Recommendation to receive and file a report on the Cannabis Equity Program; direct City Attorney to prepare an ordinance to allow shared-use cannabis manufacturing in Long Beach; and, direct staff from the City Manager Department to prepare a feasibility analysis on licensing and regulating non-storefront (delivery-only) cannabis retail facilities in Long Beach.  (Citywide)
Thank you. And we have two items left, 16 and 17. So we'll do item 16. Or from city manager recommendation to receive and file a report on the cannabis equity program. Direct City Attorney to prepare an ordinance to allow shared use cannabis manufacturing and direct staff to prepare a feasibility analysis on licensing and regulating delivery only cannabis retail facilities citywide. Thank you, Mr. Moto culture in this. Over to you. Look, I know we have a very large cap presentation, so obviously we want to get through this presentation. Let's just do it expeditiously and I'll turn it over to you. Sir. I will turn it over to Kevin Jackson, RW City Manager and AJ Callery, our assistant to the city manager, to go through the presentation. Thank you. Tom J. Cleary will conduct a presentation. Thank you. Again, my name is Jake Cleary. I work for the Office of Cannabis Oversight and the City Manager's Office. On July 7th, 2020, the City Council directed staff to explore ways to strengthen the cannabis social equity program and expand equitable ownership opportunities. In Long Beach on August 5th, 2020, staff released a memorandum in response to City Council's request. The memorandum identified three policy options for the City Council to improve cannabis business ownership opportunities in the city. On December 1st, 2020, staff presented these policy options to the Economic Development and Finance Committee. The committee then voted to refer two of those three options to the City Council for consideration. In this presentation, I will go through those options referred by the Committee before turning it back to the City Council for Input and Policy Direction. Before discussing policy options, I'd first like to provide some background on the cannabis equity program. The program was first adopted by the City Council in July 2018 as part of the Adult Use Cannabis Ordinance. The purpose of the program is to promote opportunity in the industry for individuals negatively impacted by the prior criminalization of cannabis. Numerous studies have shown that before legalization, low income minority groups were disproportionately arrested and convicted for cannabis offenses. Despite similar cannabis usage rates, one of the great challenges of cannabis legalization is the fact that low income minority owned businesses have been significantly underrepresented in the newly regulated cannabis market. Recognizing this trend, the city council voted to create a cannabis equity program. To qualify for the program, an individual must have a family income below 80% of the area. Median income, which is about $90,000 for a family of four, have a net worth below $250,000 and satisfy at least one of three criteria having to do with residency , arrest, history or unemployment status. Program benefits include access to application workshops hosted by city staff fee waivers and expedited application approvals. In addition, the city was awarded funds from the state of California to provide direct grants to equity applicants. A portion of those funds will also be used to build a technical assistance program. It is important to note, however, that these benefits by no means guarantee a license as currently designed. These benefits are meant to act as an incentive for equity applicants to move through the licensing process. And as it turns out, those incentives have not been enough to push the vast majority of equity applicants through the licensing process. To date, the city has issued one license to an equity owned business, with a total of five pending business license applications from equity applicants. By comparison, the city has had 79 residents qualify for the program. The main reason for the discrepancy between interest and success within the program is the significant barriers that exist to business ownership in the cannabis industry. Those barriers include access to capital, access to Green Zone, real estate, access to banking, construction and equipment costs, access to professional services, restrictions on the license types currently available in the city. The fact that those license types operated operate within a saturated and competitive marketplace. And finally, a restrictive statewide regulatory system. To be blunt, most of these factors are beyond the city's control. Collectively, these barriers highlight the fundamental challenge of cannabis equity programs, not just in Long Beach, but really across the state and country. That is, that the cannabis industry is fundamentally one of the more challenging industries to promote equitable small business ownership. To demonstrate this point, I have prepared a sample list of startup costs for a cannabis manufacturing facility. These costs are at the lower end of the spectrum for what it would take to build a manufacturing business and can easily grow into the millions of dollars depending on the scale of operation. Specifically, startup costs include lease payments for a minimum of one year while the facility is built out. Construction machinery installation which can include extraction infusion printing and packaging equipment. Initial cannabis inventory. Staffing costs prior to opening. Professional services, including brokers, attorneys and architects. And other startup costs, including security equipment, vehicles, insurance marketing and other expenses. The city has received funds from the state to help with these costs, but grant funds are only enough to cover a portion of the expenses you see on the slide. In light of these significant barriers to entry into the market, staff works to identify three policy options for the City Council to consider for strengthening equity ownership opportunities in Long Beach. The options identified include shared use, manufacturing, delivery, only retail and additional dispensary licenses. These three business types represent more realistic pathways to cannabis business ownership for individuals with limited resources by offering licenses with a lower startup cost, reduced facility footprint, fewer technical requirements, and a less saturated marketplace. However, it is important to emphasize once more that these options do not guarantee success for equity applicants, and that significant challenges remain for anyone seeking to enter the competitive cannabis market. The first option is to allow cannabis shared use manufacturing in the city, also known as Type S licenses. Shared use manufacturers were first authorized by the California Department of Public Health in 2018, but is currently prohibited in Long Beach per the municipal code. Type S licenses allow multiple businesses to produce cannabis products within a single facility. The closest comparison to this would be a shared commercial kitchen where multiple businesses are able to rent space to produce food products for consumers. It should be noted that Long Beach already licenses cannabis manufacturers locally, with 25 businesses currently operating in the city under this business type. Under existing regulations, however, these businesses must operate out of separate facilities, which can require hundreds of thousands, if not millions of dollars to build. This has had the effect of restricting access to the license types to individuals with significant startup capital. The advantage of type s licenses is that it provides small businesses the opportunity to manufacture cannabis products without necessarily having to invest 100% of the startup costs within the facility. Businesses can either partner together to build a shared space, or they can rent space within an existing license facility. One disadvantage to this license type is the fact that initial investment to build a new shared use facility can still be significant. Cities that currently license shared use manufacturing include Sacramento, Santa Ana and Oakland, as well as the county of Santa Cruz. This slide shows some of the recent examples of shared use facilities currently under development in two of those jurisdictions. The second option is to issue licenses for delivery only retail, also known as non storefront retailers. Delivery only retailers are authorized to conduct cannabis sales exclusively by delivery. They must remain closed to the public at all times and therefore expected to have less impact on neighborhoods than do storefront retailers. This is not a new concept. Long Beach already allows its existing storefront retailers to deliver cannabis to residents in the city. However, many of these businesses choose not to deliver, given their primary focus on storefront sales. As a result, delivery only licenses represent an opportunity for equity owned businesses to participate in the regulated cannabis market. Cities that currently licensed delivery only retail include the cities of Oakland, San Francisco and Sacramento. The city of Los Angeles also recently announced that they will begin accepting applications for delivery only licenses. The third option is to make available more dispensary licenses in Long Beach for equity applicants. Dispensaries are businesses that sell cannabis goods to customers on site within licensed business premises. This third option is not part of the recommendation before the city council tonight. Instead, the Economic Development and Finance Committee requested staff to return to the committee in six months for further discussion on this topic. The city of Sacramento is one example of a jurisdiction that voted to move forward with ten additional dispensary licenses after initially approving 30 dispensary licenses. However, Sacramento is still in the initial phases of implementing this new program, and therefore more time will be needed to report back on results. To summarize, there are two recommendations before the city council today has referred by the Economic Development and Finance Committee. Recommendation number one is to direct the city attorney's office, city attorney's office to prepare an ordinance to allow for shared use manufacturing in Long Beach. Recommendation number two is to direct staff to prepare a feasibility analysis for licensing and regulating non storefront, also known as delivery only cannabis retail facilities, and refer those findings to the City Council for Input and Policy Direction. That concludes my presentation and I am available for questions. Thank you very much. Let me first do any public comment that we have and then we'll go to the Council. Our first speaker is Carlos Zepeda. Carlos Zepeda. Good evening, Mayor and City Council. My name is Peter. And I have been verified as a social equity applicant in the city of Long Beach since 2018. The Times are half measures regarding the kind of social equity program in the city of Long Beach should be over. We should be leading the way, in example, for other California. Cities to. Follow. Originally, when the City of Long Beach created and implemented the licensing process for recreational cannabis, there was very little consideration of social equity applicants. The Lobby social equity program from July 2018 through July 2020 was halfhearted, to say the least. The current social equity program has made some improvements, but there's still significant progress that needs to be made. Recognize the errors in the social IP program thus far and dedicate the time and energy to resolve these issues. The City of Long Beach said that the city ordinance that would give priority to already existing social equity applicants to apply for delivery licenses by the city of Los Angeles is currently trying to do. This will allow us the opportunity to create generational wealth and equity in the cannabis industry for those who have been in the program for several years. My older brother rest in peace and my uncle both spent time in jail for selling the same plant that's creating. Additional wealth. For current cannabis operators. I think it's very safe to assume that a majority, majority of the current cannabis operators in the city of Long Beach have not been directly affected by the war on drugs. Again, creating and implementing a city ordinance that will allow social equity applicants an opportunity to obtain delivery licenses as part of the solution . To this problem. Thank you for your time. Thank you. Our next speaker is Jade S. Jade S. Hello. Hello. City Council members. My name is page three Marseille. I'm just wanting to talk a little bit about the way that this current system is set up such that social equity applicants do not have an opportunity to obtain licenses that allow them to sell direct to consumers. If delivery licenses are awarded, then social equity applicants will not have to rely on the relationships with non social equity applicants to sell our product and in this way it provides. Social equity and applicants. A fair chance of success by allowing them to apply for either dispensary or delivery licenses. We should really learn from other social equity programs that have failed in the past, such as the City of Los Angeles, that had numerous issues with social equity applicants in which they were taken advantage of by non social equity applicants. Non social equity applicants who happen to be dispensary owners have control over the market right now and can determine both prices and make deals that eat into the profit margins of social equity applicants. If Long Beach can allow for social equity, applicants have licenses that are both currently available in addition to dispensary delivery licenses that will really give us a chance to truly compete and gain equity in the cannabis market. After all, it's not just about getting socially equitable and started, but it's also about allowing an operative to succeed in the long term. Thank you so much for your time. Thank you. That concludes public comment for this item. Thank you. I'm going to go back to the council. I have a motion by Vice Mayor Richardson and a second by Councilwoman Allen. Vice Mayor Richardson. Thank you so much, Mr. Mayor. Just a little bit of background on this discussion. You know, after unrest in our city and in alignment with the discussions, the framework for reconciliation, community meeting process, we made a we made a recommendation at City Council to go and take a look at this program to see how we can targeted and look for additional opportunities for ownership and to hone the program that we have that we have in place. Staff conducted a high level study submitted a memo. That memo came to our economic development committee where we had a great deal of discussion on this and public comment and forwarded these three recommendations to the City Council. And I say three because we recommended to move forward with an ordinance on shared use. Secondly, two, to go ahead and take the next step, next step of study on delivery, to prepare, put us in a position to create an ordinance for delivery industry. And then thirdly, it wasn't just to not move forward, but rather we want to send the right signal here that there is there are more immediate opportunities right now with fair use and delivery and delivery only, and to create an immediate economic impact. And then once that's done well, we'll look at the next phase, which could be defense, but that's not what we're doing today. So. That's right. So we're. So it wasn't a recommendation to not move forward. The recommendation was we want to start with these and staff recommend that the advise that these two were the most based and ready to go. So that went to the Economic Development Committee and that is now here before us at city council. And I want to move this recommendation now to give a little bit further direction. It's important to understand the landscape of this equity discussion. Not many jurisdictions have gotten this right. It's a difficult thing to land. It's a nail. But jurisdictions that continue to work at it make progress. For example, they just highlighted Sacramento is continuing to work at it and other jurisdictions continue to work on it. I want staff to feel comfortable. You know, cannabis historically has been a hey hesitate at every step of direction from the council. I think when you're creating an industry, you really want to give staff some creativity and some flexibility, you know, to meet with industry and, you know, work out the kinks and come back as needed to the city council when they need additional direction. And so within within my motion, I want to really express that sentiment. And I've talked with I've expressed the sentiment of staff and with the city manager, and they understand that the sentiment here is that this should be a living, breathing process and as needed, bring it back to the City Council for Refinement. And that's my hope of what we can accomplish here today is move forward these two and leave some flexibility. The last thing I'll say is. You know, regulation of an industry can actually create industry and create demand and create, you know, create opportunity and where our economy is going to transition. Right now, we're in a transitioning economy. And, you know, with with you know, if we look at regulations related to air quality, other things, an entire sort of industry of new technology and and supply chain and all these things come out of regulation at time. And we're in a moment right now where there is an opportunity to create new industry with delivery only. Let's make sure that we target that to have as great of an impact as possible on moving the needle on equity. We know that. We know that we have a k-shaped recovery, meaning most folks of middle income, high income. They're going to they're already on the path to recovery. But folks there in a very low income sector, they are continuing to show low unemployment rates and they're continuing to decline. They have not turned around yet. That's a k-shaped recovery. That is the fact. And we have and this is one of many tools that we have to align with our recovery strategy. So that's it. That's my motion. And I look forward to hearing from the health. Thank you, Councilwoman Allen. Yeah. Thank you for that. And I think this proposal is just a great way to, you know, expand business ownership opportunities to individuals in the city that have been disenfranchized by prior cannabis laws. And I want to congratulate Carlos, who was one of our first speakers on the approval to the program. I am super excited for you regarding the delivery only cannabis business feasibility study. I do look forward to seeing those findings. I feel like this is a great way to grow the industry without council action on more storefronts, which I believe right now are capped at around 32. And I do believe that also that a lot of the delivery that's happening currently in the city is from the illicit market. So regulating and sanctioning this may curtail some of those activities. One of the things I want to ask, I know in the presentation I saw that you're recommending that the delivery industry be cap the uncapped . And I don't truly I don't understand that. It seems like to me that it's better to be capped. You know, too many businesses that are doing delivery only may hurt the folks that we are helping getting you know, get into the industry. And this is, like you said, this is a very challenging industry to get into. So I am concerned with over saturating the market and I want to see all these folks who are getting into this thrive. So just a couple of questions that I have is, first of all, how large is the state grant? That we have to assist equity applicants. How much do we have left and do you know how much has been exhausted? And then my second question is how many applicants have applied for that? And the reason I'm asking that question and how many get through, because if we have, you know, 100 Apple kids and only ones getting through, then perhaps we need to go back and reexamine our process for getting these approved. And then also another question that just came up as I was watching your presentation is you said that a portion of the fees could be covered. And depending on how much grant money we have, is there an opportunity to cover all of those fees? So those are my questions. Thank you for for those questions. So to answer your first question. The state awarded us two grant funds, one through the Bureau of Cannabis Control, the other through the governor's office called Cannabis. The BTC grant was for approximately $960,000. The Go Bears Award was for $2.6 million. Of that amounts, approximately 580,000 has been granted out to equity applicants to date. We continue to have grant funds available, and our hope is that by expanding access to new business opportunities, we'll be able to utilize all of the grant funds. However, if throughout grant implementation, it turns out that we're not on pace to use all the grant funds. We will work with equity applicants to determine if there are other ways or new milestones that we can come up with to allocate all the funds within the deadline that the state created. In terms of the number of equity applicants that have applied and received funds, I do not have that number in front of me right now. So we will have to follow up with you on on that statistic for your third question. Four for fees. We are currently waiving all fees for equity applicants. So that includes application fees, administrative use permit or conditional use permit fees, building plant check fees, inspection fees. They are all currently waived using the grant funds that were awarded by the state. Thank you. All right. So the mayor stepped away. So the next speaker is council member Sarah. So I want to thank the Economic Development and Finance Committee and staff for bringing this up for the committee for bringing foreign staff on the work on this. And given the historic criminalization of cannabis, the consequences have been devastating on communities, low income communities of color, which is why I strongly support this cannabis social equity program. I think that it largely impacts a lot of the residents in my district. You know how, however, though, I think the criteria needs to to be targeted specifically to low income disadvantaged communities. And so I do agree with the qualifying factors are criteria of having a family income below 80% of the area median income and have a were a net worth below $250,000. And to satisfy at least one of the following, which is lived in a limited census tract for a minimum of three years, where at least 51% of current residents have a household income at or below 80% of the am-I, and also was arrested or convicted for a crime relating to the sales possession. Use our cultivation of cannabis in Long Beach prior to November eight, 2016 that would have been prosecuted as a misdemeanor or a citation under California law. And and but but I would like to, if you will, take this, Vice Mayor Richardson, since you made the motion to remove, is a Long Beach resident currently receiving unemployment benefits . Thank you, Councilmember. Is that all your comment? Or did you have additional comment? No, that is it. I'll say that. That is it. Thank you. I think it. I certainly think it makes sense. I mean, that was staff's original recommendation. And it doesn't mean that someone who's unemployed can't receive a job or apply for a job in the industry, that those jobs or establish a new business within the industry, you know, but people can still apply. But that wouldn't count toward equity credit unless you meet those criteria. So I think what you're describing makes sense given sort of the intent of the program. So absolutely that is accepted. Next is council members and they have. Thank you, Vice Mayor. I'm having trouble with my meeting. And I'm meeting today. Please excuse me. But I think I think that, first of all, I just wanted to say thank you to the staff and thank you to Jay for your great presentation to me. I think that, you know, this is very important going forward, especially in this industry and especially in these times. But I think Councilmember Sara just asked my question that I had. So thank you council member for for beating me to it. I just wanted to to get a little bit more clarification. I know that. You know, this industry is very new. So I know that, you know, we're still working everything out. And I think that this is a really great way to do that. I know that there was a specific mention about, you know, about how these requirements, the requirements are towards people who have been criminalized in the past. So I'm really happy to see that we're taking that into consideration. So that was actually that was my question to get a little bit more clarification on that. So Councilmember Sorrell actually posed the question and it was answered by Steph, but I just also wanted to say thank you. Fantastic. Thank you. Next up, we have Councilmember Price. Thank you. So I want to thank staff for the presentation. Just a few comments. I know that when we were talking about the brick and mortar operations several years ago, one of the concerns that came up when I think I think I was mentioning the idea of the not having brick and mortar at first phasing into it with a delivery only model. And the concern at that time was that there would be no enforcement mechanism in place to distinguish between licensed Long Beach businesses and those that might be servicing through weed maps and other third party connecting entities. So we've had several years of best practices now, so. A-J Could you maybe speak to that a little bit? Are there different enforcement mechanisms that are now available or operational models that are available that can help alleviate the concern of the illicit market? Taking over the delivery model. Of the illicit delivery market continues to be a challenge. It is incredibly difficult to enforce against. It's a challenge that nearly every city in the state faces. We do have an enforcement program. It's a tax task force model. It's a complaint driven model. It's one that relies on staff from business licensing, code enforcement, health departments, city attorney's office, fire department. We have enforce against illegal delivery businesses, but it has been and continues to be a Whac-A-Mole approach where they they pop up at various locations. That part of what drives the illicit market, though, however, is a lack of access to the legal market. So one effective approach to dealing with the illegal delivery services is to provide consumers at least access to a legal source and allowing for licensed legal delivery services because it gives consumers a choice and it gives them a choice to purchase tested products, regulated products, more reliable cannabis products. And it actually ends up being an effective enforcement program. Implicitly by allowing for illegal delivery services. Yeah, I can. I could see that. I wonder, and I know it's not the perfect analogy, but looking at how we're working with our short term rental, know the third party sites that are posting the availability of registered short term rentals. Is there some way that we can work with the third party vendors like We Maps and others so that there's like a registration number or something available for these delivery businesses where the consumer can know that they're a licensed entity in the city? Yes, the state has begun requiring that we maps. And so you will find more businesses on that site that have state licenses referenced on their pages. We also have a city website that includes a map of all of our legal dispensaries in the city, and we've been surprised to see how many hits that website gets. A lot of people use that as a resource to determine where to to purchase cannabis. We can continue to update that site. Should the city council ultimately decide to allow for legal delivery services to identify the legal services in the city as well? But it's also something that is going to take time for consumers to fully shift to the legal market. And so it is these incremental steps that we're taking are helpful, but they're not going to fully address the problem, which will will be a longer fix. Yeah, no, I agree. So I know that you guys are going to do a feasibility study and come back. So perhaps you can include in there some sort of a marketing program to encourage residents to utilize our city data resources regarding the established businesses, because I think consumer protections in terms of the product and the safety of the product is a pretty critical thing right now. And I think that consumer protection angle and how we can market that could be something that we could really invest in as a city. So if hopefully when you come back of the study, it can include that that marketing component for a site to legitimate businesses, that would be good. And then the other question that I had. What's really about the issue is, oh, no, it's not a question, it's a comment. I agree with Vice Mayor Richardson that we should encourage staff to have creativity. But I think it's creativity within the policies that we'd set. Right. So from a policy standpoint, we want staff to have tremendous creativity in coming up with ways that we can implement our policies in creative ways. But we do have, you know, nine representatives on people who may not all agree with staff at any time on certain policies. And since all of our residents deserve to be heard, we want to make sure that we're showcasing a lot of the policy considerations at council and talking through those ideas together with staff in a public setting. So with that, I want to thank staff for this excellent report. And I think the the efficiencies that can be found in joint use facilities is a fantastic opportunity to get people to enter the market. So thank you very much. Thank you. Next is Councilman Austin. Thank you very much. And I appreciate all of your comments and questions thus far. Obviously, I am a big supporter of US social equity with cannabis in our city. We've been working toward this and on this for quite some time and and we still have work to go. A lot of work to do. I just wanted to focus on the intent of the policies we're looking to create here. And I just need a little bit more clarification from staff, certainly in general in spirit, I support the direction that we're headed in. But I want to just ensure that that we are we are. And as Councilmember Cheryl mentioned, we are impacting the targeted groups that we want to target with what these policies. And so so first out, how do we ensure that or I guess, question number one is shared use manufacturing. Is that permitted in the city of Long Beach now? Charges. Manufacturing is currently prohibited in the city due to our premises requirements, which restrict one licensee from operating in a given premises. Okay, I understand the ideal of expanding, but how do we ensure that these shared use manufacturing facilities are not just expanding the businesses of existing operators as opposed to expanding opportunity for for equity targets? So the recommendation to allow for the license type would expand opportunities for anyone so both equity and non-equity business owners. That's something, however, that we would seek direction from City Council. On if you wanted to restrict licenses in any way. Well, I mean, I guess I guess I need to know what we we need to study and understand what our options are to actually ensure that we are delivering a policy. And carrying out its full intent. Right. Because I don't want the unintended consequence to be, oh, well, the big guy just came in and took advantage of our policy and now they're manufacturing and they've got storefronts and deliveries going on and they're saturating the market. Right. The ideal is to give the individuals with the least amount of advantage, some advantage. And I don't see that here. And so council, with all due respect, I think we we have work to do still. If we want to make this policy work the way we want it to work. And to the point earlier stated, I think it's I support more expanding dispensary options if that means expanding opportunities. And I think Steph actually mentioned earlier by expanding opportunities, we do have a have a greater impact in reducing being the illicit market in our city. And so, you know, the I guess the the conversation about cannabis equity has always been about are we looking to create, you know, equity jobs or equity ownership or both? And I think we need to be on both jobs and ownership. And but we need to put some some assurances in to the policy. And I'm not exactly sure how that how we do that right now. I would love for, you know, before any sort of, you know, anything comes back, the staff be able to provide some some recommendations or some best practices in which we can can can put that into any sort of policy moving forward. Thank you. The next speaker is council member. Thank you. I have several questions. We did hear this before. The Development Finance Committee, of which I at the time was vice chair. And several questions did come up at that time. And I had not been able to form all of my questions because so much that was learned at that time. I'm disappointed that the commitment to an additional meeting in December didn't take place, but I know we were all very busy and and COVID and the holidays and all of those things. But I do have several questions, so I apologize if I have to reach you after the 5 minutes. I want to echo the comments from Councilmember Sotto and Austin that we really are looking to help the communities that were most impacted by this. And so and I think that paired with the comments from Councilwoman Allen related to wanting these businesses to be successful really leads me to believe that this ordinance could be most valuable if we picked a certain number of licenses in each category and restricted it to equity candidates only. I think that the fact that there was $3.86 million available in grants and only 560,000 have been utilized to date demonstrates that there is funding available to get these equity candidates to the front of the line. And so I would hope that the maker of the motion would consider restricting the ordinance at this time to be for equity candidates. Then what we can do is we can see what barriers are still there, despite the available funding of $3.3 million, and then kind of work backwards and say, okay, now that we have X number of shared use manufacturing and we have X number of delivery, then we can say, okay. Let's talk to those businesses that are equity candidates and are being successful and figure out if they are just flooded with demand or if the demand that they have is just enough to keep them in a profitable status. Because, like Councilman Allen said, we don't want to have 70 of these businesses, equity candidates putting their lifeblood into it. But then the market being so saturated by individuals who do this all up and down the state that they're not successful and then those businesses don't have a fighting chance. So I have a series of questions that go to that. Can the grant funds be used for lease payment, construction costs and purchases of vehicles and equipment for equity candidates? Yes. The grant funds can be used for that purpose. Great. You mentioned that there were lots of hits to our legal cannabis business web page. What is lots to you in terms of number of hits per month? I don't have a statistic for how many per month, but the number of hits was in the thousands. The last time that we checked, I would need to go back to I give you an exact number. Is it thousands of individuals or thousands of hits to the site and was cumulative? It was cumulative. I rechecked months ago, so I would need to revisit it for an update. It wasn't unique individuals. It was based off of total hits to the website. Yes. So that concerns me when I look at website statistics and the number of individuals who are purchasing cannabis in our city. I've talked to cannabis business owners. We have certain business owners that I've spoken with since our meeting about enough because I asked specifically, Hey, you're a really successful cannabis business in our city and you don't do delivery. Why is that? And he kind of talked to the fact that the profitability of the delivery market is so difficult because of the additional costs related to insurance. And we're not just talking about one time set up costs that the grant can work with, but the ongoing costs and risks of a delivery business are just higher. And so I also I mean, he even said it so far as that Amazon has a a small business incubator that an individual could go to and start their own delivery business for Amazon. And he said that the numbers in his perspective would be significantly more profitable. However, I recognize that you have to be passionate about what you do, and if individuals are passionate about the cannabis industry and they want to get into it, we do want them to have a pathway to being successful. And to do that, we I feel like it sounds like phase one of this plan should really be to reserve those licenses for equity candidates and that we should see what the market bears. A Jay is weed maps a licensed business in our city. And no weed maps is not a licensed cannabis business. I don't understand the intricacies of it, but they don't touch the cannabis plant in any way, so they're more of a marketing company. Do they have any license in our city? Not that I'm aware of. Does Airbnb or any of those types of platforms have a license in our city now that we have, or will they be required to have a license in our city? Now that we've changed the short term rental market. Christopher Coons is going to answer that question. Great. So if council. Council member. It's not a license like a business license, but we do have a written agreement with Airbnb and other platforms regarding the sharing of tax information and lodging information, and that's part of our short term rentals regulation program. If your 5 minutes are up. Thank you. I will you. Thank you. Have anyone else queued up so you don't remember? Oh, wonderful things. If you think you can get it done the next few minutes, I'll just suspend the rule and just finish your question. Great. Thank you. AJ Do you believe that Weed Maps is the number one tool utilized for finding. Cannabis related businesses? I don't think I'm in a position to comment on that. I have read a number of articles that point to weed maps as one of the larger marketing firms in this industry. But I don't know if they're the largest or if people use other means now of finding cannabis businesses in the state. Perhaps we should, similar to how we reached out and had a partnership with Airbnb. Perhaps we should reach out to weed maps and discuss with them the importance of only including licensed businesses on their platform and what we could do to. Work with them to to focus the efforts into our license businesses. That might be able to support these businesses. Let me see my last few questions on. So I guess if if this is really focused towards social equity. AJ What is the limit per applicant? For utilization of the grants. Is there a limit? Is it 200,000? Currently the total amount available per equity applicants for reaching all of the milestones in the application process is approximately $250,000. And what do we believe the start up costs of a. Non storefront delivery. Business would be. You had that chart. Yeah. The the chart that we showed in the presentation was for manufacturing facility. The total cost can range, but we tried to identify something on the lower range of the spectrum for a manufacturer, and that was about $500,000. We were using that as an example for how, even with the significant resources that we've received from the States, there are still major hurdles for equity applicants that include access to capital. To see a project through delivery only services have much less capital requirements. They're able to have a much smaller footprint and therefore a lower square footage space for their business. They have fewer, fewer technical requirements. The construction that's required within the facility is much less. I don't have an exact figure for you today, but we do believe that the grants that are currently available would be enough for equity applicants to go through the process to secure a delivery only license as opposed to the current licenses that we have available. So I guess I would say that there's $3.3 million left approximately based on your assessment. I'm going to do a quick math problem here on my calculator. Divide it by 250,000. That would be 13 additional licenses. So I would request the maker of the motion to. Start the program with authorization of the staff recommendation for first items one into shared use manufacturing licenses and. Non storefront delivery licenses for, let's say, 15 equity applicants. At least then the equity applicants will have a head start in the process and not have to compete. It also provides you'd mentioned that of the 32 licenses in the city, only one of them is an approved equity applicant. And so technically, unless we restricted these licenses, there would be potentially a 31 additional non equity applicants at the front of the line to do the shared manufacturing licenses. Now I recognize that multiple businesses are often owned by one entity and so they might not have a need for putting manufacturing onsite at all of their facilities. But I would say that if we want to be true to what we say is our intention, then I would ask the maker of the motion to approve the recommendation with the modification reserving. Phase one for equity candidates up to 19 license. What did I say? What was the number? Only 13. So up to 15 licenses. So I have two things I wanna respond to. But before I do, I want to make sure we have everything, all your comments, and I'll respond when you're done as your last week. I'll just respond to it before anything else. I did have one other thing. I'm going through my work. I went through my notes and I don't see what that last comment was, so hopefully I already got it. If not, I'll kill again. Thanks. Okay, great. Okay, so just a few things. So there's been a number of members who who expressed some of the common themes. The point here when the committee recommendations come forward is to get feedback from the whole council, and that's what's taking place tonight. So Sorrel, Alan, Austin and Mongo all expressed interest in starting this with equity candidates only, and I support that in terms of the cap. I want to ask staff to respond about is a cap legally of a legal considerations on a cap. If that we need to know about. We we do have concerns for how we would administer a cap and determine who has access to a license and who does not. We went through a process like that for dispensaries in the medical ordinance, and there were some challenges associated with that and maintaining the overall integrity of that program. Having said that, though, if the City Council is interested in having staff explore a cap within the framework of delivery only, we're more than happy to include that in our feasibility analysis and look at other models that other jurisdictions have followed and identify the pros and cons to the various approaches for for shared use manufacturing. The challenge is that cannabis at this point in the state of California is a borderless market. So any attempt to restrict the number of licenses in one city doesn't have that necessarily the effect that was anticipated, because manufacturers can locate in other cities that may or may not have a cap and that product can go across borders very easily. So we're also happy to explore that as a policy option if the city council wants to pursue a cap for that license type as well. However, we would need some time to to consider it because that was not included or considered for this recommendation. So we would need to discuss internally within our policy group and also with the city attorney's office to determine if there are any legal concerns or other concerns associated with it, specifically in regards to shared use. Okay. Great. So. So that makes sense. So what I'm going to accept is I think we go forward with with equity only on both. We will explore. We are going to ask staff to explore the feasibility of the cap on on delivery since you have some evaluation to do there. So that is an amendment to this motion. And then secondly, I just want to acknowledge Councilman Soros, her amendment earlier, her friendly amendment, that we're accepting that and we're going to apply that to business, new business opportunities and employment opportunities, as echoed by a couple of the council members as well. So those are the two additions and that is the motion. And let's go to the roll call. District one. I district to. High. District three. I. District four. High. District five. High. District six. I. District seven. District eight. District nine. All right. Ocean Cares. Thank you very much. Let me go ahead and go to the last item, which is item 17.