§ 1618. ELIGIBILITY AND OPERATING STANDARDS APPLICABLE TO ALL CANNABIS BUSINESSES.

(a) Every Cannabis Business is required to obtain a business license from the City in compliance with Article 2 of the Business and Tax Regulations Code.

(b) Every Cannabis Business is required to have paid all outstanding taxes and fees, including any related penalties and interest, owed to the City, and is required to have obtained a business registration certificate from the City in compliance with Article 12 of the Business and Tax Regulations Code.

(c) Every Cannabis Business is required to obtain a State Cannabis License prior to engaging in any Commercial Cannabis Activities.

(d) Every Cannabis Business is required to prominently display on its Premises its Cannabis Business Permit, State Cannabis License, Business Registration, and Seller’s Permit, if required to hold a Seller’s Permit.

(e) Every Cannabis Business shall operate within fully enclosed and secure structures that are inaccessible to underage persons.

(f) It shall be a violation of this Article 16 for a Cannabis Business to sell or maintain alcoholic beverages and/or Tobacco Products on the Premises of the Cannabis Business.

(g) Every Cannabis Business shall enter into a First Source Hiring Agreement, as defined by Section 83.4 of the Administrative Code, pursuant to which it agrees to comply with the first source hiring requirements set forth in subsections (b)(1)-(8) of Section 83.9 of the Administrative Code.

(h) Every Cannabis Business is required to submit a “modification request” to the Office of Cannabis prior to making any change that would materially or substantially alter the Premises from the diagram of the Premises on file with the Office of Cannabis, and shall not make the proposed change absent approval from the Director.

(i) Every Cannabis Business is required to use the business name listed on its Cannabis Business Permit when applying for any other permits or licenses relating to the operation of the Cannabis Business, and when applying for a State Cannabis license.

(j) Every Cannabis Business is required to provide identification badges to all employees that display: (1) the name of the Cannabis Business; (2) the number of the Cannabis Business’ Cannabis Business Permit; and (3) a photo of the employee’s face. Such identification badges must be worn by employees at all times when they are on the Premises of the Cannabis Business, and when acting in the scope of their employment.

(k) Every Cannabis Business, other than a Cannabis Testing Facility, is required to maintain on the Premises a fire proof safe.

(l) A Cannabis Business shall not enter into a sublease for use of any part of the Premises by another entity without the prior approval of the Director.

(m) A Physician’s Recommendation for Medicinal Cannabis may not be sought, issued, provided, or procured on the Premises of a Cannabis Business.

(n) At any time a Cannabis Business is open for operation, there shall be at least one person on the Premises who is responsible for the operation of the Cannabis Business and who is readily available to respond to and interact with all inspecting departments and agencies, the Director, or any other City employee or official.

(o) No Cannabis Business may employ an individual who is not at least 21 years of age, unless authorized by state law.

(p) Every Cannabis Business is required to comply with all aspects of the state’s “Track and Trace” program, as set forth in Section 26067 of the California Business and Professions Code, as may be amended from time to time.

(q) Every Cannabis Business is required to maintain records demonstrating that all Cannabis and Cannabis Products have been obtained from Cannabis Businesses holding a valid State Cannabis License. The Director shall have the right to examine, monitor and audit such records and documentation, which shall be made available immediately upon request of the Office of Cannabis.

(r) None of the following items shall be allowed on the Premises or parking lot of a permitted Cannabis Business:

(1) Controlled substances other than Cannabis, except when in the possession or under the control of an individual for whom the controlled substance was prescribed by a licensed physician; and

(2) Alcoholic beverages.

(s) Every Cannabis Business shall comply with the terms of its Good Neighbor Policy and Security Plan.

(t) Every Cannabis Business is required to keep all garbage, recycling, and compost containers on the Premises and hidden from public view, and placed outside only when being serviced by the disposal company. Trash shall be contained and disposed of pursuant to garbage and recycling receptacle guidelines set forth by the Department of Public Works.

(u) The Premises of every Cannabis Business shall be adequately soundproofed or insulated for noise, as may be required by the Planning and/or Building Codes, or by permits issued pursuant to those Codes. Noise generated by fixed-source equipment shall not exceed the decibel levels specified in Article 29 of the Police Code, as may be amended from time to time. Violations of this subsection (u), including noise that exceeds the decibel levels specified in Article 29 of the Police Code, are subject to the penalties set forth in this Article 16.

(v) Appropriate odor control equipment shall be installed in conformance with the approved odor plan and maintained to prevent any significant noxious or offensive odors from escaping the Premises.

(w) Every Cannabis Business shall maintain the main entrance to the Premises and all sidewalks abutting the subject property in a clean and sanitary condition in compliance with the Department of Public Works’ Street and Sidewalk Maintenance Standards.

(x) Every Cannabis Business shall comply with signage controls as established in accordance with the Planning Code.

(y) Every Cannabis Business shall register with the Office each location within the City where Cannabis and Cannabis Products will be stored.

(z) Every Cannabis Business shall protect personally identifiable information and protected health information from unauthorized disclosure, to the extent required by the Health Insurance Portability and Accountability Act, the California Medical Information Act, Article 1 of the California Constitution, the California Health and Safety Code and regulations promulgated thereunder, and any other applicable provision of federal or state law.

(aa) It shall be a violation of this Article 16 for any Cannabis Business to engage in the nonsale distribution of Cannabis or Cannabis Products, or to permit the nonsale distribution of Cannabis or Cannabis Products by any Person on the Premises of the Cannabis Business, except as authorized by state law. Notwithstanding the forgoing,1 and as authorized by state law, a Storefront Cannabis Retailer may operate a Compassion Program in which it provides Medicinal Cannabis and/or Medicinal Cannabis Products at no or nominal cost to low-income individuals who are qualified under California Health and Safety Code Sections 11362.7 et seq. to use Medicinal Cannabis. In addition, Cannabis Cultivation Facilities and Cannabis Manufacturing Facilities may provide Medicinal Cannabis and/or Medicinal Cannabis Products at no or nominal cost to Storefront Cannabis Retailers, for distribution through a Compassion Program. The Director shall adopt rules, regulations and guidelines applicable to Compassion Programs, including, but not limited to: eligibility criteria applicable to persons who may receive Cannabis at no or low cost; and recordkeeping requirements. For purposes of this subsection (aa), “nonsale distribution” means to give Cannabis or Cannabis Products to the general public or some segment thereof at no cost, or at nominal cost, or to give coupons, coupon offers, or rebate offers for Cannabis or Cannabis Products to the general public or some segment thereof at no cost or at nominal cost.

(bb) A Cannabis Business shall conduct an Energy Efficiency Audit Reporting, as may be required by Chapter 20 of the Environment Code.

(cc) Every Cannabis Business shall ensure that the electrical power used for Commercial Cannabis Activities shall be procured from or produced by renewable sources, consistent with Renewable Energy Requirements to be adopted by the Director, in consultation with the Director of the Department of the Environment. In adopting Renewable Energy Requirements, the Director shall establish minimum renewable energy requirements that are consistent with the amount of renewable energy contained in CleanPowerSF’s Green Service. A Cannabis Businesses1 shall also provide to the Director and the Department of the Environment an annual report documenting the amount and source of energy consumed by the Business in the prior 12 months.

(dd) Every Cannabis Business shall advise the Director and the applicable State Licensing Authority in writing of the following events within 48 hours of:

(1) Receiving a criminal penalty or civil judgment rendered against the Permittee; or

(2) Receiving notification of the revocation of a local license, permit or other authorization from any Referring Department.

(ee) Every Cannabis Business shall notify the Director, the Police Department, and the applicable State Licensing Authority within 24 hours after discovering any of the following:

(1) Significant discrepancies identified during inventory;

(2) Diversion, theft, loss, or any criminal activity pertaining to the operation of the Cannabis Business;

(3) The loss or unauthorized alteration of records related to Cannabis or Cannabis Products, registered qualifying patients, primary caregivers, or the employees or agents of the Cannabis Business; and

(4) Any other breach of security.

(ff) Every Cannabis Business shall ensure that at least 50% of all Business Work Hours are performed by Local Residents, unless one of the following exceptions applies:

(1) Cannabis Businesses that previously held a Medical Cannabis Dispensary permit under Article 33 of the Health Code shall ensure that at least 35% of all Business Work Hours are performed by Local Residents. This exception shall expire by operation of law on January 1, 2019.

(2) If a Cannabis Business is subject to, and complies with, the hiring requirement imposed by subsection (gg), that Cannabis Business shall be exempt from the requirements of this subsection (ff).

Business Work Hours performed by residents of states other than California shall not be considered in calculation of the number of Business Work Hours to which the requirements of this subsection (ff) apply. The Director of the Office of Cannabis may approve a time-limited waiver or reduction of the requirements of this subsection, upon a showing by the Cannabis Business that it was unable to locate a sufficient number of qualified Local Residents.

(gg) To encourage the existence of a stable, well-trained workforce in the cannabis industry, each Cannabis Business shall comply with the following hiring requirement:

(1) Each Cannabis Business shall ensure that 35% of its new hires shall be registered apprentices enrolled in a relevant apprenticeship program approved by the State that has a memorandum of understanding with one or more pre-apprenticeship programs certified by the City, if:

(A) There exists a State-approved apprenticeship program that is relevant to the type (as set forth in Section 1607) of Cannabis Business in question;

(B) The State-approved apprenticeship program described in subsection (gg)(1)(A) has a memorandum of understanding with one or more City-certified pre-apprenticeship programs; and

(C) Sufficient numbers of registered apprentices enrolled in a State-approved apprenticeship program described in subsections (gg)(1)(A)-(B) are available to satisfy 35% of the Cannabis Business’s new hiring needs.

(2) If registered apprentices enrolled in a State-approved apprenticeship program described in subsections (gg)(1)(A)-(B) are not available in sufficient numbers to satisfy 35% of the Cannabis Business’s new hiring needs, the Cannabis Business shall hire such registered apprentices to the extent feasible.

(3) If no State-approved apprenticeship program is relevant to a particular type (as set forth in Section 1607) of Cannabis Business, or if no relevant State-approved apprenticeship program has a memorandum of understanding with any City-certified pre-apprenticeship program, that type of Cannabis Business shall not be subject to any hiring requirement under this subsection (gg).

(4) To facilitate compliance with this subsection (gg), the Office of Economic and Workforce Development (OEWD) shall maintain and publicize a list of State-approved apprenticeship programs that have a memorandum of understanding with one or more City-certified pre-apprenticeship programs. This list shall specify types (as set forth in Section 1607) of Cannabis Businesses to which each such State-approved apprenticeship program is relevant, as determined by OEWD.

(5) For purposes of this subsection (gg), OEWD shall establish standards governing certification of pre-apprenticeship programs, and shall be responsible for certifying, on behalf of the City, pre-apprenticeship programs that meet those standards. The standards established by OEWD shall ensure that any pre-apprenticeship program certified by the City under this subsection operates in partnership with one or more community-based organizations.

(hh) Every Cannabis Business must comply with all applicable laws, regulations, rules, and permit conditions, during the entire permit period, whether or not the Cannabis Business currently engages in Commercial Cannabis Activity.

(Added by Ord. , File No. 171042, App. 12/6/2017, Eff. 1/5/2018; amended by Ord. , File No. 180912, App. 12/21/2018, Eff. 1/21/2019; Ord. , File No. 180805, App. 1/25/2019, Eff. 2/25/2019)

CODIFICATION NOTE

1. So in Ord. .