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File #: 23-39    Version: 1 Name:
Type: Minute Order Status: Action Item
File created: 7/19/2022 In control: City Council Meeting Agenda
On agenda: 8/8/2022 Final action:
Title: CC - ACTION ITEM: Consideration of the Selection of TGS CC Ventures, LLC (dba Beyond Hello) at 3800 Sepulveda Boulevard for a Culver City Storefront Retail Commercial Cannabis Business Permit Pursuant to Culver City Municipal Code Chapter 11.17.
Attachments: 1. 2022-08-08 ATT City Council Resolution No 2018-R014.pdf, 2. 2022-08-08 Planning Commission Resolution No 2022-P013.pdf, 3. 2022-08-08 ATT Beyond Hello Proposal.pdf, 4. 2022-08-08 ATT Beyond Hello Predevelopment Plans.pdf, 5. 2022-08-08 ATT Planning Commission Staff Report - July 13 2022.pdf, 6. 2022-08-08 ATT Draft Planning Commission Minutes - July 13 2022.pdf

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CC - ACTION ITEM: Consideration of the Selection of TGS CC Ventures, LLC (dba Beyond Hello) at 3800 Sepulveda Boulevard for a Culver City Storefront Retail Commercial Cannabis Business Permit Pursuant to Culver City Municipal Code Chapter 11.17.

 

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Meeting Date:  August 8, 2022

 

Contact Person/Dept:                     Jesse Mays, Assistant City Manager

Phone Number:                                            (310) 253-6000

 

Fiscal Impact:  Yes []    No [X]                                                                General Fund:  Yes []     No [X]

 

Attachments: Yes [X]    No []  

 

Commission Action Required:     Yes [X]     No []    Date: Planning Commission (07/13/2022)

 

Public Notification:   (E-Mail) Meetings and Agendas - City Council (08/03/2022); Cannabis (07/25/2022)

 

Department Approval: John Nachbar, City Manager (08/03/2022) 

_____________________________________________________________________

 

 

RECOMMENDATION

 

Staff recommends the City Council consider the selection of TGS CC Ventures, LLC (dba Beyond Hello) at 3800 Sepulveda Boulevard to receive a Storefront Retail Commercial Cannabis Business Permit at 3800 Sepulveda Boulevard pursuant to Culver City Municipal Code (CCMC) Chapter 11.17.

 

 

BACKGROUND

 

In December 2017, the City Council adopted the original Commercial Cannabis Business Ordinance, which was refined on March 26, 2018, when the City Council adopted Ordinance No. 2018-007, reflecting the City’s current Commercial Cannabis Businesses regulations, codified in CCMC Chapter 11.17, governing cannabis related sales, manufacturing, processing, distribution, delivery, testing, and cultivation, as well as application and permitting requirements and enforcement of the regulations. A cannabis “Retailer-Storefront” is a specific type of retail land use that requires both a Conditional Use Permit (CUP) from the Planning Commission and a Commercial Cannabis Business Permit as determined by the City Council.

The applicant to be considered at the August 8, 2022 regular City Council meeting for the proposed Commercial Cannabis Business Permit is TGS CC Ventures, LLC dba Beyond Hello (“Beyond Hello”) a proposed Cannabis Retailer-Storefront business. Chapter 11.17 and CCMC Title 17 (Zoning Code), define a Cannabis Retailer-Storefront as follows:

A commercial cannabis business 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 to customers at an on-site fixed location, including an establishment that also offers delivery of cannabis and cannabis products as part of a retail sale, in addition to on-site sales, and where the permittee holds a valid Commercial Cannabis Business Permit authorizing the operation of a retailer, and a valid state license as required by state law to operate a retailer.

Chapter 11.17 requires a Storefront Retailer business to obtain a Commercial Cannabis Business Permit to engage in any commercial cannabis business or activity in the City. Applicants are required to participate in a multi-stage screening process and no applicant is guaranteed any particular result in the application process. The procedures governing the application process for a Storefront Retailer Commercial Cannabis Business Permit, which is a competitive, merit-based system of selecting the top applicant(s), are set forth in City Council Resolution No. 2018-R014, adopted by the City Council on February 2, 2018 (Attachment No. 1). Resolution No. 2018-R014 also provides that the maximum number of Storefront Retail Commercial Cannabis businesses operating in the City at any one time shall not exceed three. There is currently one permitted storefront retail commercial cannabis business operating in the City: Sweet Flower at 10000 Culver Boulevard.

Cannabis Storefront Retail Permit Application Process

The Culver City cannabis retail storefront permit application process opened in July 2018, and the application acceptance period closed on September 27, 2018. During that time, the City received 23 applications for the possible three commercial cannabis storefront retail permits. After the initial steps of the application and selection process, described in detail below, up to three applicants would then be eligible to apply to the Planning Commission for a CUP. If an applicant successfully obtained a CUP, the City Council would consider awarding the applicant one of up to three commercial cannabis storefront retail permits.

During Step 1 of the application process, the City used a rigorous multi-departmental review process to verify that the proposals from the applicants met basic criteria established in the CCMC, including that the proposed location met zoning and parking requirements, all owners and responsible persons had cleared background checks, and proposed locations had obtained the property owner’s consent. Three of the applicants were rejected at this stage because they did not meet the minimum criteria.

During Step 1a, the 20 remaining applications were reviewed by a three-person panel of City staff (in the Planning Division, Economic Development Division, and the Police Department), who used a forced ranking system to determine the top-ranking applicants to proceed to Step 1b.  Only the eight highest scoring applicants out of the 20 remaining were selected to move forward to Step 1b, including Beyond Hello.  (Note: The application process allowed only the top six applicants to move forward, but there was a three-way tie for sixth place, so eight were selected to move forward.)  The scoring methodology used by the three-person panel is included in Attachment 1, pages 7-8.

During Step 1b, the applications from each of the top eight scoring applicants were rated by a five-person review committee, consisting of City Executive staff members in the Police, Fire, Community Development, Finance, and Administrative Services Departments. The 5-person review committee conducted an in-person interview with representatives from each of the top eight applicants.  The review committee then scored each applicant using a scoring system established by City Council Resolution (Attachment 1, page 9-12). Only the top three applicants were invited to move forward and apply for a CUP. Beyond Hello was among the top three applicants and received notification of selection to move forward in the CUP application process on May 13, 2019; however, there were two administrative appeals after Step 1b. The City waited until the end of the appeal period after Step 1b before allowing applicants to begin the CUP process. The City notified Beyond Hello that it could proceed with the CUP application process on September 9, 2019.

Public Meetings

Chapter 11.17.115.A.2 provides for a community meeting, as follows:

“One stage of the process shall include a public meeting where the public may comment on the proposed storefront retail commercial cannabis business applicants. At least ten (10) days prior to the public meeting, the proposed premises will be posted, and notice of the public meeting will be delivered to all property owners and occupants located within two thousand five hundred (2,500) feet of the proposed premises of each of the applicants that will be present at the meeting.”

Pursuant to the City’s Community Outreach Guidelines involving entitlement requests such as CUPs and Chapter 11.17, the applicant held two community meetings as part of its outreach to neighbors and community members. Consistent with Chapter 11.17, a notice was mailed to all property owners and applicants within 2,500-feet from the Project Site boundaries. The applicant held the two meetings and addressed neighborhood concerns. Additional details can be found in the Planning Commission Staff Report (Attachment 5).

 

Conditional Use Permit Planning Commission Public Hearing

A public notice of the July 13, 2022 Planning Commission hearing on the CUP was mailed to all property owners and occupants within a 2,500-foot radius of the Project Site on June 21, 2022.

 

On July 13, 2022, the Planning Commission voted 4 to 0 to adopt a resolution approving Conditional Use Permit, P2021-0276-CUP, subject to the Conditions of Approval and applicable Code Requirements as stated in Resolution No. 2022-P013 (Attachment 2).

CUP Renewal, City Council Business Permit Approval, and Business Tax Certificate Requirement

 

The Zoning Code states that a Cannabis Retailer-Storefront shall obtain a CUP that must be renewed every five years. Chapter 11.17 further requires that after approval of the CUP, the business must obtain a Commercial Cannabis Business Permit at a public City Council meeting which must be renewed annually. After approval by the City Council, the business is required to secure a Business Tax Certificate with the City’s Finance Department, which must also be renewed annually. These City approvals cannot be transferred to other business entities, individuals, or companies, nor can the Cannabis Retailer-Storefront change the business location, unless such actions are approved by the City Council.

 

CEQA

 

Pursuant to the California Environmental Quality Act (CEQA) guidelines, an initial Study prepared for the project determined that the project will not have a significant adverse impact on the environment and that a Mitigated Negative Declaration (MND) finding is appropriate.  A copy of the proposed MND as well as other documents concerning the project were made available for public review and online from June 22, 2022, through July 13, 2022, at the Planning Counter in City Hall.  The Planning Commission adopted a resolution adopting a Mitigated Negative Declaration for the project.  The Storefront Retail Commercial Cannabis Business Permit is within the scope of the adopted MND and the circumstances under which the MND was prepared have not significantly changed, and no new significant information has been found that would impact the MND.  Therefore, no additional environmental analysis is required.  More information can be found in the Planning Commission Resolution (Attachment 2).

 

 

DISCUSSION

 

City Council Meeting to Consider Whether to Award Cannabis Business Permit

 

CCMC 11.17.115.A.5 provides that “City Council shall select the applicants to be awarded a storefront retail Commercial Cannabis Business Permit at a public City Council meeting. The City Council’s decision as to those applicants that are issued a Commercial Cannabis Business Permit shall be final.”

Resolution No. 2018-R014 further describes the City Council meeting in Step 1(d):

“At a public City Council meeting, the applicant will present its proposal. City Council will either approve or deny a storefront-retail cannabis business permit based on all information compiled throughout the application process.” Then, “the City Council will vote to approve a permit, contingent on the successful completion of the remainder of the approval process.”

Beyond Hello plans to present its proposal (Attachment 3) as part of this Agenda Item. More details about Beyond Hello’s proposal can be found in Beyond Hello’s preliminary project plans (Attachment 4), the Planning Commission staff report (Attachment 5), and the Draft Planning Commission meeting minutes (Attachment 6).

City staff recommends the City Council select Beyond Hello as one of up to three Storefront Retail Commercial Cannabis Business permittees, subject to completion of the remainder of the permit approval process, including obtaining a license to operate from the State of California.

 

 

FISCAL ANALYSIS

 

There is no fiscal impact associated with this action. Cannabis Business Permit applicants and permit holders pay annual fees to cover the City’s cost of application selection and regulation, as well as a cannabis business tax in accordance with CCMC Chapter 11.32.

 

 

ATTACHMENTS

 

1. City Council Resolution No 2018-R014

2. Planning Commission Resolution No 2022-P013

3. Beyond Hello Proposal

4. Beyond Hello Predevelopment Plans

5. Planning Commission Staff Report - July 13, 2022

6. Draft Planning Commission Minutes - July 13, 2022

 

 

MOTION

 

That the City Council:

 

1.                     Select TGS CC Ventures, LLC (dba Beyond Hello) to be awarded a storefront retail commercial cannabis business permit at 3800 Sepulveda Boulevard;

 

2.                     Direct the City’s Permit Administrator to issue the permit, subject to the successful completion of the remainder of the permit approval process established by the CCMC and City Council Resolution No. 2018-R014; and

 

3.                     Direction to the City Manager as deemed appropriate.