CANNABIS VILLAGE - How to deal with local government (if you must)...

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CANNABIS VILLAGE - How to deal with local government (if you must)...
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Primer On Dealing with Local Gov for Legal Cannabis
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Mr. Wanke is a businessman, Mayor, and County Commissioner. He was born in Anaheim and has lived his entire life in Orange County, CA. He currently lives in Placentia, with his wife and their four young children. Chad graduated from Cal State Fullerton with a BA in Geography and a Minor in Anthropology. As the Principal of Orbis Capital Consultants Chad directs all company activities, personally providing government affairs services to a diverse range of clients including large multi-national corporations, religious organizations, private companies, public agencies, family offices and individual property owners. Chad will present a primer on the critical role local government plays in the Cannabis industry. This will touch upon the areas of local Cannabis permits, business licenses, building permits, law enforcement, code enforcement, health/safety/fire, etc, which are all handled at the municipal or County level and are the pain-points most likely to get someone shut down, arrested, or their permit application stopped in its tracks & their business never opened in the first place.
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all right our next speakers up we have a mr. Chad Wayne key so we have a mr. Chad Winkie he is the he is the mayor of Placentia California which is the town of is it Orange County yeah so I I was lucky enough to get in contact with this guy and he told me some very interesting stories about having been a young punk rocker being dragged out of a car by his Mohawk and then being beaten up by the police and one day he just he wanted to change the system and he figured he'd have a much better time doing that from the outside and being the guy who tells the police what to do and that's a pretty punk-rock attitude in my opinion I don't care what you say so I'm pretty excited to have him tell us how to deal with local government if you must as it pertains to your legal can of business thanks Rex yeah that was when I had hair as you can see I have a hard time growing a mohawk now I tried to do it you know at the mohawk place and they laughed at me my name is Chad Wonka I'm the mayor of
the city of Placentia and I'm a government affairs and land-use specialist and what that means is that any business that needs a what we would call an entitlement or a permit it could be a conditional use permit or a zone change or business license I specialize in helping businesses kind of bridge the gap between bureaucracy and private sector so my goal here today is to focus
on cannabis yeah and explain kind of start high-level and look at what levels of government what the roles and responsibilities are of different levels of government explain how if you're gonna open a marijuana business a cannabis business um I'm gonna say marijuana cannabis I'm talking about weed so cannabis is nice but you know at the end of the day marijuana is really what we're talking about so if I switch back and forth it's just because I keep trying to go and use the current currently popular term cannabis but in the back of my mind it's still pot so my goal here is really to leave you with a better understanding of why local government which would be city or county go is really critical if you're going to enter into the cannabis space most people when they think of government they think of the feds they so the
federal government has a particular role state governments got a particular role but at the end of the day most businesses are gonna deal with local police code enforcement fire departments and things like that I also want to kind of outline the roles and responsibilities of the different people in the city so that would be elected officials appointed officials like commissioners staff members and some different types of government so if you decide you do want to get into this space you have a least your kind of forearmed on what you're dealing with a lot of people talk to attorneys about opening cannabis businesses or consultants some of those people know what they're talking about a lot of them don't I've seen a lot of people who are cannabis specialists and they've never worked on a conditional use permit in their whole life don't understand the process or attorneys that were ambulance chasers four years ago and now they're marijuana specialists so there are a lot of people out there that don't know what they're doing and this will kind of forearm you on you know what you should look for if you're gonna hire a lobbyist or government affairs specialist and what to expect from them and also what not to expect from them so the point I
said is really to help you understand the system so you can benefit don't waste time times money especially if you're securing real estate in these projects they take a long time from beginning to end so you don't want to burn through all of your revenue for your project just waiting for your permits to get approved or for your conditional use permit to get approved cities that are pro marijuana like West Hollywood for example that cities got a population that's supportive of marijuana a City Council that's supportive of marijuana and they thought they were gonna have everything up and running last year and they still don't so even when you've got a supportive environment most cities don't really know what they're doing it's new and their people are freaked out about weed I mean reefer madness is alive and well believe it or not like people really believe that and I've had people say this to me why do you want to ruin our city what's gonna happen to my two-year-old if there's a dispensary in the city you know and what you hate children and families you want to bring drugs to our city I didn't I'm kind of jaded I thought people came up with ideas like this because they had some other motivation and it took me a while to realize that there are people out there who really believe that marijuana is going to destroy their property values Western civilization their families their kids are going to be pimping themselves on the street corner because they can smoke reefer and these it sounds crazy you're laughing and I laughed until I realized that people are really scared of this so you'll see cities my experiences is in California but you'll see a cities that are anti we pro weed a variety here and there but at the end of the day for most of the bureaucrats and the people that are approving these uses which would be dispensaries cultivation extraction testing the cities have now haven't done this or they think they haven't done it and so bureaucrats don't they're uncomfortable with it it's new to them and they're afraid of making mistakes so you'll see really long time frames for people so I want to help you kind of cut your time frames down by doing things right in the very beginning
this is why it's important to understand
local government this is a raid that took place in Santa Ana it's not a joke
when you see the outfits you'll think
that I he and I actually made this at home that really is a guy with his you
know traffic helmet on in this case the
police raided a what I would call an
illegal dispensary it was non permitted they knocked down the door they kicked
everybody out and then they ripped down
the security system but there were two security systems so once the first set
the overt cameras were all ripped down
there was still audio and video and in
the video and the audio you can see what
appears to be police officers eating edibles and talking about punching
crippled people in their stubs and
things like that so pretty disgusting
things it's not the norm but just to
give you an idea of when you don't do things right this is what can happen so the problem
is is really that when it comes to government like I said people think about the federal government and they have really no clue what cities do I happen to know a guy who has a pizzeria in a coastal city in Southern California and he got cited for having too many chairs in his pizzeria literally he's got a permit the permit says you can have X number of chairs his staff pulled out more chairs he got written up they kept doing it he now has a misdemeanor conviction for having too many chairs in his pizzeria he's a criminal so it's not just marijuana but paying attention to conditions of your permit paying attention to what the guys with the guns tell you to do paying attention to what code enforcement tells you to do is really really critical you can see the city's can make or break you I mean they can literally find you out of existence they can shut your doors they can put your if you're found to be a public nuisance your property can go into receivership so the best thing to do is to create relationships build bridges with the local government and basically be friends with the people who have control over your assets your business and you know your freedom so I wouldn't say your life but I mean guys with guns and badges you know they've got a gun you probably shouldn't have one if you're running a cannabis business in your business so just something to think
of quick primer here the federal government clearly handles national policy aside from what you've heard earlier and the DEA and the federal classifications for drugs on a day to day basis at least in California the DEA is not raiding cannabis dispensaries anymore and the reason there were a lot of raids in the past was because cities didn't have the manpower or the revenue the dollars to go after all the dispensaries so what they do is they call the local DEA office and the DEA would come in they deputize local officers and it would be a DEA raid part of that was for asset forfeiture but a lot of it was just funding that's not really happening anymore you've got state the state level and that's where you're typically going to have your licensing so most states will require a state-level license for a cannabis operation and there are a variety of different flavors of those types of licenses in different states in California you can get cultivation licenses outdoor indoor mixed light licenses you can get extraction licenses which are volatile or non-volatile extraction you can get retail licenses delivery licenses those are at the state level you still have to get a local permit in order to operate and there's still a lot of confusion for people I talk to people all the time who say oh I've got 40 acres of weed growing and it's in this city and I say well that City doesn't allow cannabis cultivation they go no no we got this thing and you know it's under this and somebody's given them the idea that it's okay to do it even without a city license and it is explicitly not acceptable the only time you wouldn't need a city license it is if you're an unincorporated County property in which case there is no City it's it's the county so in that case the county operates like the city you still need a county that's approved it so when you're
going into a city it's important to understand that there's really two forms in the United States of city government there's what's called the strong mayor which is where the mayor's elected but the mayor is also the CEO so they have a lot of power and this is typically in larger cities so it's a full-time job the mayor's the CEO is also chairman of the board of directors but the City Council is the legislative body and the board of directors so what you've got is a politician running the city the mayor can hire or fire staff members independent of Council and the city charter or the state will dictate which powers the City Council retains compared to the mayor so it's different in different cities there are what's called general law cities in California and charter cities charter cities have their own Constitution basically so but at the end of the day what's important to know is that the mayor is not only the mayor not only an elected official but also running day-to-day operations the more common form of government is called the council-manager form of government and this to compare it to a corporation the City Council would be the board of directors the May would be the chairman of the board but the CEO would be a city manager that would be hired specifically for that job so you've got a non elected official or non politician running the day-to-day operations the city manager is typically hired by the City Council as a whole so I'm a mayor I still get one vote people think it's cool my friends get to say you know go back to work and go what'd you do this weekend like oh I hung out with the mayor and there was like oh that's bitchin I still have I have five times as much work and I still get one vote so day-to-day operations are run by the city manager the mayor is a not necessarily ceremonial post but you're you're running the the City Council meetings you're sitting there with a gavel if people get out of line you know you're calling on people to vote and things like that but you're not running day-to-day operations the what will happen is the City Council when they hire the the city manager the city manager would essentially be the policy adviser and that's the person that the city would go to to understand what you can and can't do so the staff top level staff city attorneys city manager those would be specialists in their field and they're the people that would provide advice to the City Council and that's really important to understand because frequently I hear people say hey I want to go open up a dispensary in this city and I say well you know it's not legal in that city to say oh well we know the mayor and I think well that's great you got one vote out of five it gets you zero you know but they they have this idea that the mayor can just go hey hook my buddy up and you know give this guy license it doesn't work that way and and knowing the mayor is great it's nice it could be bad because if the mayor if the other four councilmembers all hate the mayor you're not gonna get anything it's probably gonna be worse for you but the day-to-day decisions that are made by just department heads like City Attorney's development directors Public Works directors because those are the experts in the field they're going to give advice to the City Council and when they make a recommendation on a project for example if you wanted to put a church in an industrial area most cities require a conditional use permit that permit staff will typically make a recommendation which is either approve or deny if the staff says we think that where this you guys hired us to tell you what we think is the right thing to do and we think this is not a good idea a City Council really has to stick their neck out to overrule that and they have to have really good reasons why and it does occasionally happen but it's important to for you to understand that the staff members have a lot of influence and that's really it's nothing nefarious it's not anything Shady it's just because they are specialists and they are you know called upon by the City Council and the Planning Commission to give their opinion and advice so if you're gonna open up a can of this business some of the problems you might run into would be when it comes to the who in the city you obviously want to look at a city that is either either allows cannabis uses or is going to allow cannabis uses and that typically means there are at least three of five council members there's a majority of the council members that are supporting this if you've got a seven member council or greater they typically need a majority for this if there's a city manager who doesn't like it they can really gum up the works by the way they write staff reports the police chief can
saying hey we think this is a really bad idea and if you're in a public meeting as a council member and the police chief gets up and says god I think this is a terrible idea it's really hard to go well geez chief I really don't agree with you I'm gonna vote on it anyways and not have somebody come back and call you out and say your own police chief said this was a bad idea but you guys are gonna do it anyways that's not responsible so it's a big political risk for for elected officials so to successfully operate you really need to know who develops implements and enforces the law so the development typically would come from staff you'll have city attorneys and a team of people coming up with legislation or processes to approve cannabis uses they're gonna then bring that to the City Council with a recommendations to approve that once it's approved implementing the law goes back to the staff level and enforcement would be code enforcement in the police so you really need to make sure that you're dealing with these people in a polite nice way people if you ever want to just get a good laugh stand by a planning counter at a city and watch a guy come in with a bunch of plans and then be a total jerk and wonder why his plans all of a sudden go to the bottom of the pile it happens all the time bureaucrats are
don't they don't get treated particularly well their jobs can be kind of boring and it's a difficult job when you have elected officials who can kind of like ruin your life so the bureaucrats are faced with kind of some interesting situations they can doubt people come in and treat them like garbage and then can't really do a whole lot about it so be nice you don't have to kiss people's butts but be nice be appreciative you know ask questions but the end of the day be polite this is important because you can see here civil asset forfeitures criminal penalties for code violations like the chairs I mentioned earlier and forced receiverships happen in Alabama the police city governments and the DEA and the sheriff seized over two million in 15 there's a little bit old but the numbers don't come out every single year so what you want to do is just make sure that you are really paying attention and on your team when you're if you're gonna get into this you need a solid team you need somebody that understands land use you need an attorney you need people that understand operations make sure that you understand that specific city's requirements there's one city in Southern California and they're huge licensing packet they would you would submit a package to them they would go through all of their requirements and check off the boxes and score or whether or not you meet all the requirements one of the requirements on like page 20 that didn't have anything to do with all the other signs said you must have a sign in Korean Spanish Vietnamese Khmer and English that says nobody under 21 on the premises that wasn't under the signs section it wasn't under all the any of the other sections it was like a spoiler thrown in there and if you missed that then you lost a bunch of points so when they're scoring applications it's important to make sure that if you don't know how to do this yourself you've got somebody that does understand how to do it because cities want to make sure that they are dealing with people that can't that will operate a business in accordance with the law that aren't going to embarrass them and in many cases they're going to make money because cities will have taxes and the lot of cities do this because they want the revenue it's amazing to see the people that will come to City Council meetings when the city's talking about marijuana and approving marijuana and get up on the podium at the podium in public on TV and talk about all their illegal activity I literally saw a guy get up and talk about how he's been extracting and making edibles for ten years and giving him to his grandma and his mom's been selling him and all these things and it's that's illegal the guy just admitted to illegal activity the bad part for me is he went and sat down right next to me so the next day the city manager he goes why did you bring that idiot I don't know the guy he just happened to sit next to me and I'm a friendly guy so I was talking to him but you'll get people that look like extras from Scarface that'll come to your city and get up and talk and you look nobody wants the guys from Scarface running you know a marijuana dispensary or any of anything else having to do with marijuana in their city so to go back to
the roles of the elected officials it's kind of quick here we've already talked about them but the elected officials are City Council members specifically City Council members and mayor's when I talk about appointed officials those would be people that are appointed by the City Council typically commissioner or committee members some cities will have a cannabis Commission and that's a commission that's specifically put together to look at the cannabis issue but Planning Commission on the third line is extremely important all of these Commission's are advisory bodies to the City Council so they will have an area that like a traffic safety commission or Parks and Rec just like the show you could have a Cultural Arts Commission you can have airport land use Commission Harbor Commission it's different in different cities but these are all appointed officials they're not elected they're appointed by the City Council but they can still have a large amount of power and a huge impact on your project the Planning Commission will hold hearings on rezoning special use permits land use ordinance conditional use permits so if a city's got an ordinance oftentimes it will go to the Planning Commission first and we'll go to the City Council so if you've got an application for for cannabis you've got really kind of two hurdles to overcome one is the Planning Commission you want them to approve it and then you've still got the City Council who can come in and basically gum up the works so you can't just count on a relationship with one council member the staff members are all of the bureaucrats all the people that are employed by the city so it'll be planners that you'll be dealing with it will be code enforcement officers and when you submit an application for cannabis depending on the type of use I think the most intensive use would be a volatile extractive process that's where you're using butane or something to extract cannaboids from the the actual buds you're gonna get into fire police code enforcement you're gonna get into Department of Toxic Substances Control if you have it because you're dealing with flammables you've got a whole host of people that you'll need to be dealing with yeah those are all staff members one interesting experience I had was in the city of I'm not gonna say what city it is I don't wanna embarrass anybody but it's a big city with a lot of experience with cannabis and I was in there with a client who was gonna build in extraction facility and a cultivation facility and we're sitting there and we're looking at plans and I'm asking him questions about why they want certain things and I've dealt with these staff members before and at one point they looked at me and they said hey Chad we have no idea what we're doing and yeah you know we kind of want to just work through this with you and we can change things as we need to go but we really don't know what we're doing and I was kind of flattered because they were like hey we want you to kind of help us out unfortunately my client was really freaked out and said I don't want to put my money into this you know what's really worried about it but this is a city it's a big city they've had dispensaries for years they should really know what they're doing but to these staff members who are the frontline people that the first people who are actually looking at plans for this this project they were looking at it's going I don't know I don't know what to do let's figure it out together that's a little bit scary you know so understand too that the bureaucrats they're not they're likely not going to say that in a meeting but this is this is new for the most of them and there may be you know mistakes made not because they're trying to screw up your project but just because it's new or they're not experienced in it they haven't approved you know indoor indoor cultivation you think about it the only thing people really grow indoors is weed I mean maybe there's people growing mushrooms but that's illegal anyways but they're really it's you know you're not growing lavender or you know I don't know March or anything else you're not growing any other herbs indoors so most cities have not had to deal with real indoor cultivation where you've got mold issues on top of the security issues but you've got mold you've got all the other mitigation issues and so it's it's just new for a city so the bureau you know you need to have patience with the bureaucrats
government relations and lobbying are kind of inter mixable terms lobbyists are typically going to be looking at policy a government affairs or government relations specialist like me would typically be working on the nuts and bolts of your approvals so different cities will call the process that they use to approve your project different names it could be a conditional use permit it could be a regulatory safety permit it could be just a cannabis permit but at the end of the day you're applying for a discretionary approval which means the city is not legally obligated to approve your project they can decide to approve it or decide not to approve it but they're going to be conditions on it so you don't want to get caught up in different words on what your permit is at the end of the day what you want is whatever the city says you have to get that's what you want if they call it a permit if they call it a license anything else that's what you want so you what you really are looking for though is a specialist that understands the processes most of these processes are the same regardless of whether you're opening a 7-eleven or a church at the end of the day the conditional use permit application is essentially the same you know you need plans that are a certain size you need parking studies and traffic studies these processes are the experience that you're looking for you want somebody that knows how to package a discretionary permit how to submit it and how to get it approved one of the things that bureaucrats and staff members hate is when somebody tries to do it themselves and they don't know what they're doing imagine you're sitting at work you've got a whole pile of work to do and somebody comes in and they want you to teach them how to do your job so you've got a degree maybe a master's degree you've been doing it for a long time they have no idea what they're doing if you've got a lot of work and a lot of cities are kind of understaffed most cities are pretty strapped on the budget so they don't have planners just sitting around twiddling their thumbs doing nothing they're actually despite what a lot of people think about bureaucrats they're actually working hard they don't have time to teach you what a conditional use permit is what a zone change is what a specific plan is and so if you don't know what you're doing they're gonna put it aside and they're gonna work on the projects they can work on because their work product and their their performance is judged on how many of these things that get approved and they're gonna be dealing with a lot of other projects than yours so if they can get these four projects done in the same amount of time it takes for them to teach you how to process yours they're not gonna waste the time on it so you want somebody that understands that so you want professional architects you want professional planners you want attorneys that understand the city's ordinances all of those things will speed up your process so I'm gonna move on to the
police I kind of called thought of this as the how not to get your butt kicked by the police if you've ever seen that video it's one of my favorites on YouTube the way you interact with the police today can impact the way you're treated by them forever and I what I mean by that is the guy with too many chairs who's now has a criminal record and didn't have one before every time he gets pulled over or interacts with law enforcement or a city and they know about that they're gonna look at him differently if he applies if he if he ever applies to be on a Planning Commission or he wants to get a CCW or anything else he has to disclose that so you want to make sure that you do everything in accordance with the law we call that compliance in our industry you're compliant with all of the guidelines and if for some reason you have a problem if you get open you're up and running and the police show up at your door or code enforcement shows up at your door and they want to inspect your facilities to make sure that you're still operating and in compliant in compliance just be cool to them if you say they can't come in they're gonna go get a warrant they're gonna knock your door down they're gonna come in anyways so it's a lot better to be polite Pleasant and collaborative you can be adversarial and custom out and be a jerk and you may get your ass kicked you may get your property impounded you may get your property destroyed you know when they knock the door off the hinges you saw in the video I mean parts of the door go flying stuff like that's not fun to deal with even businesses that aren't cannabis related have situations where people don't want to follow the law they don't want to listen and they're just gonna flip the bird to the city the city's not just gonna go oh jeez this guy doesn't want to deal with us and go away they're gonna just keep ratcheting it up they're gonna give you an abatement notice they're gonna keep on you and keep turning up the heat until it eventually gets to a criminal matter so I know of a man in a city right now who is facing criminal charges because he has piles of sand they're too high on his property no joke he's not allowed to store out have a material like that stored outside and he's not allowed to have it you know these huge mountains of it and he just thought the city would go that particular city would go away and leave him alone he wouldn't listen they talked to him they played nice and eventually they said okay we're gonna file criminal charges and all of a sudden oh wait a minute you know I'll take all that sand off my property so you want to make sure that you play nice because we've got weather regardless of your business and whether you think you're in compliance or not you want to make sure that the city agrees and understands that you're in compliance there's no upside at all to trying to be the rebel and fight the system at the end of the day they have the legal ability to just shut you down in the city of Anaheim Anaheim operates the power system it's great I have a building in Anaheim I run one of my businesses out of it's not cannabis but power is really cheap because it's Anaheim public utilities instead of Southern California Edison that's great until you want to open in a legal dispensary and they shut your power off and then so you put a generator outside and they come and they take your generator you know you can keep trying all these different workarounds but at the end of the day you're gonna shut down so it's best to be compliant and work collaboratively with the city one of the things to go back on we're talking about law enforcement is when you're dealing with any sort of consultant whether it's an attorney a lobbyist a land-use consultant we're not magic workers we can't just wave a magic wand and get you a permit lobbyists believe it or not are not walking around with a bunch of hookers and briefcases full of cash looking for politicians to hand this stuff to at least not to me but that's not the way it really works and I have had a lot of people over the years say to me can you guarantee that we'll get a license and I always tell them I can't guarantee you anything we will process your application and I'll do my best to make sure that everything's done properly but I can't guarantee you that this government body is going to approve your project so if somebody does I call these promises of success if somebody does promise success they're either lying and just gonna take your money or they're bribing somebody which is a federal corruption charge that you're now a party to neither one of those are good and if for some reason you get a license in a way like that there are a couple of elected officials in a city called Adelanto who just got busted by the FBI those permits that you got are now suspect and likely just to be pulled anyways so there's no upside to building your business and spending your money on a foundation that's not solid it's just not worth it when one of the best times I ever had a guy asked me if he would if I could you know basically guarantee a license I started asking him about criminal record cities wonder they're gonna want to see your criminal record a live scan for pretty much the managers the owners and the shareholders of your
operation they want to see it for everybody so I asked this guy you know do you have a clean record he's like well not really and it just happened to be that he was from a Caribbean island and I started talking to him and he said well I have a cocaine trafficking charge and I shot a policeman with a machine gun and I said I said look I'm not trying to be a jerk but you're Scarface nobody wants Scarface in their city like you can't traffic cocaine shoot people with machine guns and then come rolling to California and think we're a bunch of hillbillies you're just gonna go oh cool we're gonna give this guy license we also one of the other things that a government affairs specialist or a lobbyist or attorney can't do is we can't fix critical deficiencies in your team or your application or your location if you have a location that doesn't meet the guidelines for the city the city is not going to approve it if you have a person with a criminal record on your team or is it ownership in your corporation you're probably not going to get a license if your application doesn't meet all the requirements for the city you're probably not going to get your license so those are critical deficiencies that your attorney and your other specialists your government affairs specialist cannot cure on their own so those are the people you want to ask what do we need that should give you a checklist and you make sure that your team that you can control meets excuse me meets the requirements and is legit but it is basically impossible for either impossible or illegal for someone to get over a hurdle like that and if they do if they say they will you probably don't want to deal with that person are we doing on time okay I've got ten more minutes so that's my presentation I appreciate you all being here thank you for listening I'm available I'm available for questions now I can take questions from the audience and I'm also available afterwards anybody have any questions you mean your medical record the state level has been changing over and over and over and this kind of goes back to what I was saying earlier about the government not always knowing what it's doing I mean California this has really essentially been legal since 96 I mean medical marijuana and we still don't have our act together yeah so I couldn't say exactly how how San Francisco is gonna handle that it's likely that the reality is in the in the business that if people can buy it without them without a wreck they're not going to go through the hassle of going and getting a card if they can just go and buy it recreationally so some cities are still struggling because they've allowed medical cannabis dispensaries and things like that but they haven't allowed recreational so it's hard for them to get people that are actually gonna come in and you know put money into a business kind of a long-winded answer to I don't know but there's a question over here yes sir you know what not really I mean there are overall general guidelines but the steps are pretty much different in each city the processes can be different normal and some of the other organizations will have guidelines general guidelines to follow kind of like what I've spoken about today but not City I don't know of any place that you can put in a specific city and find out how do I get my license in this city yeah yeah yeah you end up having to actually go and read through the ordinance yourself in each city or hire somebody that knows it already sir to make a comment yeah one of the biggest mistakes is cities will typically have radius maps where they won't allow dispensaries or marijuana uses within a certain 500 foot
radius say of schools daycare centers things like that and people will basically tie up a site that's too close to a daycare center one of the problems with daycare centers is that there are licensed and unlicensed daycare centers so it's kind of hard the cities aren't always clear on that and it's very difficult to find out home daycare centers because they're not licensed in any one specific area so it's very difficult to map those out that's a really common mistake another common mistake is not background checking everybody I mean guys will get far down the line and then they're like wait a minute we didn't know that you just got a DUI you know people want to be involved and they don't want to open up and be honest about it so making sure that you do your due diligence upfront that you've got appropriate financing the other thing is people uses all their money upfront to secure the property and they don't have any money for the applications the architects all the other things tenant improvements cities want to see some cities have required that you prove that you've got 400,000 in one case liquid so that they know that you've got at least got enough money that you can make the improvements to the building put in the security apparatus that they require which can be we're going to talk about on the next panel and you know actually get up and running so making sure that you got the financing doing your due diligence on your own team and picking a good site those are probably the three biggest sir nothing doesn't in fact fit no you know you can grow six plants some cities allow outdoor some cities don't some cities require permits for that most of them don't but you've got the right to grow six for personal use no your we would call that a grandfather situation where you'd be grandfathered in so you just want to make sure if that does happen you want to make sure that you maintain documentation of that because at some point that daycare may come back and say to the city hey this dispensaries here and we don't like it and it may you may come up you want to make sure that you can prove everything was done properly don't count on other people to maintain the records and just because the just because you were approved doesn't mean that same boards there right it doesn't mean that same staff is there so yeah that's why the government affairs relationship maintaining it is essential yeah cities cities do change staff a lot especially in smaller cities people will have a tendency to want to go to a larger City and make more money so it's not uncommon to have staff members moving a lot so the people that may have approved your project planning commissioners change elected officials get termed out or don't get reelected so if a year later can you could have a big difference on the people there so always want to make sure that you're covering yourself you know paying attention to what's going on and and that you maintain good records of your initial application package and any mapping that you've done do I see another hand anywhere else sir I think you mentioned was hottie with it yeah West Hollywood is a city where you've got a supportive population and a supportive staff and a supportive group of elected officials the problem is it's West Hollywood it's super expensive and it's very restrictive they've got a criteria that they're gonna score on and they want world-class facilities so as far as the overall sentiment towards cannabis it's an easy City a city like Long Beach or Oakland they're easy but it also depends most cities will have a lot more restrictions on dispensaries so you'll have cities that may have restrictions on the number of dispensaries but they won't have a restriction on the number of extraction or cultivation facilities so those are kind of left it left - you know how much real estate isn't buffered out by daycare centers and things like that there are there are a lot of cities there's a city in Orange County that recently allowed distribution which sounded great they were gonna give for distribution licenses they only got two applications there was there just wasn't enough property you couldn't find land in that city it was small and with all the buffer zones they wanted a specific zoning which was industrial nobody could find property so they thought they were gonna make a lot of money on these for distribution facilities and they ended up with two like two applications and there's no guarantee that those will even go through I I would say that maybe a little less than 50% of applications don't end up getting approved or if they do get approved they don't even open up so I mean idiot is a it's a grind you know it's a long these are long-term projects and they take a lot of money
and they take a lot of time sir in the back [Music] [Music] the real estate thing is one of the most critical issues in the industry because it's expensive sometimes there might be a bunch of sites but as soon as cities start approving cannabis use property owners have unrealistic expectations of what their property values actually are there are operators in the industry that will literally go out and secure a property and then write ridiculous offers on all the other properties so that anybody else that wants to get into the industry and compete with them has to compete with these ridiculous offers so imagine you're a property owner and some guy offers you four million dollars for property that's worth one-and-a-half million the next person comes in and offers you one point seven which is a great deal for a one and a half million dollar property but in your mind you're going well I have this other offer you know so there are a lot of different games that impact the real estate but the fundamental market value and market conditions of expensive property limited property the zoning is a big one you know you're typically going to have zoning problems where or the city will say that you to have a manufacturing or cultivation facility you typically have to be in an industrial or manufacturing zone so making there may not be that many people that want to sell their property in those zones Long Beach had an interesting situation where they had decided that medians were parks and so if you can't have a dispensary within 500 feet of a park and all your medians are parks well you know the up medians all over the roads everywhere that was a problem so again you have a city that's supportive of it you don't have people coming out with pitchforks you know saying we don't want weed in our city and it was just a it's a problem with the process sir do you have any experience with projects it's very possible I've worked with multiple cities on kind of in the beginning crafting policies that work I've spoken at Council of Governments these are organizations of cities and staff members and my message has been that all of these activities already exist you've already got retailing of intoxicants you've got liquor stores right you've got consumption lounges those are bars indoor cultivation not so much but a lot of cities in California do have greenhouses and cultivation even extraction which is kind of one of the most exotic things all of the essential oils you know lavender oil and all the other things those are all botanical extraction product you know products so these aren't necessarily new processes it's just it's a weed instead of alcohol so the you can go and talk to cities and sometimes like I said sometimes cities will not pay attention to how they're impacted by their buffer zones or their radiuses and/or they won't understand the practicalities of the industry it's I've seen it where cities have come up with ideas on how they want to do it and they've made it so onerous that good operators people who understand real-estate economics are not going to come into their city because it's not worth risking the money it's too either it's too discretionary there's not enough surety that if you put together a good package it will get approved or there there are too many unknowns you don't know what the taxes are gonna be so you don't want to secure property and put a deposit on a property if the city's gonna come in and say there it's 20% tax it's just not economically viable so it is possible to have talks with cities and discuss what their policies are what the impacts are but they're not gonna there are a lot of people in the industry who are always coming out elected officials and staff members I want to give their opinion a lot of those people are I was gonna say idiots they're not credible and they don't come across credibly or they're trying to you know they're basically trying to approve their specific project so they're trying to manipulate the electeds so that their one project gets approved in nobody else's does so you if you're gonna try and you know influence local government you want to be even-handed and fair you want to know what you're talking about you want to be credible in your personal demeanor how you talk how you come across you know if you if you stood up a City Council meeting and talked about operating illegally for ten years they're probably not gonna want to hear what you have to say and also people do get kind of elected officials kind of get bombarded by a lot of crusaders who are like this is the miracle we you know miracle plant it's gonna save the world and you guys have to prove it because of this or that or that and really the cities are looking at a lot of times it's we need more revenue and we think this is gonna save us so so you want to make sure that you're you're thinking of it from their perspective and talking about things that are gonna matter to them I'm a little over time wrecks can keep taking questions or okay sir Oh like the reefer madness fear as some people are just not gonna it doesn't matter what you show them or how you talk to them they're just not gonna get over it to them it's drugs to them marijuana and heroin and crack are all in same category and it's not gonna change I think for elected officials if they can see or tour facilities you know dispensaries that are clean and well-run and look good and you know you know people they look like a bunch of crackheads in there that makes a difference for them so setting up tours for elected officials and staff members which is pretty common to let them see what well-run facilities look like but as far as just getting over the fear of marijuana being you know the devil weed it's that's a hard you know you're getting into the arguments that are really kind of philosophical in nature I mean it's almost a religious conversion for a lot of people and and some it's common that people will make claims that are almost unbelievable that's where some of the Crusaders come in I mean I had a guy come to me and say hey marijuana cures cancer I'm like so does that mean that everybody this smokes weed doesn't have cancer that would make sense to me obviously it's not true it was that's a very simplified conversation but it's hard to do but I think if you can talk to people and get people in their community that they might know a lot of people have used marijuana medicinally not you know not smoking I mean a lot of people would just smoked weed to get high but a lot of people that are credible have used cannabis products now medical and if you can get those people to talk to elected officials and staff members and other community members that's probably the most efficient and effective thing that you could do you know for somebody to actually stand up and say I use this and I mean Dana Rohrabacher is a congressman from Orange County and I think he's the first federal elect officials who have ever admitted to using medical marijuana camara wanna product so that was that's a big deal anybody else okay well thank you very much [Applause]