bloom Attn: Aaron Herzberg 1327 E. Saint Gertrude 21ace Santa Ana, CA 92705 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 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. 19. 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. 20. Assignment. 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. 21. Discrimination. OPERATOR shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, 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. 22. 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. 23. 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. 24. Counterparts. 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. 26. 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, 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 et. seq., prohibits the manufacture, distribution, and possession of cannabis without any exemptions for medical or non -medicinal use. 26. 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 follows} 10 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: �1 Lisa rck Assistant City Attorney RECOMMENDED FOR APPROVAL: Candida Neal, Interim ExecutiDirector Planning & Building Agency 11 CITY OF SANTA ANA RAUL GODINEZ City Manager OPERATOR LEGAL NAME: SIGNAL NAME: TITLE: TAXPAYER ID: 47-5347742 CALIFORNIA ALL- PURPOSE CERTIFICATE OF ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California } County of On �` &Me )R C aft go Iq before me, K. cnboc) (,am nae name and or mo onicer personally appeared yy �Q Vic, Xz 8 who proved to me on the basis of satisfactory evidence to be the person(s) whose name( Ware subscribed to the within instrument and acknowledged to me that t elshe/they executed the same inis her/their authorized capacity(les), and that by i07her/their signature( -on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. K.OLSON WITNESS my hand and official seal. (`14Mycwom.EobwAUWAT2*,2= Commission No. 2161706 3Ly NOTARY PUSLIGCALIfORN1ALOS ANGELES COUNTY Notary Public SI nature (Notary Public Seal) ADDITIONAL OPTIONAL INFORMATION INSTRUCTIONS FOR COMPLETING THIS FORM Tldsformcompltesivtth current California statures regarding notary wording and, DESCRIPTION OF THE ATTACHED DOCUMENT jneeded, should be completed and attached io the document. Acknowledgments from other states may be completed far documents being sent to that state so long n -I- .�! / O� as the wording does not require the California notary to violate California notary ' V 4 1�( lmv. �( iitltlre ado edpllon alta,,,,, Id do u 9 l • State and County information must be the State and County where the document signer(s) personally appeared before the notary public for acknowledgment. (Title or description of attached document continued) • Dale of notarization must be the date that the signer(s) personally appeared which must also be the same date the acknowledgment is completed, • The notary public must print his or her name as it appears within his or her Number of Pages _ Document Date commission followed by a comma and then your title (notary public). • Print the name(s) of document signers) who personally appear at the time of notarization. CAPACITY CLAIMED BY THE SIGNER • Indicate the correct singular or plural forms by crossing off incorrect forms (Le, ❑ Individual (s) he/she/they­is/ere)orcircling the correct forms. Failure to correctly indicate this information may lead to rejection of document recording. ❑ Corporate Officer •The notary seal impression must be clear and photographically reproducible, Impression must not cover text or lines, If seal impression smudges, re -seal if a 'Title) sufficientareapemrits, otherwise complete a different acknowledgment form. ❑ Partner(s) • Signature of the notary public must match the signature on file with the office of the county clerk. ❑ Attorney -in -Fact I- Additional information is not required but could help to ensure this ❑ Trustee(s) acknowledgment is not misused or attached to a different document. ❑ Other Indicate title or type of attached document, number of pages and date. Indicate the capacity claimed by the signer, If the claimed capacity is a corporate officer, indicate the title (i.e. CEO, CFO, Secretary). 2015 Version www.NotaryClasses.com 800-873-9885 • Securely attach this document to the signed document with a staple. EXHIBIT A Bud and Bloom Community Benefit and Sustainable Business Practices Plan Bud and Bloom is committed to giving back to the Santa Ana community and improving the lives of its residents, while minimizing its effect on the environment and creating sustainable business practices. As fully described below, Bud and Bloom holds numerous events throughout the year to educate and benefit the community, hires locally, and has implemented and plans to implement various green initiatives. The members of Bud and Bloom's Board of Directors started in vastly differing careers, all of which served their communities, including an attorney, an entrepreneur, a former teacher, and a former law enforcement officer. These directors and officers take the experiences serving their communities in their early careers and apply the lessons they learned to the work they do to operate Bud and Bloom and serve the community of the City of Santa Ana. Bud and Bloom's Board of Directors and Officers Aaron Herzberg, Director, President Biography: Aaron Herzberg is a strategist, attorney & entrepreneur specializing in the emerging cannabis industry in California. Herzberg was selected in 2015 as a Super Lawyer, a distinction that is limited to the top 5 percent of lawyers nationwide. He also is the recipient of an AV Preeminent® rating from Martindale - Hubbell. He is a founding Board member of the Nevada Cannabis Industry Association and has been appointed to serve on the City of Long Beach's Medical Marijuana Task Force. Aaron successfully operates r other licensed dispensary in Santa Ana, known as OC3. Chris Francy, Director, Vice President Biography: Chris Francy is a serial entrepreneur specializing in cannabis production and processing. Chris' first business, a computer components e- commerce retailer, landed at #104 on the 2004 Inc. 500 list of fastest growing companies. Chris was awarded the young entrepreneur award in 2012 from the U.S. Small Business Administration. Chris successfully operates r other licensed dispensary in Santa Ana, known as OC3. Chris is committed to improving the community, and to that end has recently made monetary donations to KidWorks and Santa Ana -based non-profit Orange County Housing Corporation. EXHIBIT A Bud and Bloom Community Benefit and Sustainable Business Practices Plan Jocelyn Rosenwald, Director, Secretary Biography: Jocelyn is the Director of Acquisitions and Asset Management for Beach Front Properties LLC. Since 2o16 Jocelyn has supervised the operations of AP Investment Fund, her first cannabis related venture, which raised $12.6 million. Jocelyn began real estate investment in zm3 and currently manages a $zoo million portfolio of opportunistic real estate investments. Before her career in real estate, Jocelyn taught both first grade and kindergarten in the South Bronx and Washington Heights in NYC for Teach for America. She helped found KIPP Star Elementary School through the Knowledge is Power Program (KIPP). Jocelyn's core value of caring for underprivileged children continues in her role as Director for Orinoco Foundation, which is dedicated to charitable donations for children in underserved populations. Kyle Kazan, Director Biography: Kyle is the President and Chief Executive Officer of BFP Management (BFPM) and Co -Founder and Managing Member of Beach Front Properties LLC (BFP). BFP is a Real Estate Investment Advisor to numerous Funds set up between 1996 and 2o13. BFPM is a property management firm which oversees operations in Multi -Family, Single Family, Retail and Office properties throughout the United States. Kyle is considered an expert in the repositioning of troubled assets, turning them into pride of ownership properties with high occupancy and above market rents. Prior to forming BFP and BFPM, Mr. Kazan spent five years in law enforcement where he garnered his expertise in gang and drug identification and eradication. In 2o16, Kazan co-founded AP Investment Fund, one of the nation's first funds to provide real estate acquisition and private debt servicing to cannabis related ventures. Kazan has appeared at several public speeches organized by Law Enforcement Against Prohibition(LEAP) as an outspoken advocate both in favor of the legalization of marijuana and against the war on drugs. Kyle is dedicated to serving cancer patients and serves as a Director for the Cancer Support Community of Redondo Beach. EXHIBIT A Bud and Bloom Community Benefit and Sustainable Business Practices Plan Bud and Bloom's Community Benefit Practices As part of its mission to serve the community and educate patients, Bud and Bloom offers multiple community outreach and education programs. Individual Patient Consultations Bud and Bloom's Individual Patient Consultations are an opportunity for community members to get educated on a one-on-one basis by a medical cannabis specialist. These specialists guide patients through what product(s), dosing and route of administration might be right for each patient. Community patients benefit greatly from these individual consultations, including those who are new to medical cannabis, senior citizens, and cancer and pain patients. Bud and Bloom provides the Individual Patient Consultations at no cost to community members. Senior Shuttle Bud and Bloom currently offers a free shuttle from Laguna Woods on a monthly basis. This program is designed to assist seniors with transportation and provide a social experience where seniors can shop in comfort with their peers. In 2o18, Bud and Bloom plans to expand the free shuttle services to other senior communities, including senior communities in Santa Ana, if feasible. Community Education and Support Seminars As part of its mission to serve and educate the community, Bud and Bloom organizes education and support seminars in local communities and at the Bud and Bloom event space. These educational seminars are provided at no cost. For example, one in-house educational group is the monthly Medical Marijuana and Pain Education and Support Group hosted through Meetup.com. At this support group, pain patients are welcome to attend and hear from guest speakers, ask questions and share personal experiences. Bud and Bloom also hosts support group meetings for the Veterans' group "Tactical Patients," which provides education and support to local veterans. Community Events and Charitable Work: Bud and Bloom is active in community sponsored events. For example, Bud and Bloom participates annually in OC Pride parade. Bud and Bloom also contributes to the community by sponsoring an annual holiday toy drive for local children in need, which is currently ongoing and will benefit the Orangewood Foster and Youth Services Center in Santa Ana. Bud and Bloom will be co -hosting its first annual warm clothing drive for Santa Ana homeless in January 2o18 in conjunction with the Tactical Patients Veteran support group. EXHIBIT A Bud and Bloom Community Benefit and Sustainable Business Practices Plan Community Employer. Bud and Bloom is committed to hiring within the Santa Ana community and has hosted several local job fairs within the community with the intention of hiring Santa Ana residents, including most recently on December 18, 2017. Bud and Bloom currently employs four Santa Ana residents, and is in the process of interviewing numerous other Santa Ana residents. In addition, Bud and Bloom's director and treasurer, Chris Francy, is a Santa Ana resident. Bud and Bloom is also committed to enriching its employees' careers and lives. Bud and Bloom provides extensive training regarding cannabis, and provides employees with access to vendors for training regarding products sold at Bud and Bloom. Over the next year, Bud and Bloom plans on holding seminars for its employees on various additional topics to enrich its employee's careers, including a seminar on cannabis law and compliance, and a seminar on harassment in the workplace. More information and links can be found at http://budandbloomoc.com/commup�_oqtiLeacli EXHIBIT A Bud and Bloom Community Benefit and Sustainable Business Practices Plan Bud and Bloom's Sustainable Business Practices As part of its mission to minimize its impact on the environment, Bud and Bloom is committed to sustainable business practices. Since opening, Bud and Bloom has implemented various green initiatives, and has plans to implement more initiatives in 2oi8. Current Green Initiatives Most recently, Bud and Bloom started a recycling initiative. All employees are required to separate all waste into recycling bins, which are dropped off at a recycling center monthly (or more often as needed). Bud and Bloom employees are also encouraged to re -use whenever possible, and to minimize waste. Bud and Bloom also provides filtered water to its employees to discourage bottled water waste, and uses cloud storage to minimize paper waste. Bud and Bloom has also implemented energy efficient lighting and appliances. The location uses LED lighting. The air conditioning is energy-efficient, and the location is insulated for additional efficiency. Further, all power sources use smart power strips. Bud and Bloom also provides a free monthly shuttle for patients from Laguna Woods, saving individuals from driving to the location. New Green Initiatives for 2o18 In 2oi8, Bud and Bloom plans to expand its environmental initiatives. Bud and Bloom plans to study the feasibility of a carpool or clean vehicle use plan for employees, including incentives such as a preferred parking spot and employee recognition. Bud and Bloom is also considering a beach clean-up day, in which employees and local customers would be incentivized to volunteer to clean up a local beach. Further, Bud and Bloom plans to look into the feasibility of incentivizing customers to re -use their child -resistant packaging to the extent allowed by laws and regulations in order to minimize packaging waste. Finally, Bud and Bloom plans to continue to shift its cleaning supplies to green products wherever it is safe to do so.