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6.D. - Page 2 of 19 <br />Engage educational and health agencies, the business community, and residents <br />Enable cannabis business to become part of business community, including applying business <br />license tax and seeking voter approval for a cannabis tax to support City services <br />Determine whether any local regulations are needed on top of adopted State regulations <br />There were four phases to developing a process to allow cannabis businesses to operate in the City: <br />Phase 1 (Completed): In November 2017, the City Council adopted a Zoning Code amendment regulating <br />personal cultivation and banning commercial cannabis -related activities including commercial cultivation, <br />manufacturing, testing, retail, and distribution, except for deliveries of medicinal and adult use cannabis <br />by cannabis retailers located outside Redwood City. This step maintained local land use control and <br />allowed City staff more time to analyze potential allowed uses. <br />Phase 2 (Completed): Delivery operators who may be delivering cannabis into the City were notified of <br />the need to obtain a business license and pay the business license tax. To date, four cannabis business <br />have obtained a business license and paid the business license tax. <br />Phase 3 (Completed): Developed and implemented Cannabis business operating regulations to allow <br />cannabis delivery from "non -storefront" retail delivery facilities located in the City and to allow indoor <br />cannabis nurseries and establish cannabis regulatory fees. The cannabis regulatory fees offset staff costs <br />involved with licensing, regulating, and enforcing cannabis activity and regulations associated with <br />warehouse delivery centers, nurseries and deliveries. <br />Phase 4: (Under development) Consider regulations to allow walk-in, store -front cannabis retail sales in <br />the City. Staff anticipate scheduling a study session on regulations for store -front cannabis retail sales <br />within the next few months. <br />ANALYSIS <br />The third phase of the City's cannabis program allowed cannabis delivery businesses to operate in the <br />City. Regulatory fees, taxes, cannabis business permits and the cannabis business administrative rules, <br />regulations and a permitting process were developed and implemented. Per the City's cannabis business <br />regulations, a process for an annual renewal of cannabis business permits is required. To develop and <br />execute this program staff is recommending entering into an agreement with HdL Cannabis Consulting <br />Services. <br />Under the proposed agreement, HdL Companies will develop a permit renewal process for the six cannabis <br />delivery businesses that currently have permits. The permit renewal process will be based on the City's <br />regulations and ensure the businesses meet all the conditions of the permit. HdL Companies will also <br />verify compliance and administer inspections, financial audits of the businesses when appropriate, <br />background checks and provide technical assistance as needed. The permit renewal fee of $29,530 paid <br />by each permit holder covers the cost of the consultant's services and any time staff needs to spend on <br />the renewal process. The fee also includes a contribution of $10,000, which is designated for cannabis <br />drug education prevention for children and youth. The cost of the audits and the background checks will <br />be borne by the permit holders. HdL Companies provides the most comprehensive array of cannabis <br />Page 2 of 4 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />332 <br />