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HomeMy WebLinkAboutNotice of Intent to Circulate Initiative Petition for the Hu Esparza, Patty From: Esparza, Patty Sent: Friday, December 17, 2021 12:55 PM To: Philarcher9@gmail.com Cc: Estanislau, Robin (Robin.Estanislau@surfcity-hb.org);Vigliotta, Mike; CITY COUNCIL; Backstrom, Alisa; Bulosan, Dahle; Chi, Oliver; Crumby, Sean; Gates, Michael; Haberle, Scott; Harvey, Julian; Hopkins, Travis; Luna-Reynosa, Ursula; Mello, Brittany; Slama, Chris Subject: Ballot Title and Summary for Proposed Measure Allowing Cannabis Sale and Delivery in Huntington Beach Attachments: 12172021 Ballot Title and Summary from City Attorney.pdf Importance: High Hello Mr. Archer: Per your request, please find attached the Ballot Title and Summary as prepared by the City Attorney for a proposed Measure allowing cannabis sale and delivery in the City of Huntington Beach. I would greatly appreciate confirmation of receipt of this email. Thank you! Patty Esparza, CMC Assistant City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 (714) 536-5260 t AN INITIATIVE MEASURE ALLOWING CANNABIS SALE AND DELIVERY IN HUNTINGTON BEACH The Measure will repeal the City's existing prohibitions on Cannabis (medical or commercial) sales and Cannabis distribution within the City. The Measure will allow Commercial Cannabis Activity in all commercial and industrial areas of the City with a permit. Commercial Cannabis activity includes cultivation, possession, manufacturing, processing, testing, storage, distribution, packaging, labeling, retail sale and delivery of Cannabis and Cannabis products in the City. The Measure provides that prior to operation of a Commercial Cannabis Facility, Owners and operators must, in part, obtain a Commercial Cannabis Facility Permit and an Operating Agreement from the City; Obtain all State and local permits, licenses, and approvals including Building, Fire, Health Departments; Enter into a Commercial Cannabis Operating Agreement with the City; Enter into an Indemnification Agreement with the City; Obtain insurance; Maintain security measures, including private security guards; Allow for reasonable inspection and audit by the City Manager; Prohibit onsite consumption unless a separate State permit is obtained; Refrain from advertising Cannabis products visible from the exterior of a Commercial Cannabis Facility or attractive to minors; Prohibit anyone under 21 from entering the Facility. The City Manager is required to issue up to 12 Retail/Delivery Commercial Cannabis Facility Permits which may operate anywhere designated as Commercial or Industrial or within Specific Plan areas 5 or 14. Commercial Cannabis Facilities must be located at least 600 feet from any school. The City Manager is authorized to create Regulations to further the intent of the Ordinance. The City Manager may refuse to issue a Permit or may suspend, revoke or modify any Permit if a Commercial Cannabis Facility violates State or City laws or regulations. Decisions of the City Manager may be appealed to a Hearing Officer. The Measure prohibits outdoor cultivation and prohibits deliveries unless the delivery originated from a valid Commercial Cannabis Facility in the City. Deliveries may only be made if the property owner expressly allows and no delivery can be made through the use of Kiosks or re-sale. Delivery drivers must have evidence of the Commercial Cannabis Facility Permit as well as a copy of the requested delivery order in the vehicle. A list of all addresses where the cannabis was delivered shall be maintained by the Commercial Cannabis Facility. The Measure also imposes a new general tax on Cannabis sales in the City. The tax on Medicinal Cannabis Retailers is 2% of all gross receipts up to 4% as approved by resolution of City Council. The tax on Adult-use Retailers is 3%of all gross receipts not to exceed 5% as approved by resolution of City Council. The tax on Distribution, Manufacturing, Cultivation and Testing is 1% of all gross receipts. The Measure provides authority to the City to create Regulations to further collect and enforce the tax provisions including the ability to audit, fine and penalize failure to pay. The Measure provides for an appeal process as to the amount of the tax owed. 21-10766/273249 •� CITY OF HUNTINGTON BEACH ;y INTERDEPARTMENTAL COMMUNICATION TO: Michael Gates, City Attorney FROM: Robin Estanislau, City Clerk DATE: December 2, 2021 SUBJECT: CITY CLERK'S TRANSMITTAL OF NOTICE OF INTENT TO CIRCULATE PETITION AND REQUEST FOR BALLOT TITLE AND SUMMARY FOR THE PROPOSED HUNTINGTON BEACH CANNABIS REGULATION AND LAND USE MEASURE Pursuant to California Elections Code §9105, please return a ballot title and summary of the attached proposed measure within 15 days (by December 17, 2021) for the City Clerk's Office to provide to the proponent, Philip Archer. Attachments: 1. Notice of Intent to Circulate Petition 2. Request for Ballot Title and Summary by City Attorney 3. Uncodified Initiative Ordinance "The Huntington Beach Cannabis Regulation and Land Use Measure" c: Honorable Mayor and City Council Members Oliver Chi, City Manager Executive Team December 2, 2021 R E C E I V E D Robin Estanislau City Clerk 2021 DEC -2 PM 1: 3 1 City of Huntington Beach CITY CLERK 2000 Main Street CITY OF Huntington Beach,CA 92648 NUNTINGTON 8E a r� Dear Ms. Estanislau: RE: Request for Official Ballot Title and Summary/Statement of Proponent for the Huntington Beach Cannabis Regulation and Public Safety Measure 1, Philip Archer, am a proponent of the initiative measure that is attached to this letter. Pursuant to Elections Code section 9203. 1 request that officials of the City of Huntington Beach, including the City Attorney, proceed with the process of preparing an Official Ballot Title and Summary with respect to the aforementioned initiative measure. ACKNOWLEDGMENT (Per Elections Code Q 9608) 1, Philip Archer, acknowledge that it is a misdemeanor under state law(Section 18650 of the Elections Code) to knowingly or willfully allow the signatures on an initiative petition to be used for any purpose other than qualification of the proposed measure for the ballot. I certify that I will not knowingly or willfully allow the signatures for this initiative to be used for any purpose other than qualification of the measure for the ballot. Name: Philip Archer Address: 19271 Salmon Lane Huntington Beach,CA 92646 Dated this 2nd day of December 2021 NOTICE OF INTENT TO CIRCULATE INITIATIVE PETITION FOR THE HUNTINGTON BEACH CANNABIS REGULATION AND PUBLIC SAFETY MEASURE (Cal Elect. Code §9202) NOTICE OF INTENT TO CIRCULATE PETITION Notice is hereby given by the persons whose names appear hereon of their intention to circulate the petition within the City of Huntington Beach for the purpose of adopting an initiative that will enact provisions regarding the regulation of cannabis activity in the City. A statement of the reasons of the proposed action as contemplated in said petition is as follows (up to 500 words): The purpose and intent of this Measure is to accommodate the needs of medically-ill persons in need of cannabis for medicinal purposes,as advised and recommended by their health care provider(s), and adults over the age of twenty-one (21),and to implement State of California ("State") law, which includes, but is not limited to the provisions of the Medicinal & Adult-Use Cannabis Regulation& Safety Act,as may be amended and augmented under State law, while imposing regulations on the conduct of business and use of land to protect the City of Huntington Beach's(the"City") neighborhoods, residents, and businesses from negative impacts. It is a further purpose and intent of this Measure to regulate the cultivation, manufacturing, processing, testing, distribution, and retail sale and delivery of cannabis and cannabis products in a manner which is responsible, which protects the health, safety, and welfare of the residents of the City, and which enforces rules and regulations consistent with State law. In part to meet these objectives,a commercial cannabis business permittee shall be required to own or to operate a cannabis business within the City. Further, this Measure's requirement for a cannabis business to possess a commercial cannabis business permit is in addition to any other permits, licenses, and approvals which may be required to conduct business in the City, and is in addition to any permits, licenses, and approval required under State or County of Orange law. Philip Archer NAME OF PROPONENT 19271 Salmon Lane Huntington Beach,CA 92646 PROPONENT'S ADDRESS &ii PROPONENT'S SIGNATURE N S ti December 2,2021 i p TJ DATE r" m Z A G1,1< 1 n ZOO M m � � 7 � J The Huntington Beach Cannabis Regulation and Land Use Measure THE PEOPLE OF THE CITY OF HUNTINGTON BEACH DO ORDAIN AS FOLLOWS: SECTION 1. Title. This measure shall be known and may be cited as the Huntington Beach Cannabis Regulation and Land Use Measure (the "Measure"). SECTION 2. Purpose and Intent. The purpose and intent of this Measure is to accommodate the needs of medically-ill persons in need of cannabis for medicinal purposes, as advised and recommended by their health care provider(s), and adults over the age of twenty-one (21), and to implement State of California ("State") law, which includes, but is not limited to the provisions of the Medicinal & Adult-Use Cannabis Regulation & Safety Act (hereinafter, "MAUCRSAI'), as may be amended and augmented under State law, while imposing regulations on the conduct of business and use of land to protect the City of Huntington Beach's (the "CCU") neighborhoods, residents, and businesses from negative impacts. It is a further purpose and intent of this Measure to regulate the cultivation, manufacturing, processing, testing, distribution, and retail sale and delivery of cannabis and cannabis products in a manner which is responsible, which protects the health, safety, and welfare of the residents of the City, and which enforces rules and regulations consistent with State law. In part to meet these objectives, a commercial cannabis business permit shall be required to own or to operate a cannabis business within the City. Further, this Measure's requirement for a cannabis business to possess commercial cannabis business permit is in addition to any other permits, licenses, and approvals which may be required to conduct business in the City, and is in addition to any permits, licenses, and approvals required under State or County of Orange ("County") law. SECTION 3. Legal Authority. Pursuant to Section 7 of Article XI of the California Constitution (which pertains to city ordinances and regulations), and the provisions of the MAUCRSA, as may be amended and augmented under State law and any subsequent State legislation regarding the same, the City is authorized to adopt ordinances that establish standards, requirements, and regulations for local licenses and permits for commercial cannabis activity. Except as otherwise provided in this Measure, any standards, requirements, and regulations regarding health and safety, security, and worker protections established by the State, or any of its departments or divisions, shall be the minimum standards applicable to commercial cannabis activity in the City. SECTION 4. Repeal of Chapters 204.18 & 204.20. A. Chapter 204.18 (Prohibited Uses — Medical Marijuana Businesses), which provides as follows, is hereby repealed in its entirety: 9rdiaaese 1 F. €nfamamant.. SECTION S. Enactment of Chapter 5.130 (Commercial Cannabis Facilities). Title 5 (Business Licenses and Regulation) of the Huntington Beach Municipal Code is hereby amended to add Chapter 5.130 (Commercial Cannabis Facilities) to read as follows: Chapter 5,130 COMMERCIAL CANNABIS FACILITIES 5,130,010, Purpose and Intent. It is the purpose and intent of this Chapter 5.130 to implement State Law, which includes, but is not limited to, the provisions of the Medicinal Adult-Use Cannabis Recreation and Safety Act, Business and Professions Code 66 26000, et seg., as it may be augmented and amended from time to time (hereinafter, "MAUCRSA"), while imposing regulations on the use of land to protect the Citv's neighborhoods, residents, and businesses from negative impacts. It is a further purpose and intent of this Chapter 5.130 to regulate the indoor cultivation, retail sale, delivery, manufacturing, processing, testing, and distribution of cannabis and cannabis- related products in a manner which is responsible, which protects the health. safety, and welfare of the residents of Huntington Beach, and which is consistent with the 3 rules and regulations imposed by State Law. Nothing in this Chapter 5.130 is intended to authorize the possession, use, sale, or provision of cannabis for purposes which violate State Law. In addition, nothing in this Chapter 5.130 is intended to allow persons to engage in conduct that endangers others or constitutes a public nuisance. The requirements of this Chapter 5.130 are in addition to any other permits, licenses, or approvals required to conduct business in Huntington Beach or under State. County, or other law. Nothing in this Chapter shall be interpreted to allow Commercial Cannabis Uses other than those that strictly comply with the provisions contained herein. Operation of a Commercial Cannabis Facility without obtaining a Permit and complying with State Law and all of the provisions of this Chapter is strictly prohibited. 5.130.020. Fees and Taxes. All Commercial Cannabis Facilities shall pay all applicable fees and taxes established by the City Council by resolution, which shall include one (1 ) or more of the following: (a) Commercial Cannabis Facility Permit Application Fees. Applicants shall submit a non-refundable fee to cover the cost of processing an application or amended application for a Commercial Cannabis Facility Permit. (b) Commercial Cannabis Facility Permit Renewal Fees. Applicants for renewal permits shall submit a non-refundable fee to cover the cost of processing an application or amended application for annual renewal of the Commercial Cannabis Facility Permit. (c) Business License Taxes. A Commercial Cannabis Facility shall at all times maintain a current and valid City of Huntington Beach business license and shall pay all business license taxes, deposits, charges. fees. deficiencies. penalties. interest, and other associated assessments as may be required by the Huntington Beach Municipal Code or other City rule or regulation. (d) Commercial Cannabis Operating Agreement Fees. Prior to commencing operations, a Commercial Cannabis Facility shall enter into an agreement with the City that includes the payment of fees and other charges to compensate the City for impacts on City services. (e) Cannabis-specific gross receipts. excise taxes, or other municipal tax approved by the voters of the City of Huntington Beach. (f) All required state taxes, including sales and use taxes. business/franchise or income taxes, payroll taxes, etc. (g) All required federal taxes. (h) All required transfer taxes and/or fees. 5.130.030. Commercial Cannabis Authorization and Restrictions. 4 „M. Minimum Standards Applicable to Commercial Cannabis Activity. Pursuant to Sections 5 and 7 of Article XI of the California Constitution (which pertain to city charters. ordinances. and regulations), the provisions of the MAUCRSA, and any subsequent state legislation and/or regulations regarding the MAUCRSA. the City of Huntington Beach is authorized to adopt ordinances that establish standards, requirements, and regulations for the licensing and permitting of Commercial Cannabis Activities. Any standards. requirements. and regulations regarding health and safety. security. and worker protections established by the State of California. or any of its departments or divisions. shall be the minimum standards applicable in the City of Huntington Beach to all Commercial Cannabis Activity. .M. Unauthorized Commercial Cannabis Activities Prohibited. Except as specifically authorized in this Chapter. the commercial cultivation, dispensing, manufacture. processing, storing, laboratory testing. labeling. sale. delivery, distribution or transportation (other than as provided under Bus. & Prof. Code section 26090(e). which provides that "A local iurisdiction shall not prevent delivery of cannabis or cannabis products on public roads by a licensee acting in compliance with this division and local law as adopted under Bus. & Prof. Code Section 26200”) of cannabis or cannabis products is expressly prohibited in the City of Huntington Beach. ,M. Compliance with Laws. Nothing in this Chapter shall be construed as authorizing any actions that violate state or local law with respect to the operation of a Commercial Cannabis Facility. It shall be the responsibility of the ownerfs) and/or operator(s) of a Commercial Cannabis Facility to ensure that the Facility is, at all times. operating in a manner compliant with all applicable state and local laws, as they may be augmented or amended from time to time. including for as long as applicable. the Compassionate Use Act ("Prop. 215" the Medical Cannabis Program Act ("MMPA"). the 2008 Attorney General Guidelines for the Security and Non-Diversion of Cannabis for Medical Purposes ("AG Guidelines"). the Medical Marijuana Regulation and Safety Act ("MMRSA"). the Adult Use of Marijuana Act ("AUMA" or "Prop. 64"), MAUCRSA . and any subsequently enacted state law or regulatory, licensing, or certification requirement (collectively "State Law"). as well as any specific. additional operating procedures or requirements that may be imposed as conditions of approval of a Commercial Cannabis Facility Permit. 5,130,040, Definitions. When used in this Chapter. the following words shall have the meanings ascribed to them as set forth herein. Any reference to California statutes includes any regulations promulgated thereunder, and is deemed to include any successor or 5 amended version of the referenced statute or regulatory provision. The definitions of terms below shall be consistent with the definitions contained in the MAUCRSA. Any term used in this Chapter that is not defined below shall have the same meaning contained in the MAUCRSA. .010 "Applicant' shall mean a person or entity applying for a Commercial Cannabis Facility Permit. In the context of an annual renewal. Applicant shall mean a person or entity applying to renew a Permit. .020. "Cannabis" shall mean all parts of the plant Cannabis sativa Linnaeus Cannabis indica, or Cannabis ruderalis, whether growing or not: the seeds thereof: the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also means "mariivana"as-defined by Section 11018 of the Health and Safety Code as enacted by Chapter 1407 of the Statutes of 1972 ("all parts of the plant Cannabis sativa L., whether growing or not: the seeds thereof: the resin extracted from any part of the plant: and every compound. Manufacture, salt derivative, mixture, or preparation of the plant, its seeds or resin"). The term "Cannabis" shall also have the same meaning as set forth in Business & Professions Code � 26001 (e ), as it may be amended from time to time. "Cannabis" does not include the mature stalks of the plant fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture. salt, derivative mixture. or preparation of the mature stalks (except the resin extracted therefrom). fiber . oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, "cannabis" does not mean "industrial hemp" as defined by Section 81000 of the Food and Agricultural Code ("an agricultural product whether growing or not, that is limited to types of the plant Cannabis sativa L. and any part of that plant, including the seeds of the plant and all derivatives, extracts, the resin extracted from any part of the plant, cannabinoids, isomers, acids, salts. and salts of isomers, with a delta-9 tetrahydrocannabinol concentration of no more than 0.3 percent on a dry weight basis") or Section 11018.5 of the Health and Safety Code ("a crop that is limited to types of the plant Cannabis sativa L. having no more than three-tenths of 1 percent tetra hydrocannabinol (THC) contained in the dried flowering tops whether growing or not: the seeds of the plant: the resin extracted from any part of the plant: and every compound, manufacture, salt, derivative. mixture, or preparation of the plant its seeds or resin produced therefrom"). .040 "City" shall mean the City of Huntington Beach. .050 "City Cannabis Regulations" shall mean and refer to the regulations issued by the City Manager or his or her designee relating to the application for or renewal of a Commercial Cannabis Facility Permit and/or the oversight and operation of Commercial Cannabis Facilities in the City. 060 "City Manager" shall mean the City Manager of the City of Huntington 6 Beach or his or her designee. .080 "Commercial Cannabis Activity" shall have the same meaning as set forth in Business and Professions Code � 26001(i). as it maV be amended from time to time: Commercial Cannabis Activity includes the cultivation, possession, manufacture, distribution processing storing, laboratory testing, packaging labeling transportation, delivery, or sale of cannabis and cannabis products or acting as a cannabis event organizer for temporary cannabis events. .090 "Commercial Cannabis Facility" shall mean a business that has obtained a Commercial Cannabis Facility Permit from the City of Huntington Beach in order to conduct a Commercial Cannabis Activity, and which is subject to the regulations set forth in State Law and this Chapter. . 100 "Commercial Cannabis Facility Permit or Permit" shall mean a regulatory permit issued by the City of Huntington Beach pursuant to this Chapter to a Commercial Cannabis Facility, and which is required before any Commercial Cannabis Activity may be conducted in the City. The initial permit and annual renewal of a Commercial Cannabis Facility Permit is made expressly contingent upon the business' ongoing compliance with all of the requirements of this Chapter and anV regulations adopted by the City governing the Commercial Cannabis Activity at issue. . 110 "Commercial Cannabis Operating Agreement" shall mean an agreement entered into by and between the City and a Commercial Cannabis FacilitV governing the operation of the Facility which shall among other things. specify terms for local hiring and sourcing. community benefits public safety. public outreach and education, community services and payment of fees and other charges to compensate the CitV for impacts on City services. . 120 "Cultivation or Cultivator" shall mean a Licensee engaged in activity involving the planting, growing. harvesting drying curing grading or trimming of Cannabis. . 130 "Cultivation — Indoor" shall mean the Cultivation of Cannabis inside a permanent enclosed building or structure. . 140 "Cultivation — Outdoor" shall mean the Cultivation of Cannabis outside a permanent enclosed building or structure. . 150 "Delivery" shall mean the commercial transfer of Cannabis or Cannabis products to acustomer located at a physical address. "Delivery" also includes the use by a Retailer of any technology platform used to transfer or sell Cannabis other than at the Retail Facility. . 160 "Distribution or Distributor" shall mean a Licensee that engages in the procurement, sale, and transport of cannabis and cannabis products between other 7 Licensees. . 170 "Hearing Officer" shall mean the person appointed by the City Manager to serve as the hearing officer for administrative hearings. Prior to conducting hearings the hearing officer must first be certified by the City Attorney as qualified to provide a fair and impartial hearing based on appropriate education training and experience 180 "Labor Peace Agreement" means a written agreement, as defined by California Business and Professions Code 6 26001(y) between an Owner and any bona fide labor organization that, at a minimum prohibits labor organizations and members from engaging in picketing, work stoppages, boycotts and any other economic interference with the Owner's business and contains an agreement by the Owner not to disrupt efforts by the bona fide labor organizer to communicate with, and attempt to organize and represent the Owner's employees. . 190 "License or State License" shall mean a license issued by the State of California or one of its departments or divisions under the MAUCRSA or any subsequent State of California legislation relating to Commercial Cannabis Activity. .200 "Licensee" shall mean an individual or entity that has obtained a State License. .210 "Manufacture or Manufacturer' shall mean a Licensee that engages in the production preparation, propagation, or compounding of Cannabis or Cannabis products either directly or indirectly or by extraction methods or independently by means of chemical synthesis , or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages Cannabis or Cannabis products or labels or relabels their containers. .220 "Owner" shall have the same meaning as set forth in Business and Professions Code section 26001(am)(1 ), as it may be amended from time to time and shall generally mean an individual or entity with at least a twenty percent (20%) ownership interest in a business engaged in Commercial Cannabis Activity. .230 "Permittee" shall mean an individual or entity that has obtained a Commercial Cannabis Facility Permit. 240 "Person" shall have the meaning set forth in Section 1 .01.240 of this Code ("any person, firm, association, organization, partnership business trust company or corporation"). .250 "Retail, Retailer, or Retail Facility" shall mean a licensed premises where Cannabis, Cannabis products, or devices for the use of Cannabis or Cannabis products are offered either individually or in any combination for retail sale including an establishment that Delivers Cannabis or Cannabis products as part of a retail sale. 8 .260 "State" shall mean the State of California or any departments or divisions thereof. .270 "State Law" shall have the meaning set forth in Section 5.130.030 of this Chapter. .280 "Testing Laboratory" means a laboratory, facility, or entity in the State that offers or performs tests of Cannabis or Cannabis products and that is both of the following: (1) accredited by an accrediting body that is independent from all other persons involved in Commercial Cannabis Activity in the State: and (2) licensed by the Department of Cannabis Control. 5,130,050. Procedures. .010 Commercial Cannabis Facility Permit Required. No person shall engage in Commercial Cannabis Activity in Huntington Beach unless: (1) the person has obtained a valid Commercial Cannabis Facility Permit issued by the City of Huntington Beach; (2) the person has obtained a valid Cannabis License issued by the State of California; and (3)the Facility is operated in compliance with all applicable State and local laws and regulations pertaining to its Commercial Cannabis Activity. including but not limited to the provisions of this Chapter and the City's Cannabis Regulations. Any person who is an employee or who otherwise works within a Commercial Cannabis Facility must be legally authorized to do so under applicable State Law. .020 Commercial Cannabis Operating Agreement Required. Prior to commencing operations, an Applicant for a Commercial Cannabis Facility Permit shall be required to enter into a Commercial Cannabis Operating Agreement with the City setting forth the terms and conditions under which the Commercial Cannabis Facility will operate that are in addition to the requirements of this Chapter. including. but not limited to. terms for local hiring and sourcing. community benefits public safety (including both police and fire services), public outreach and education. community services, payment of fees and other charges as mutually agreed. and such other terms and conditions as will protect and promote the public health. safety. and welfare. .030 Application Process and Requirements. .0301 The City Manager is authorized to prepare and promulgate Commercial Cannabis Facility Permit application form(s), and to modify those forms as the need arises. Any individual or entity that seeks to operate a Commercial Cannabis Facility shall submit an application on a form prepared by the City Manager together with a non-refundable Processing fee. 9 .0302 Commercial Cannabis Facility Permit application requirements processes and procedures shall be set forth in the Citv's Cannabis Regulations. Failure to disclose information fully and accurately in an application form may lead to denial or revocation of, or failure to renew, a Permit. .0303 Within ten (10) calendar days of any change in the information provided in aCommercial Cannabis Facility Permit application form or any change in status of compliance with the provisions of this Chapter, an Applicant shall file an updated application form for review along with an application amendment fee. .0304 Applications shall be reviewed and processed by the City Manager in the order in which thev are received. The City Manager shall award Commercial Cannabis Facility Permits to the first twelve (12) Applicant(s) for who submitted complete Applications. JUQ. City Manager Authority to Aporove or Deny Permit. The City Manager shall either deny, approve. or conditionally approve an application for a Commercial Cannabis Facility Permit. The City Manager's decision shall be final. The City Manager shall provide the Applicant with written notice of his/her decision. .0401 If an application is denied, a new application may not be filed for one (1 ) year from the date of the denial. .0402 If a Commercial Cannabis Facility Permit is approved or conditionally approved, it shall only be valid for a term of twelve (12) months from the date it is issued, and shall expire at the end of the twelve (12) month period unless it is renewed as provided in this Chapter. A Commercial Cannabis Facility Permit does not confer any property interest, entitlement or vested right and shall not run with the land. Permits issued pursuant to this Chapter are not transferable to any other individual, entity. Premises or location except as set forth in this Chapter. .0403 The City Manager retains full authority to deny an application for a Commercial Cannabis Facility Permit in the event that he/she determines any of the following: (a) The Applicant has not provided the information required on the application form- (b) The Applicant has falsified or made misrepresentations in the application. (c) The Applicant has previously failed to comply with any of the requirements set forth in this Chapter. (d) The Applicant has failed to comply with State Law and/or 10 remit taxes as required by the Revenue and Taxation Code. (e) The Applicant has denied the City or the State access to the licensed premises. (f) The approval could result in harm to the public health. safety. or welfare. .050. Amendment to Cannabis Facility Permit. No Commercial Cannabis Facility Permit shall be amended without the prior written approval of the City. Renewal Process and Requirements. .0601 An application for renewal of a Commercial Cannabis Facility Permit shall be filed at least sixty (60) calendar days prior to the expiration date of the current Permit on an application renewal form prepared by the City Manager. The City's Cannabis Regulations shall set forth the renewal application process, including the applicable deadlines and renewal requirements. The renewal application shall generally request or require confirmation of information required for new applications, and may be subject to the same site inspection and City staff approvals required for new applications. .0602 The Applicant shall pay a fee in an amount to be set by the City Council to offset the cost of processing a renewal application together with any costs incurred by the City to administer the program created under this Chapter. The City Council shall establish the renewal fee by resolution. .0603 An application for renewal of a Commercial Cannabis Facility Permit may be denied for any of the following reasons: (a)The application was filed less than sixty (60) days before expiration of the Permit. u The Commercial Cannabis Facility Permit or State License has been suspended or revoked at the time of the application. (c) The Commercial Cannabis Facility has not been in regular and continuous operation in the ninety (90) days prior to the renewal application. (d)The Commercial Cannabis Facility has failed to conform to the requirements of this Chapter, the City's Cannabis Regulations, its Commercial Cannabis Operating Agreement, or State Law. 11 (e) The Applicant fails or is unable to renew its State License. For any of the reasons set forth in Chapter 5.130.050.040(c). .0604 The City Manager is authorized to make all decisions concerning the renewal of aCommercial Cannabis Facility Permit. In determining whether to renew a Permit, the City Manager is authorized to impose additional conditions on the Permit if deemed necessary to ensure compliance with state or local laws and regulations or to preserve the public health, safety or welfare. .0605 The City Manager's decision to approve, conditionally approve, or deny an application to renew a Commercial Cannabis Facility Permit may be appealed as provided in this Chapter. .0606 If a renewal application for a Commercial Cannabis Facility is denied. a person may file an application for a new Permit pursuant to this Chapter no sooner than one (1) year from the date of the denial. .070. Revocation. Modification and Suspension Requirements. 0701 Commercial Cannabis Facility Permits may be suspended, revoked or modified by the City Manager based upon any of the following: (a)A violation of any State or local law. rule. regulation requirement and/or standard, including but not limited to the provisions of this Chapter. the City's Cannabis Regulations. the Commercial Cannabis Operating Agreement, or the City's Municipal Code. (b)A determination that the Applicant falsified or misrepresented information on its Commercial Cannabis Facility Permit application or renewal application. (c) An unauthorized transfer of ownership or change of location of a Commercial Cannabis Facility. .0702 Suspension of a State License shall immediately suspend the ability of a Commercial Cannabis Facility to operate within the City. The City may, in its sole and absolute discretion, reinstate the Commercial Cannabis Facilities Permit if the State reinstates or reissues the State License. Should the State revoke or terminate the License of a Commercial Cannabis Facility, such revocation or termination shall automatically revoke or terminate the Commercial Cannabis Facility Permit and the ability of a Commercial Cannabis Facility to operate within the City of Huntington Beach. Upon notification by the State a Permittee shall notify the City immediately in writing of State proceedings to revoke or suspend a State License. If a Permittee fails to do so the City Manager may impose a daily fine not to exceed one thousand dollars ($1 000)for each day notification is delayed. 12 .0703 The City Manager's determination to suspend, modify, or revoke a Commercial Cannabis Facility Permit shall be effective immediately upon written notice from the City, and shall not be staved in the event an appeal is filed. .0704 The City Manager's determination to suspend modify or revoke a Commercial Cannabis Facility Permit may be appealed as provided in this Chapter. .080. Transfer of Commercial Cannabis Facility or Permit. .0801 No Owner or Permittee shall transfer his/her/its ownership or control of a Commercial Cannabis Facility or any rights acquired under a Commercial Cannabis Facility Permit, to another person without written notification to the City. Such notification shall be provided a minimum of ninety (90) days before the proposed transfer and shall be accompanied by the information required in the City's Cannabis Regulations which shall be similar to the information required of Applicants for new Permits. The City Manager shall have ninety (90) days from receipt of the required information to make a determination on the transfer request, which time shall not begin to run until a completed transfer application packet is submitted to the City. The City Manager may approve, deny, or conditionally approve the transfer request. .0802 A Commercial Cannabis Facility may change the form of business entity that owns the Commercial Cannabis Facility or holds its Commercial Cannabis Facility Permit, provided that the membership of the new business entity is substantially similar to original Permit holder business entity (at least ninety-five percent (95%) of the membership is identical). The Permittee is required to notify the City Manager in writing of the proposed change thirty (30) days prior to the effective date of the proposed change. A change in the form of the business entity that occurs without prior notification to the City shall result in the immediate suspension of the Commercial Cannabis Facility Permit shall be null and void and may constitute grounds for Permit revocation. .0803 Any transfer a Commercial Cannabis Facility Permit, or change in the ownership, business structure, or operational control of a Commercial Cannabis Facility, either directly or indirectly, in violation of this section shall be null and void and is grounds for suspension or revocation of the Permit. .0804 No transfer shall occur pursuant to this Section for one year from the date a Permit was first issued to an Owner or operator of a Commercial Cannabis Facility_ .0805 Any transfer that occurs pursuant to this Section shall be subject to a transfer fee that is established by the City Council by resolution. .090. Relocation of Commercial Cannabis Facility. 13 .0901 Neither a Commercial Cannabis Facility nor its Permit shall be transferred or relocated from one premises to another without the City Manager's prior written consent, which must be requested a minimum of ninety (90) days before the proposed relocation. The request will be processed in accordance with the City's Cannabis Regulations and the City Manager may require the Permittee to submit additional application materials for the new location. A Permittee shall not operate from a new location unless and until it applies for and receives written approval from the City Manager, who has discretion to approve conditionally approve, or deny the request. .0902 A transfer or relocation of a Commercial Cannabis Facility or its Permit from one premises to another in violation of this section shall be null and void and is grounds for suspension or revocation of the Permit. 0903 No transfer shall occur pursuant to this Section for two years from the date a Permit was first issued to an Owner or operator of a Commercial Cannabis Facility. .0904 Any transfer or relocation location that occurs pursuant to this Section shall be subject to a transfer fee that is established by the City Council by resolution. ,1QQ. Appeal Hearing and Procedure. .1001 Unless specifically provided elsewhere to the contrary, whenever an appeal is provided for in this Chapter from a decision of the City Manager or his/her designee(s), the appeal shall be conducted as prescribed in this Chapter. .1002 Within ten (1 O) calendar days after the date of a decision of the City Manager or his/her designee(s) to revoke, suspend, or not to renew a Commercial Cannabis Facility Permit, a Permittee may appeal such action by filing a written appeal with the City Clerk setting forth the reasons for contesting the decision. .1003 At the time of filing, the appellant shall pay the designated appeal fee established by resolution of the City Council. .1004 Upon receipt of the written appeal the City Clerk shall set the matter for a hearing before the City's Hearing Officer. The Hearing Officer shall hear the matter de novo, and shall conduct the hearing pursuant to the procedures set forth by the City. .1005 The appeal shall be held within a reasonable time after the date the appeal is filed. The City shall notify the appellant of the time and location of the hearing at least ten (10) days prior to the date of the hearing. .1006 At the hearing, the appellant may present any information it deems relevant to the decision appealed. The formal rules of evidence and procedure 14 applicable in a court of law shall not apply to the hearing. .1007 At the conclusion of the hearing the Hearing Officer may affirm reverse or modify the decision appealed. The decision of the Hearing Officer shall be final. 5.130,060, Number and Location of Cannabis Facility Permits. S.jQ. Maximum Number of Commercial Cannabis Facility Permits, The City Manager shall be authorized to issue the following number of Commercial Cannabis Facility Permits for each type of Commercial Cannabis Activity: .0101 Retail: Twelve (12) total Commercial Cannabis Facility Permits for retail/delivery may be issued. No more than two (2) Retail Permits shall be issued to the same Owner(s). ,QaQ. Location and Separation Requirements. .0201 A Commercial Cannabis Facility for retail/delivery that meets the separation requirements identified Section 5.110.060.0202 and has obtained a valid Cannabis Facility Permit and Operating Agreement per this Chapter, may locate on any parcel designated by the General Plan for Industrial or Commercial land use or located within the Specific Plan Designation Nos. 5 or 14. .0202 No Commercial Cannabis Facility shall be located within six hundred (600) feet of any school (whether public, private, or charter, including pre-school transitional kindergarten, and K-12), or any public park. .0203 Outdoor Cultivation is expressly prohibited in all zoning districts in the City. .0204 Cannabis Deliveries within the City of Huntington Beach are prohibited, unless the Delivery originated from a Retailer located in Huntington Beach that has obtained a valid Commercial Cannabis Delivery Permit, or if the Retailer is located outside the City of Huntington Beach, and has obtained a business license from the City of Huntington Beach. 5.130.070. Operational Standards. .010 Pre-Operational Reguirements. Prior to commencing operations. and as a precondition for commencing such operations. a Commercial Cannabis Facility and its Owners and operators shall: 15 .0101 Obtain any and all required land use entitlements and approvals and comply with any California Environmental Quality Act requirements related thereto. .0102 Be subject to a mandatory building inspection and obtain all required permits and approvals that would otherwise be required for any business of the same size and intensity operating in the Industrial zone. This includes but is not limited to obtaining any required building permit(s), certificates of occupancy, Fire Department approvals, Health Department approvals, and other zoning and land use permit(s) and approvals. .0103 Enter into a Commercial Cannabis Operating Agreement with the City setting forth the terms and conditions under which the Commercial Cannabis Facility will operate that are in addition to the requirements of this Chapter, including but not limited to, providing for public safety. public outreach and education community services and benefits, payment of fees and other charges as mutually agreed. and such other terms and conditions as will protect and promote the public health, safety, and welfare. .0104 Execute an agreement, in a form approved by the City Attorney, agreeing to indemnify, defend (at applicant's sole cost and expense) and hold the City of Huntington Beach, and its officers. officials employees, representatives and agents. harmless, from any and all claims, losses damages injuries liabilities or losses which arise out of, or which are in any way related to, the City's issuance or failure to issue a Commercial Cannabis Facility Permit. the City's decision to approve or its refusal to approve the operation of the Commercial Cannabis Facility, the process used by the City in making its decision, or the alleged violation of any federal, state, or local laws by the Commercial Cannabis Facility or any of its officers, employees, or agents. .0105 Obtain and consistently maintain insurance at coverage limits and with conditions thereon determined necessary and appropriate by the City Attorney. .0106 Obtain a Commercial Cannabis Facility Permit and pay all fees and charges required by the City or any other local or State agency for the operation of a Commercial Cannabis Facility. .0107 Comply with all State and local laws and regulations including but not limited to the requirements of this Chapter, the City's Cannabis Regulations the requirements of the Commercial Cannabis Permit, and State Law. .0108 Obtain a valid State License allowing for the operation of a Commercial Cannabis Facility. .0109 Apply for and obtain a City of Huntington Beach business license. .0110 If the Commercial Cannabis Facility employs two (2) or more employees, enter into a Labor Peace Agreement and provide City with evidence of 16 such Labor Peace Agreement. .020 Operational Standards Applicable to All Cannabis Facilities. While engaged in Commercial Cannabis Activities. all Commercial Cannabis Facilities shall comply with the following operational requirements: .0201 Conform with the City's general plan. any applicable specific plans. master Plans. and design requirements. .0202 Comply with all applicable zoning and related development standards. .0203 Be constructed in a manner that minimizes odors to surrounding uses. and promotes quality design and construction, and consistency with the surrounding properties. .0204 Be provided with adequate electricity. sewerage, disposal, water. fire protection, and storm drainage facilities for the intended purpose. .0205 Maintain sufficient security measures to deter and prevent the unauthorized entrance into areas containing Cannabis or Cannabis products. and to deter and prevent the theft of Cannabis or Cannabis products at the Commercial Cannabis Facility. consistent with State Law. .0206 Cooperate with the City if it makes a request. upon reasonable notice to the Commercial Cannabis Facility, to inspect or audit the effectiveness of any security plan or of any other requirement of this Chapter. .0207 With the exception of Cannabis Retailers operating in accordance with State Law to permit on-site consumption of Cannabis by customers, prohibit the consumption or sampling of Cannabis by any employee. visitor, customer. operator, or vendor on the premises of the Commercial Cannabis Facility. .0208 Refrain from displaying Cannabis products or graphics depicting Cannabis or Cannabis products so as to be visible from the exterior of any property issued a Commercial Cannabis Facility Permit, or on any of the vehicles owned or used as part of theCommercial Cannabis Facility. .0209 Refrain from displaying any signage. packaging, or other display that is "attractive" to minors as defined by State Law. as well as from any outdoor storage or display of Cannabis or Cannabis products. .0210 Provide the City with the name, telephone number of an on-site employee or Owner to whom emergency notice can be provided at any hour of the day. 0211 Prohibit any person under the age of twenty-one (21 ) years old 17 from entering upon the Commercial Cannabis Facility premises or being employed by the Commercial Cannabis Facility. .0212 Prohibit the sale. dispensing. or consumption of alcoholic beverages or tobacco products on or about the premises of the Commercial Cannabis Facility. .0213 Ensure that the Commercial Cannabis Facility is monitored at all times by web-based closed-circuit television for security purposes and maintain and provide the City with access to those recordings as provided in the City's Cannabis Regulations. .0214 If the Commercial Cannabis Facility employs two (2) or more employees (computed as "full time" non-supervisorial employee equivalent positions where an employee full time equivalent works 1700 hours per year), enter into a Labor Peace Agreement and provide City with evidence of such Labor Peace Agreement within (90) days following the date when the number of employees exceed two (2) full time positions. .0215 Comply with the Citv's Commercial Cannabis Regulations and any Commercial Cannabis Facility operational requirements or regulations as are determined by the City Manager to be necessary to protect the public health. safety and welfare. .030. Additional Operational Standards Applicable to Cannabis Retailers. .0301 Cannabis Retailers shall only operate between the hours of 8:00 a.m. and 10:00 p.m. If permitted by State Law, Cannabis Retailers may operate as or with a drive-in or drive- thru at which Cannabis goods are sold to persons within or about a motor vehicle. .0302 All structures included as part of the permitted Commercial Cannabis Facility shall be permanently affixed to land by a method that would normally cause the structure to ordinarily remain affixed for an indefinite period of time. .0304 Commercial Cannabis Retailers shall provide at least one (1) private security guard during all hours of operation who is licensed and possesses a valid Department of Consumer Affairs "security guard card". .0305 No non-Cannabis food or concessions shall be sold or distributed at the Premises. .0306 Shipments of Cannabis goods may only be accepted during regular business hours. .0307 A permitted Commercial Cannabis Retail Facility shall have twelve (12) months after Permit issuance by the City of Huntington Beach to commence operations. 18 .040. Additional Operational Standards Applicable to Cannabis Retail Deliveries. .0401 Commercial Cannabis Retail Deliveries may be made only from a Commercial Cannabis Retail Facility permitted by the City in compliance with this Chapter and State Law. Deliveries from Cannabis Retailers located outside the City of Huntington Beach are prohibited unless the Retailer obtains an Huntington Beach Business License. .0402 Cannabis goods shall only be delivered to a residential dwelling. or to a commercial building or structure being lawfully used for lodging or temporary dwelling purposes (e. g. hotels or motels) if such Delivery is expressly permitted by the owner of the building or structure. Deliveries shall not be made to, or thorough the use of, any kiosk or temporary building or structure nor for purposes of re-sale of the Cannabis product that is delivered. .0403 All employees who deliver Cannabis shall have valid identification and a copy of the Commercial Cannabis Retail Facility Permit and State License at all times while making Deliveries. .0404 During Delivery, the Delivery employee shall maintain a physical or electronic copy of the Delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The Deliver v request documentation shall comply with State Law. .0405 A Commercial Cannabis Retail Facility shall maintain a list of all Deliveries, including the address delivered to, the amount and type of product delivered, and any other information required by State Law. 5.130.080. Regulations and Inspection. .010 Commercial Cannabis Regulations. Consistently with stated requirements of this Chapter (and in particular not to repeal or constructively repeal this Chapter). the City Manager is authorized to establish City Cannabis Regulations governing the Commercial Cannabis Permit application and renewal criteria and processes. the regulation and oversight of Commercial Cannabis Facilities. the operational requirements imposed on such Facilities. and any other subiect determined to be necessary to carry out the purposes of this Chapter. Compliance with the City's Commercial Cannabis Regulations is requiredto engage in Commercial Cannabis Activity. and failure to do so is grounds for revocation. suspension, or non-renewal of a Commercial Cannabis Facility Permit, as well as the other penalties set forth in this Chapter. .020 Inspection. 19 The City Manager is charged with enforcing the provisions of this Chapter and may enter the location of a Commercial Cannabis Facility at any time. without notice, and inspect the location of any Commercial Cannabis Facility as well as any records required to be maintained pursuant to this Chapter or under applicable provisions of State Law. 5.130.090. Fees Deemed Debt to City of Huntington Beach. The amount of any fee, cost, or charge imposed pursuant to this Chapter shall be deemed a debt to the City of Huntington Beach that is recoverable via an authorized administrative process as set forth in the Huntington Beach Municipal Code, or in any court of competent jurisdiction. 5.130.100. Permit Holder, Owners, and Operators Responsible for Violations. The person to whom a Permit is issued pursuant to this Chapter, as well as each and every Owner and operator of a Commercial Cannabis Facility. shall be responsible for all violations of this Chapter. State Law. the Huntington Beach Municipal Code and/or of the City's Cannabis Regulations by the Facility. whether committed by the Permittee or any employee or agent of the Permittee. 5.130.110. Violations Declared a Public Nuisance. Each and every violation of the provisions of this Chapter is hereby deemed unlawful and a public nuisance. 5.130.120. Each Violation a Separate Offense. Each and every violation of this Chapter shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by the Huntington Beach Municipal Code. Additionally. as a nuisance per se, any violation of this Chapter shall be subject to injunctive relief, with any Permit issued pursuant to this Chapter being deemed null and void, and the City entitled to disgorgement or payment of any monies unlawfully obtained . costs of abatement, costs of investigation, attorney fees . and any other relief or remedy available at law or in equity. The City may also pursue any and all remedies and actions available and applicable under state and local laws for any violations committed by the Commercial Cannabis Facility Owner, operator or persons related to, or associated with, the Commercial Cannabis Facility. Additionally. when there is determined to be an imminent threat to public health. safety. or welfare. the City Manager or the Chief of Police or his/her designee(s) may take immediate action to temporarily suspend a Commercial Cannabis Facility Permit issued by the City. and close down the Commercial Cannabis Facility pending a hearing before the City Hearing Officer. 5.130.130. Criminal Penalties. Each and every violation of the provisions of this Chapter may. in the discretion of 20 the City Attorney. be prosecuted as a misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars ($1 .000.00) or imprisonment in the county fail for a period of not more than twelve (12) months. or by both such fine and imprisonment. Each day a violation is committed or permitted to continue shall constitute a separate offense. 5.130.140. Remedies Cumulative and Not Exclusive. The remedies provided herein are not to be construed as exclusive remedies. The City is authorized to pursue any proceedings or remedies provided by law. SECTION 6. Chapter 3.60 (Cannabis Business Tax) is hereby added to Title 2 (Revenue and Finance) of the City Municipal Code to read as follows: Chapter 3.60 CANNABIS BUSINESS TAX 3.60.010. Authority and Purpose- (a). The purpose of this Chapter is to adopt a tax, for revenue purposes, pursuant to Sections 37101 and 37100.5 of the State Government Code, upon cannabis businesses that engage in business in the City. The Cannabis Business Tax is levied based upon business gross receipts. It is not a sales and use tax, a tax upon income, or a tax upon real property (b). The Cannabis Business Tax is a general tax enacted solely for general governmental purposes of the City and not for specific purposes. All of the proceeds from the tax imposed by this Chapter 3.60 shall be placed in the City's general fund and be available for any lawful City expenditure. 3.60.020. Intent. The intent of this Chapter 3.60 is to impose a general tax applicable to Cannabis Businesses for the purpose of funding any and all governmental purposes, including but not limited to 911 emergency response police / fire protection services; pothole repair; afterschool programs: senior services homeless reduction; graffiti removal, and other City general fund services. 3.60.030. Definitions. When used in this Chapter 3.60, the following words shall have the meanings ascribed to them as set forth herein. Words and phrases not specifically defined below shall have the meanings ascribed to them elsewhere in this Code, or shall otherwise be defined by common usage. For definitions of nouns, the singular shall also include the plural; for definitions of verbs, all verb conjugations shall be included. Any references to State law, including references to MAUCRSA is deemed to include any successor or amended version of the referenced statute or regulations promulgated thereunder consistent with the terms of this Chapter 3.60. "Adult-use cannabis" or "adult-use cannabis product" means cannabis or cannabis products for individuals twenty-one (21) years of age and over without the need for a physician's recommendation. "Business" means all activities engaged in or caused to be engaged in within the City, including any commercial or industrial enterprise, trade, profession, occupation, vocation, calling or livelihood whether or not carried on for gain or profit, but shall not include the services rendered by an employee to that employee's employer. 21 "Cannabis" means all parts of the Cannabis sativa Linnaeus. Cannabis indica, or Cannabis ruderalis whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture or preparation of the plant its seeds or resin. "Cannabis" also means the separated resin, whether crude or purified obtained from cannabis. "Cannabis" also means mariivana as defined by Section 11018 of the California Health and Safety Code. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture or preparation of the mature stalks (except the resin extracted therefrom) fiber, oil or cake or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter 3.60, cannabis does not mean industrial hemp as that term is defined by Section 81000 of the State Food & Agricultural Code ("an agricultural product, whether growing or not, that is limited to types of the plant Cannabis sativa L. and any part of that plant, including the seeds of the plant and all derivatives, extracts, the resin extracted from any part of the plant, cannabinoids, isomers, acids, salts, and salts of isomers, with a delta-9 tetrahydrocannabinol concentration of no more than 0.3 percent on a dry weight basis") or Section 11018.5 of the State Health & Safety Code ("a crop that is limited to types of the plant Cannabis sativa L. having no more than three- tenths of 1 percent tetrahydrocannabinol (THC) contained in the dried flowering tops whether growing or not the seeds of the plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin produced therefrom"). "Cannabis business" or "commercial cannabis business" means any business or operation which engages in commercial cannabis activity whether or not carried on for gain or profit. "Cannabis Business Tax" or "Tax" means the tax due pursuant to this Chapter 3.60 for engaging in commercial cannabis activity within in the City. "Cannabis concentrate" means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product's potency. Resin from granular trichomes from a cannabis plant is a concentrate for purposes of this Chapter 5.18. A cannabis concentrate is not considered food, as defined by Section 109935 of the State Health & Safety Code ("any article used or intended for use for food, drink, confection, condiment, or chewing gum by man or other animal") or drug as defined by Section 109925 of the State Health & Safety Code ("an article recognized in an official compendium, used or intended for use in the diagnosis cure mitigation treatment or prevention of disease in human beings or any other animal, or other than food, that is used or intended to affect the structure or any function of the body of human beings or any other animal"). "Cannabis product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients. "City" means the City of Huntington Beach. "City Council" shall mean the City Council of the City of Huntington Beach. "Commercial cannabis activity" has the same meaning as that term is defined under MAUCRSA and includes the cultivation, possession, manufacture, distribution, processing storing laboratory testing packaging, labeling, transportation, delivery, or sale of cannabis and cannabis products as regulated under MAUCRSA. "Code" means the City Municipal Code. "Cultivation" means any commercial cannabis activity involving the planting growing harvesting drying curing, grading, or trimming of cannabis. 22 "Customer' means a natural person twenty-one (21) years of age or over or a natural person eighteen (18) years of age that is a qualified patient or primary caregiver. "Delivery" means the commercial transfer of cannabis or cannabis products to a customer. "Delivery" also includes the use by a retailer of any technology platform owned and controlled by the retailer. "Dispensary" or "retailer" means a facility where cannabis, cannabis products, or devices for the use of cannabis or cannabis products are offered, either individually or in any combination for retail sale including an establishment that delivers cannabis and cannabis products. "Dispensing" or "retail sale" means any commercial cannabis activity involving the retail sale of cannabis or cannabis products. "Distribution" means the procurement, sale, and transport of cannabis and cannabis products between persons engaged in commercial cannabis activity. "Employee" means each person who renders any service, with or without compensation, for an owner, manager, or agent of either an owner or manager of a cannabis business. For purposes of this Chapter 3.60, the term employee shall include part-time, full-time, temporary, or regular employees. "Engaged(s) in business" means the commencing, conducting, operating, managing, or carrying on of a cannabis business and the exercise of corporate or franchise powers, whether done as an owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities. A person shall be deemed engaged in business if any of the following apply: (a). Such person or person's employee maintains a fixed place of business within the City for the benefit or partial benefit of such person; (b). Such person or person's employee owns or leases real property within the City for business purposes; (c). Such person or person's employee regularly maintains a stock of tangible personal property in the City for sale in the ordinary course of business; (d). Such person or person's employee regularly conducts solicitation of business within the City: or € Such person or person's employee performs work or renders services in the City. The foregoing specified activities shall not be a limitation on the meaning of"engaged in business". "Evidence of doing business" means evidence such as, without limitation, use of signs circulars, cards or any other advertising media, including the use of internet or telephone solicitation, or representation to a government agency or to the public that such person is engaged in a cannabis business in the City. "Fiscal year" means July 1 through June 30 of the following calendar year. "Gross Receipts" means, except as otherwise specifically provided, whether designated a sales price, royalty, rent, commission, dividend, or other designation, the total amount (including all receipts cash credits and property of any kind or nature) received or payable for sales of goods, wares, or merchandise or for the performance of any act or service of any nature for which a charge is made or credit allowed (whether such service, act or employment is done as part of or in connection with the sale of goods, wares merchandise or not), without any deduction therefrom on account of the cost of the property sold, the cost 23 of materials used, labor or service costs, interest paid or payable, losses or any other expense whatsoever. However, the following shall be excluded from Gross Receipts: (a). Cash discounts where allowed and taken on sales: (b). Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser: (C). Such part of the sale price of any property retumed by purchasers to the seller as refunded by the seller by way of cash or credit allowances or return of refundable deposits previously included in gross receipts: (d). Receipts derived from the occasional sale of used, obsolete, or surplus trade fixtures, machinery, or other equipment used by the taxpayer in the regular course of the taxpayer's business: E. Cash value of sales, trades, or transactions between departments or units of the same business: (f). Whenever there are included within the gross receipts amounts which reflect sales for which credit is extended and such amount proved uncollectible in a subsequent year, those amounts may be excluded from the gross receipts in the year they prove to be uncollectible: provided, however, if the whole or portion of such amounts excluded as uncollectible are subsequently collected they shall be included in the amount of gross receipts for the period when they are recovered: and (_q). Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of one dollar. "Manager" means any individual who will be participating in the direction, control, or management of a cannabis business, including any (i) manager or managing member or other officer of a limited liability company or (ii) chief executive officer, secretary, treasurer / chief financial officer or other officer of a for profit corporation. "Manufacture(ing)" means to compound, blend, extract, infuse, or otherwise make or prepare a cannabis product. "Marijuana" means "cannabis", as that term is defined in this Chapter 3.60. "MAUCRSA" means Division 10 (commencing with Section 26000) of the State Business and Professions Code and any regulations promulgated thereunder. "Medicinal cannabis" or "medicinal cannabis product" means cannabis or a cannabis product for use by a qualified patient. "Owner" means any of the following: (a). A person with an ownership interest in a cannabis business: (b). The chief executive officer, secretary, or treasurer / chief financial officer of a nonprofit cannabis business: or (c). A member of the board of directors of a nonprofit cannabis business. "Patient" or "qualified patient" means a person who is entitled to the protections of Section 11362.5 of the State Health & Safety Code (the Compassionate Use Act of 1996) and includes a person issued an 24 identification card issued pursuant to Article 2.5 of Chapter 6 of Division 10 of the State Health & Safety Code. "Person" means an individual, firm, partnership, ioint venture, association, corporation limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit and includes the plural as well as the singular number. "Person with an identification card" shall have the meaning given to that term in Section 11362.7 of the State Health & Safety Code ("an individual who is a qualified patient who has applied for and received a valid identification card pursuant to fArticle 2.5 of Chapter 6 of Division 10 of the State Health & Safety Code. . "Sale" means any sale, exchange, or barter or other transaction for any consideration. "State" means the State of California. "Tax Administrator" means the Director of Finance of the City, the Director of Finance's designee(s). or anv other City officer charged with the administration of the provisions of this Chapter. "Testing laboratory" means a laboratory, facility, or entity in the City that offers or performs tests of cannabis or cannabis products. 3.60.040. Tax Imposed. (a) There is established and imposed upon each person who is engaged in business as a cannabis business an annual Cannabis Business Tax at the rates set forth in this Chapter 3.60. Such Tax is payable regardless of whether the business is operating lawfully in the City or unlawfully. The City's acceptance of a Cannabis Business Tax payment from a cannabis business operating illegally shall not constitute the City's approval or consent to such illegal operations. (b) Medicinal Retailers. The Cannabis Business Tax upon every person who engages in business as a retailer of medicinal cannabis or medicinal cannabis products shall be at the following annual rate: (1) The tax rate upon the effective date of this Chapter 3.60 shall be two percent (2%) of the gross receipts derived from the retail sale of medicinal cannabis or medicinal cannabis products. Such tax rate may increase or decrease by resolution adopted by the City Council but shall not exceed the maximum tax rate of four percent (4%) without voter approval. (c) Adult-use Retailers. The Cannabis Business Tax upon every person who engages in business as a retailer of adult-use cannabis or adult-use cannabis products shall be at the following annual rate: (1) The tax rate upon the effective date of this Chapter 3.60 shall be three percent (3%) of the gross receipts derived from the retail sale of adult-use cannabis or adult-use cannabis products. Such tax rate may increase or decrease by resolution adapted by the City Council but shall not exceed the maximum tax rate of five percent (5%) without voter approval. (d) Distribution. The Cannabis Business Tax upon every person who engages in business in distribution shall be at the following annual rate: (1) The tax rate upon the effective date of this Chapter 3.60 shall be one percent (1%) of the gross receipts derived from distribution. Such tax rate may increase or decrease by resolution adopted by the City Council but shall not exceed the maximum tax rate of one percent (1%) without voter approval. 25 (e) Manufacturing. The Cannabis Business Tax upon every person who engages in business in manufacturing shall be at the following annual rate: (1) The tax rate upon the effective date of this Chapter 3.60 shall be one percent (1%) of the gross receipts derived from manufacturing. Such tax rate may increase or decrease by ordinance adopted by the City Council but shall not exceed the maximum tax rate of one percent (1%) without voter approval. (f) Cultivation. The Cannabis Business Tax upon every person who engages in business in cultivation shall be at the following annual rate: (1) The tax rate upon the effective date of this Chapter 3.60 shall be one percent (1%) of the gross receipts derived from cultivation. Such tax rate may increase or decrease by ordinance adopted by the City Council but shall not exceed the maximum tax rate of one percent (1%) without voter approval- (g) Testing Laboratory. The Cannabis Business Tax upon every person who engages in business as a testing laboratory shall be at the following annual rate: (1) The tax rate upon the effective date of this Chapter 3.60 shall be one percent (1%) of the gross receipts derived as a testing laboratory. Such tax rate may increase or decrease by ordinance adopted by the City Council but shall not exceed the maximum tax rate of one percent (1%) without voter approval. 3.60.050. Exemptions from the Tax. The provisions of this Chapter 3.60 shall not apply to personal cannabis cultivation as the MAUCRSA or any subsequent State legislation regarding the same. This Chapter 3.60 shall not apply to personal use of cannabis that is specifically exempted from State licensing requirements and that meets the definition of personal use or equivalent terminology under State law. 3.60.060. Reporting and Remittance of Tax. The Cannabis Business Tax imposed by this Chapter 3.60 shall be imposed on a fiscal year basis and shall be due and payable in quarterly installments as follows: (a) The owner(s) or manager(s) of each cannabis business shall, on or before the last day of the month following the close of each fiscal year quarter, prepare and submit a tax statement on the form prescribed by the Tax Administrator and remit to the Tax Administrator the Tax due. The Tax due shall be no less than the quarterly installment due, but the taxpayer may prepay any amount of Tax at any time. (b) Tax statements and payments for all outstanding Taxes owed the City are immediately due to the Tax Administrator upon cessation of a cannabis business for any reason. (c) The Tax Administrator may, at the Tax Administrator's reasonable discretion establish shorter reporting and payment periods for any taxpayer as the Tax Administrator reasonably deems necessary to ensure collection of the Tax. 3.60.070. Nonpayment of Cannabis Business Tax Penalties and Interest Established by Ordinance. (a) Any person who fails or refuses to pay any Cannabis Business Tax required to be paid pursuant to this Chapter 3.60 on or before the due date shall pay penalties and interest as follows: 26 (1) A penalty equal to ten percent (5%) of the amount of the Tax in addition to the amount of the Tax, plus interest on the unpaid tax calculated from the due date of the Tax at the rate of one percent (1%) per month. (2) If the Tax remains unpaid for a period exceeding three (3) calendar months beyond the due date, an additional penalty equal to twenty-five percent (25%) of the amount of the Tax plus interest at the rate of one percent (1%) per month on the unpaid tax and on the unpaid penalties. (3) These penalty provisions shall not be construed to preclude or limit the enforcement of the penal provisions of this Chapter 3.60 or the Code. (b) Whenever a check or electronic payment is submitted in payment of a Cannabis Business Tax and the payment is subsequently returned unpaid by the bank, the taxpayer will be liable for the Tax amount due plus any fees, penalties and interest as provided for in this Chapter 3.60 and any other amount allowed under State law. 3.60.080. Administration of the Tax. (a) It shall be the duty of the Tax Administrator to collect the taxes, penalties fees and perform the duties required by this Chapter 3.60. (b) For purposes of administration and enforcement of this Chapter 3.60 generally, the Tax Administrator may from time to time promulgate such administrative interpretations rules and procedures consistent with the purpose, intent, and express terms of this Chapter 3.60 as he or she deems reasonably necessary to implement or clarify such provisions or aid in enforcement including but not limited to: (1) Provide to all cannabis business taxpayers forms for the reporting of the Tax' (2) Provide information to any taxpayer concerning the provisions of this Chapter 3.60 (3) Receive and record all taxes remitted to the City as provided in this Chapter 3.60 (4) Maintain records of taxpayer reports and taxes collected pursuant to this Chapter 3.60 (5) Assess penalties and interest to taxpayers pursuant to this Chapter 3.60 and (6) Determine amounts owed and enforce collection pursuant to this Chapter 3.60. 3.60.090. Appeal Procedure. Any taxpayer aggrieved by any decision of the Tax Administrator with respect to the amount of tax interest, penalties, and fees, if any, due under this Chapter 3.60 may appeal to the City Council by filing a notice of appeal with the City Clerk within forty-five (45) calendar days of the serving or mailing of the determination of Tax due. The City Clerk, or his or her designee shall fix a time and place for hearing such appeal and the City Clerk, or his or her designee, shall give notice in writing to such cannabis business at the last known place of address. The finding of the City Council shall be a final administrative decision subiect to judicial review and remedies, and shall be served upon the appellant in the manner prescribed by this Chapter 3.60 for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice. 3.60.100. Constitutionality and Legality. 27 This Tax is intended to be applied in a manner consistent with the United States and State Constitutions and State law. None of the Tax provided for by this Chapter 3.60 shall be applied in a manner that causes an undue burden upon interstate commerce, a violation of the equal protection or due process clauses of the Constitutions of the United States or the State or a violation of any other provision of the State Constitution or State law. If a person believes that the Tax, as applied to him or her, is impermissible under applicable law, he or she may request that the Tax Administrator release him or her from the obligation to pay the impermissible portion of the Tax. 3.60.110. Apportionment. If a cannabis business subject to the Tax is operating both within and outside the City, it is the intent of the City to apply the Cannabis Business Tax so that the measure of the Tax fairly reflects the proportion of the taxed activity actually carried on in the City. To the extent federal or State law requires that any tax due from any taxpayer be apportioned, the taxpayer may indicate said apportionment on his or her tax return. The Tax Administrator may promulgate administrative procedures for apportionment as he or she finds reasonably useful or necessary. 3.60.120. Audit and Examination of Records and Equipment. (a) For the purpose of ascertaining the amount of Cannabis Business Tax owed or verifying any representations made by any taxpayer to the City in support of his or her tax calculation, the Tax administrator shall have the power to inspect any location where commercial cannabis activity occurs and to audit and examine all books and records (including but not limited to bookkeer ing records, State and federal income tax returns, and other records relating to the gross receipts of the business) of owners and managers of the cannabis businesses. In conducting such investigation the Tax Administrator shall have the power to inspect any equipment such as computers or point of sale machines, that may contain such records. (b) It shall be the duty of every person liable for the collection and payment to the City of any tax imposed by this Chapter 3.60 to keep and preserve, for a period of at least seven (7) years all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Tax Administrator or his/her designee shall have the right to inspect at all reasonable times. 3.60.130. Payment of Tax Does not Authorize Unlawful Conduct. (a) The payment of a Cannabis Business Tax required by this Chapter 3.60 and its acceptance by the City, shall not entitle any person to carry on any cannabis business unless the person has complied with all of the requirements of the Code, MAUCRSA, and all other applicable State laws. (b) No Tax paid under the provisions of this Chapter 3.60 shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any business in violation of any local or State law. (c) Nothing in this Chapter 3.60 shall be construed as in conflict with State or federal law. (d) It shall be the responsibility of the owners and managers of a cannabis business to ensure that the cannabis business is, at all times, operating in a manner compliant with the protection of public health, safety, and community standards, including all applicable State and local laws and regulations, including any subsequently enacted State or local law or regulatory, licensing or certification standards or requirements and any specific additional operating procedures or requirements, which may be imposed as conditions of approval of any State or City license. 3.60.140. Other Licenses, Permits Taxes Fees or Charges. 28 Nothing contained in this Chapter 3.60 shall be deemed to repeal, amend, be in lieu of, replace or in any way affect any requirements for any permit or license required by, under or by virtue of any other provision of this Code or any other ordinance or resolution of the City Council, nor be deemed to repeal amend be in lieu of, replace or in any way affect any tax, fee, or other charge imposed, assessed or required by, under or by virtue of any other provision of the Code or any other ordinance or resolution of the City Council. Any references made or contained in any other provision of the Code to any licenses, license taxes, fees, or charges, or to any schedule of license fees, shall be deemed to refer to the licenses, license taxes, fees or charges, or schedule of license fees, provided for in other provisions of this Code. 3.60.150. Deficiency Determinations. If the Tax Administrator is not reasonably satisfied that any statement filed as required under the provisions of this Chapter 3.60 is correct, or that the amount of tax is correctly computed, he or she may compute and determine the amount to be paid and make a deficiency determination upon the basis of the facts contained in the statement or upon the basis of any information in his or her possession or that may come into his or her possession within two (2) years of the date the tax was originally due and payable. One or more deficiency determinations of the amount of tax due for a period or periods may be made. When a person discontinues engaging in a business, a deficiency determination may be made at any time within two (2) years thereafter as to any liability arising from engaging in such business whether or not a deficiency determination is issued prior to the date the tax would otherwise be due. Whenever a deficiency determination is made, a notice shall be given to the person concerned in the same manner as notices of assessment are given in this Chapter 3.60. 3.60.160. Failure to Report: Nonpayment: Fraud. (a) Under any of the following circumstances, the Tax Administrator may make and give notice of an assessment of the amount of tax owed by a person under this Chapter 3.60 at any time: (1) If the person has not filed a complete statement required under the provisions of this Chapter 33 (2) If the person has not paid the Tax due under the provisions of this Chapter 3.60 (3) If the person has not, after demand by the Tax Administrator, filed a corrected statement, or furnished to the Tax Administrator adequate substantiation of the information contained in a statement already filed, or paid any additional amount of tax due under the provisions of this Chapter 3.60: or (4) If the Tax Administrator determines that the nonpayment of any Cannabis Business Tax is due to fraud, a penalty of twenty-five percent (20%) of the amount of the Tax shall be added thereto in addition to penalties and interest otherwise stated in this Chapter 3.60 and any other penalties allowed by law. (b) The notice of assessment shall separately set forth the amount of any tax known by the Tax Administrator to be due or estimated by the Tax Administrator, after consideration of all information within the Tax Administrator's knowledge concerning the business and activities of the person assessed, to be due under each applicable section of this Chapter 3.60 and shall include the amount of any penalties or interest accrued on each amount to the date of the notice of assessment. 3.60.170. Tax Assessment: Notice Requirements. The notice of assessment shall be served upon the person either by personal delivery, by overnight delivery by a nationally-recognized courier service, or by a deposit of the notice via United States Postal Service 29 Priority Mail Express (or a comparable service with another carrier or with the United States Postal Service should Priority Mail Express no longer be provided) with proof of delivery, postage prepaid thereon addressed to the person at the address of the location of the business or to such other address as he or she shall register with the Tax Administrator for the purpose of receiving notices provided under this Chapter 3.60: or, should the person have no address registered with the Tax Administrator for such purpose, then to such person's last known address. For the purposes of this Section a service by overnight delivery shall be deemed to have occurred one (1) calendar day following deposit with a courier and service by United States Postal Service Priority Mail Express shall be deemed to have occurred three (3) calendar days following deposit of the notice. 3.60.180. Tax Assessment: Hearing Application and Determination. Within forty-five (45) calendar days after the date of service the person may apply in writing to the Tax Administrator for a hearing on the assessment. If application for a hearing before the City is not made within the time herein prescribed, the tax assessed by the Tax Administrator shall be a final administrative decision, subiect to iudicial review. Within thirty (30) calendar days of the receipt of any such application for hearing, the Tax Administrator shall cause the matter to be set for hearing before him or her no later than thirty (30) calendar days after the receipt of the application unless a later date is agreed to by the Tax Administrator and the person requesting the hearing. Notice of such hearing shall be given by the Tax Administrator to the person requesting such hearing not later than fifteen (15) calendar days prior to such hearing. At such hearing said applicant may appear and offer evidence why the assessment as made by the Tax Administrator should not be confirmed and fixed as the tax due. After such hearing the Tax Administrator shall determine and reassess the proper tax to be charged and shall give written notice to the person in the manner prescribed in this Chapter 3.60 for giving notice of assessment. 3.60.190. Relief from Taxes: Disaster Relief. (a) If a cannabis business is unable to comply with any Tax requirement due to a disaster, the cannabis business may notify the Tax Administrator of this inability to comply and request relief from the tax requirement. A request for relief must clearly indicate why relief is requested, the time period for which the relief is requested and the reason relief is needed for the specific amount of time. (b) To obtain relief, the cannabis business agrees to grant the Tax Administrator or designee(s) access to the location where the cannabis business has been impacted due to a disaster. (c) The Tax Administrator, in his or her reasonable discretion, may provide relief from the Cannabis Business Tax requirement for businesses whose operations have been impacted by a disaster if such tax liability does not exceed $25 000.00. If such tax liability is $25 001.00 or more than such relief shall only be approved by the City Council. (d) Temporary relief from the Cannabis Business Tax may be granted for a reasonable amount of time as determined by the Tax Administrator or the City Council as applicable in order to allow the cannabis business time to recover from the disaster. (e) The Tax Administrator or City Council as applicable may require that certain conditions be followed in order for a cannabis business to receive temporary relief from the Cannabis Business Tax requirement. (f) For purposes of this Section, "disaster" means including but not limited to natural disasters (such as, but not limited to, fires, explosions, earthquakes drought tidal waves and floods) war, hostilities, invasion, act of foreign enemies mobilization requisition or embargo rebellion revolution, insurrection, or military or usurped power, or civil war riot commotion strikes go slows, lock outs or disorder: or acts or threats of terrorism. 30 3.60.200. Conviction for Violation: Taxes not Waived. The conviction and punishment of any person for failure to pay the required Cannabis Business Tax shall not excuse or exempt such person from any civil action for the Tax debt unpaid at the time of such conviction. No civil action shall prevent a criminal prosecution for any violation of the provisions of this Chapter 3.60 or of any State law requiring the payment of all taxes. 3.60.210. Violation Deemed Misdemeanor. Each and every material violation of the provisions of this Chapter 3.60 may be prosecuted as a misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars ($1 000.00) or imprisonment in the County jail for a period of not more than six (6) months or by both such fine and imprisonment. Each day a material violation is committed or permitted to continue shall constitute a separate offense. 3.60.220. Remedies Cumulative and Not Exclusive. The remedies provided herein are not to be construed as exclusive remedies. The City is authorized to pursue any proceedings or remedies provided by law. SECTION 7. Categorically Exempt From CEQA. The People of the City find that the actions contemplated by the Measure, including the issuance of commercial cannabis business permits are categorically exempt from the California Environmental Quality Act ("CEQA") under Section 15060(c)(2) and Section 15060(c)(3) of Title 14 of the State Code of Regulations (an activity is not subject to CEQA if it will not result in a direct or reasonably foreseeable indirect physical change in the environment or is not a �oject") and the holding by the State Supreme Court in Tuolumne Jobs & Small Business Alliance v. Superior Court (2014) 59 Cal.4th 1029 (that CEQA review is not required before direct adoption of initiative). Further, the People of the City find that cannabis retailers are a use permitted by right in certain zoning districts within the City. As permitted in those zoning districts, cannabis retailers are similar to already existing permitted general uses in those zoning districts with the only difference being the type of product being delivered or sold. SECTION 8. Conflicting Measures. The People of the City find and declare that the provisions of the Measure relating to the regulation of commercial cannabis activity in the City may conflict with one or more provisions of other initiative measures. It is the intent of the People that if the Measure receives a greater number of affirmative votes than a conflicting measure at the same election, this Measure shall prevail in its entirety over a conflicting measure. SECTION 9. Severability. If any provision, section, paragraph, sentence, phrase, or word of the Measure is rendered or declared invalid, illegal, or unconstitutional by any final action in a court of competent jurisdiction or by reason or any preemptive legislation, such unconstitutionality illegality or invalidity shall only affect such provision, section, paragraph, sentence, phrase, or word and shall not affect or impair any remaining provisions, sections, paragraphs, sentences, phrases, or words, or the application of the Measure to any other person or circumstance, and to that end, the provisions hereof are severable. It is hereby declared to be the intention of the People of the City that that the Measure would have been adopted had such unconstitutional illegal or invalid provision, section, paragraph, sentence, phrase, or word not been included herein. SECTION 10. Liberal Construction. The Measure is an exercise of the initiative power of the People of the City to provide for safe and regulated access to cannabis and cannabis products, and shall be liberally construed to effectuate that purpose. SECTION 11 Legal Defense. If approved by a simple majority of voters, and thereafter challenged in court of competent jurisdiction, the City shall defend the Measure in such court of competent jurisdiction. 31 The People of the City by approving this Measure by a simple majority of voter hereby declare that the proponent(s) of the Measure have a direct and personal stake in defending the Measure from constitutional or statutory challenges to the Measure's validity or implementation. In the event the City fails to defend the Measure, or the City fails to appeal an adverse judgment against this Measure, in whole or in part, in any court of competent jurisdiction, the Measure's proponent(s) shall be entitled to assert his, her, or their direct personal stake by defending the Measure's validity and implementation in any court of competent jurisdiction and shall be empowered by the People through this Measure to act as agents of the People of the City, and the City shall indemnify the proponent(s) for reasonable attorneys' fees. SECTION 12. Effective Date. The Measure shall be in full force and effect upon the tenth day following certification by the City Council of the election returns indicating passage of the Measure by a majority of the voters casting votes on the Measure. 32