CANNABIS VILLAGE - How to deal with local government (if you must)...
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Physical systemCAN busEuler anglesKey (cryptography)Multiplication sign
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Presentation of a groupEmailDuality (mathematics)MathematicsTime zoneBridging (networking)Condition numberLevel (video gaming)Term (mathematics)Dependent and independent variablesDifferent (Kate Ryan album)SpacetimeComputer animation
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Physical systemElectronic meeting systemPresentation of a groupCategory of beingPhysical systemFamilyPoint (geometry)Variety (linguistics)Online helpFrame problemCondition numberMultiplication signIntegrated development environmentProjective planeCivil engineeringFilm editingComputer animation
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Local ringRAIDCASE <Informatik>Set (mathematics)Open setVideoconferencingOffice suiteComputer animation
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State of matterStandard deviationOrder (biology)Type theoryLevel (video gaming)Category of beingState of matterMereologyLocal ringOperator (mathematics)Basis <Mathematik>CASE <Informatik>RAIDVariety (linguistics)Mixed realityDifferent (Kate Ryan album)Multiplication signOffice suiteBit rate
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CodeStaff (military)Level (video gaming)Physical lawGoodness of fitPlanningVotingLattice (order)Greatest elementMultiplication signSoftware developerGod
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Civil engineeringInterior (topology)Common Language InfrastructureCodeVideo gameData managementPhysical lawSheaf (mathematics)MereologyNumberOperator (mathematics)CASE <Informatik>Process (computing)Point (geometry)CuboidWeb pageCartesian coordinate systemLatent heatLattice (order)Sign (mathematics)LoginCivil engineering
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Staff (military)Execution unitPlanningApproximationPermianSpectrum (functional analysis)CodeStaff (military)Line (geometry)Power (physics)Projective planeAreaPlanningProcess (computing)Information securityPoint (geometry)Cartesian coordinate systemLattice (order)Client (computing)Condition numberDifferent (Kate Ryan album)Office suiteFigurate numberType theoryBuildingBitOnline helpLevel of measurement
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Installable File SystemLink (knot theory)InformationMathematicsTheory of relativityStaff (military)Product (business)Projective planeTerm (mathematics)Time zonePlanningProcess (computing)WordCartesian coordinate systemObservational studyLevel of measurementMixed realityCondition numberDifferent (Kate Ryan album)Degree (graph theory)Multiplication signThumbnailNP-hard
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Electronic meeting systemCodeRow (database)Information technology consultingBuildingCategory of beingPhysical lawPower (physics)MereologyPhysical systemProjective planeQuicksortPlanningMetropolitan area networkWaveInteractive televisionComputer fileMultiplication signCollaborationismYouTubeBookmark (World Wide Web)Data managementVideoconferencingUtility softwareCartesian coordinate systemComputer animation
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Expert systemLiquidDilution (equation)Menu (computing)InfinityHecke operatorEmailConvex hullRow (database)Self-organizationLevel (video gaming)Shooting methodState of matterOperator (mathematics)Process (computing)Presentation of a groupCartesian coordinate systemChecklistRadiusPlastikkarteLevel of measurementMultiplication signUniform resource locatorMappingPhysical lawMereologyVirtual machineQuicksortNormal (geometry)Control flowOpen setWord
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Expert systemFluxSpiralDilution (equation)Host Identity ProtocolMiniDiscPort scannerChemical equationHistologyExecution unitConvex hullRow (database)Staff (military)BuildingCategory of beingArithmetic meanLine (geometry)Group actionProjective planeCountingNumberTime zoneAreaCASE <Informatik>Information securityDistribution (mathematics)Point (geometry)Cartesian coordinate systemLatent heatRadiusBuffer solutionWhiteboardWebsiteDifferent (Kate Ryan album)Fitness functionMappingRight angleTerm (mathematics)PlanningSocial classProper map
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Convex hullExpert systemMathematicsNatural numberPerspective (visual)Self-organizationGame theoryStaff (military)Product (business)Category of beingExpected valueFundamental theorem of algebraMultiplicationProjective planeLocal ringTime zoneGoodness of fitReal numberOperator (mathematics)Parameter (computer programming)Process (computing)Musical ensemblePoint (geometry)Data storage deviceData conversionLattice (order)RadiusBuffer solutionWebsiteCondition numberDifferent (Kate Ryan album)MedianMultiplication signMessage passingLimit (category theory)Regulator gene
Transcript: English(auto-generated)
00:00
Alright, our next speaker's up. We have a Mr. Chad Wanky. Will you, will you also be speaking? Uh, no. Okay. So, we have a Mr. Chad Wanky. He is the, uh, should I tell him about what you? Sure. Yeah. He is the mayor of Placentia, California, which is a town, uh, is it Orange County? Yeah. Yeah. So, I, uh, I was lucky enough to get in contact with this guy, and,
00:22
uh, he told me some very interesting stories about having been a young punk robber being dragged out of, uh, 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
00:41
punk rock attitude in my opinion. I don't care what you say. Uh, so I'm pretty excited to have him tell us how to deal with local government, if you must, uh, as it pertains to your legal kind of business. Thanks, Rex. Yeah. That was when I had hair. As you can see, I
01:01
have a hard time growing a mohawk now. Um, I tried to do it, you know, at the mohawk place and they laughed at me. Um, my name's Chad Vanka. 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, could be a conditional use permit or a zone change or a business license. Um, I specialize in
01:22
helping businesses kind of bridge the gap between bureaucracy and private sector. Um, so my goal here today is to focus on cannabis and, and explain, kind of start high level and look at what levels of government, uh, what the roles and responsibilities are of different levels of government. Um, explain how, if you're gonna open a marijuana business,
01:46
a cannabis business, um, I'm gonna say marijuana, cannabis, I'm talking about weed, so cannabis is nice, but, um, you know, the end of the day, marijuana is really what we're talking about. So if I switch back and forth, it's just cause I keep trying to go and
02:01
use the current, currently popular term cannabis, but in the back of my mind, it's still pot. Uh, so my goal here is really to leave you with a better understanding of why local government, which would be city or county government, is really critical if you're going to enter into the cannabis space. Um, most people, when they think of government, they think of the feds. Um, they, so the federal government has a
02:28
particular role. State governments got a particular role, but at the end of the day, most businesses are gonna deal with, um, local police, code enforcement, um, fire departments and things like that. Um, I also want to kind of outline the roles and responsibilities
02:42
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 at least, uh, you're kind of four armed 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
03:04
talking about. A lot of them don't. Um, I've seen a lot of people who are cannabis specialists and they've never worked on a conditional use permit 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,
03:25
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. Um, so the point is, like 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
03:43
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 city's got a population that's supportive of marijuana,
04:03
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 people are freaked out about weed.
04:20
I mean, Reefer Madness is alive and well, believe it or not. Like, people really believe that if, 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 you hate children and families. You want to bring drugs to our city. I'm kind of jaded. I thought people came up with ideas like this because they had some other
04:42
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 gonna be pimping themselves out on the street corner because they can smoke Reefer. And these, it sounds crazy and you're laughing, and I laughed until I realized
05:00
that people are really scared of this. So you'll see cities, my experience is in California, but you'll see cities that are anti-weed, 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,
05:23
the cities 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 wanna help you kinda cut your time frames down by doing things right in the very beginning. This is why it's important to understand local government.
05:44
This is a raid that took place in Santa Ana. It's not a joke when you see the outfits. You'll think that he and I actually made this at home. That really is a guy with his traffic helmet on. In this case, the police raided what I would call an illegal dispensary.
06:01
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
06:21
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.
06:42
So the problem 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.
07:03
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,
07:22
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 cities can make or break you. I mean, they can literally fine you out of existence. They can shut your doors. They can, if you're found to be a public nuisance,
07:41
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 your freedom. So I wouldn't say your life, but I mean guys with guns and badges.
08:01
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,
08:22
the DEA is not rating 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'd deputize local officers, and it would be a DEA raid.
08:43
Part of that was for asset forfeiture, but a lot of it was just funding. That's not really happening anymore. You've got 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
09:01
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.
09:23
And there's still a lot of confusion for people. I talk to people all the time who say, 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 it's under this. And somebody's given them the idea that it's okay to do it even without a city license.
09:40
And it is explicitly not acceptable. The only time you wouldn't need a city license is if you're an unincorporated county property, in which case there is no city. 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
10:02
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's 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. He's also chairman of the board of directors, but the city council is the legislative body and the board of directors.
10:23
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.
10:42
Charter cities have their own constitution, basically. 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.
11:02
The mayor 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.
11:21
People think it's cool, my friends get to say, go back to work and go, what'd you do this weekend? I hung out with the mayor and everyone's like, that's bitchin'. I still 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 running the city council meetings.
11:42
You're sitting there with a gavel if people get out of line. You're calling on people to vote and things like that, but you're not running day-to-day operations. What'll happen is the city council, when they hire the city manager, the city manager would essentially be the policy advisor. And that's the person that the city would go to to understand what you can and
12:04
can't do, so the top level staff, city attorney, 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 wanna go open up a dispensary in this city. And I say, well, it's not legal in that city.
12:21
They say, well, we know the mayor. And I think, well, that's great, you got one vote out of five, it gets you zero. But they have this idea that the mayor can just go, hey, hook my buddy up and give this guy a license. It doesn't work that way. And knowing the mayor is great, it's nice, it could be bad, because if the other four council members all hate the mayor,
12:42
you're not gonna get anything, it's probably gonna be worse for you. But the day-to-day decisions that are made by department heads like city attorneys, 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,
13:03
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, 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,
13:21
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 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 called upon by the city council and the planning commission to give their opinion and advice.
13:45
So if you're gonna open up a cannabis 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 either allows cannabis uses or is going to allow cannabis uses.
14:02
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.
14:21
The police chief can say, 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
14:42
you guys are gonna do it anyways, that's not responsible. So it's a big political risk 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
15:02
processes to approve cannabis uses. They're gonna then bring that to the city council with the recommendations to approve that. Once it's approved, implementing the law goes back to the staff level. And enforcement would be code enforcement and the police. So you really need to make sure that you're dealing with these people
15:24
in a polite, nice way. People, if you ever wanna 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.
15:42
Bureaucrats, 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 ruin your life. So the bureaucrats are faced with kind of some interesting situations. They can have people come in and treat them like garbage and then can't really do a whole lot about it.
16:02
So be nice. You don't have to kiss people's butts, but be nice, be appreciative. Ask questions, but at 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.
16:22
In Alabama, the police, city governments, and the DA and the sheriff seized over 2 million in 15. These are a little bit old, but the numbers don't come out every single year. So what you wanna do is just make sure that you are really paying attention. And on your team, if you're gonna get into this, you need a solid team. You need somebody that understands land use.
16:41
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, in their huge licensing packet, you would submit a package to them. They would go through all of their requirements and check off the boxes and score whether or not you meet all the requirements.
17:02
One of the requirements on 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 any of the other sections.
17:21
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 wanna make sure that they are dealing with people that will operate a business in accordance with the law that aren't gonna embarrass them.
17:42
And in many cases, they're gonna make money because cities will have taxes. And a 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 at the podium in public on TV and talk about all their illegal activity.
18:01
I literally saw a guy get up and talk about how he's been extracting and making edibles for ten years and giving them to his grandma and his mom's been selling them and all these things and 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 goes, why did you bring that idiot?
18:21
And I'm like, 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 nobody wants the guys from Scarface running a marijuana dispensary or anything else having to do with marijuana in their city.
18:44
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 mayors. When I talk about appointed officials, those would be people that are appointed by the city council. Typically commissioner or committee members.
19:01
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 commissions are advisory bodies to the city council. So they will have an area like a traffic safety commission or
19:20
a 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,
19:44
land use ordinance, conditional use permits. So if a city's got an ordinance, oftentimes it'll go to the planning commission first, and then it will go to the city council. So if you've got an application for cannabis, you've got really kind of two hurdles to overcome.
20:00
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.
20:22
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 cannabinoids from the actual buds. You're gonna get into fire, police, code enforcement.
20:43
You're gonna get into Department of Toxic Substances Control. Because you're dealing with flammables, you've got a whole host of people that you'll need to be dealing with. And 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.
21:02
And I was in there with a client who was gonna build an extraction facility and a cultivation facility. And we're sitting there and we're looking at plans and I'm asking them 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.
21:22
And they're like, we kinda wanna 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 kinda flattered because they were like, hey, we want you to kinda help us out. Unfortunately, my client was really freaked out and said, I don't wanna put my money into this, was really worried about it. But this is a city, it's a big city.
21:41
They've had dispensaries for years. They should really know what they're doing. But to these staff members who are the frontline people, they're the first people who are actually looking at plans for this project. They were looking at it and just going, I don't know, I don't know what to do. Let's figure it out together. That's a little bit scary.
22:00
So understand too that the bureaucrats, they're likely not going to say that in a meeting. But this is new for most of them. And there may be 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 indoor cultivation.
22:22
You think about it, the only thing people really grow indoors is weed. Maybe there's people growing mushrooms, but that's illegal anyways. But you're not growing lavender or, I don't know, margarine, 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
22:41
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 just new for a city. So you need to have patience with the bureaucrats. Government relations and lobbying are kind of intermixable terms.
23:02
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.
23:21
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 there are going to be conditions on it. So you don't want to get caught up in different words on what your permit is.
23:46
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 what you really are looking for, though, is a specialist that understands the processes.
24:02
Most of these processes are the same regardless of whether you're opening a 7-11 or a church. At the end of the day, the conditional use permit application is essentially the same. 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.
24:23
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.
24:44
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.
25:00
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 performance is judged on how many of these things they get approved.
25:24
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.
25:43
All of those things will speed up your process. So I'm gonna move on to the police. I kinda 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
26:04
by them forever, and what I mean by that is the guy with too many chairs who 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 ever applies to be on a planning commission or
26:21
he wants to get a CCW or anything else, he has to disclose that. So you wanna 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
26:44
door and they want to inspect your facilities to make sure that you're still operating and 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.
27:01
You can be adversarial and cuss them out and be a jerk and you may get your ass kicked, you may get your property impounded, you may get your property destroyed. 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.
27:21
Even businesses that aren't cannabis related have situations where people don't wanna follow the law, they don't wanna listen, and they're just gonna flip the bird to the city. The city's not just gonna go, jeez, this guy doesn't wanna 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.
27:43
So I know of a man in a city right now who is facing criminal charges because he has piles of sand that are too high on his property, no joke. He's not allowed to have material like that stored outside, and he's not allowed to have these huge mountains of it.
28:00
And he just thought 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 then all of a sudden, wait a minute, I'll take all that sand off my property. So you wanna make sure that you play nice because regardless of your business and whether you think you're in compliance or not,
28:20
you wanna 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.
28:41
It's great, I have a building in Anaheim I run one of my businesses out of, it's not cannabis. But the power's really cheap because it's Anaheim Public Utilities instead of Southern California Edison. That's great until you wanna open an illegal dispensary and they shut your power off. And then, so you put a generator outside and they come and they take your generator. You can keep trying all these different workarounds, but at the end of the day, you're gonna shut down.
29:02
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.
29:22
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,
29:40
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 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
30:03
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 the city called Atalanto who just got busted by the FBI.
30:20
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 ask me if he would,
30:41
if I could basically guarantee a license, I started asking him about criminal record. Cities, they're gonna wanna see your criminal record, a live scan for pretty much the managers, the owners, and the shareholders of your corporation. They wanna see it for everybody. So I asked this guy, do you have a clean record?
31:01
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, look, I'm not trying to be a jerk, but you're Scarface. Nobody wants Scarface in their city. You can't traffic cocaine, shoot people with machine guns, and
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then roll into California and think we're a bunch of hillbillies. We're just gonna go, cool, we're gonna give this guy a license. We also, one of the other things that a government affairs specialist or a lobbyist or an 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
31:41
the city, the city's not gonna approve it. If you have a person with a criminal record on your team or as an ownership in your corporation, you're probably not gonna get a license. If your application doesn't meet all the requirements for the city, you're probably not gonna get your license. So those are critical deficiencies that your attorney and
32:02
your other specialist, your government affairs specialist, cannot cure on their own. So those are the people you wanna ask, what do we need? They 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
32:23
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. How are we doing on time? Okay, I've got ten more minutes, so that's my presentation. I appreciate you all being here.
32:41
Thank you for listening. I'm available for questions now. I can take questions from the audience, and I'm also available afterwards. Does anybody have any questions? Sir? I heard in the text of the marriage certificates, the death certificates,
33:05
the birth certificate, you get my card. I got it wrapped first. I heard in January they're gonna change recommendations.
33:21
I just heard word of mouth of that, are you aware of it? You mean your medical rec? Even though it's wide open recreational in California, or in parts of California? You know the law in California at the state level has been changing over and over and over. And this kinda goes back to what I was saying earlier about
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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 San Francisco's gonna handle that. It's likely that the reality is in the business that
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if people can buy it without a rec, they're not gonna 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. It's hard for them to get people that are actually gonna come in and
34:20
put money into a business. Kind of a long-winded answer too, I don't know. But, is there a question over here? Yes sir. Are there any general guidelines as to what do you do on a general basis? If somebody wants to go into business, is there a Wikipedia of sorts
34:45
to kinda break down the different steps to open up the business? 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,
35:02
general guidelines to follow, kinda 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, you end up having to actually go and read through the ordinance yourself in each city. Or hire somebody that knows it already. In a place like California, it's quite open.
35:38
Sir?
35:50
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
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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 kinda hard. The cities aren't always clear on that. And it's very difficult to find out home daycare centers,
36:21
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. People wanna be involved, and they don't wanna open up and be honest about it.
36:44
So making sure that you do your due diligence up front, that you've got appropriate financing. The other thing is people use all their money up front to secure the property, and they don't have any money for the applications, the architects, all the other things. Tenant improvements. Tenant improvements. Cities wanna see, some cities have required that you prove that you've got $400,000,
37:04
in one case, liquid, so that they know that you've at least got enough money that you can make the improvements to the building, put in the security apparatus that they require, which we're gonna talk about on the next panel, and actually get up and running. So making sure that you've got the financing,
37:20
doing your due diligence on your own team, and picking a good site. Those are probably the three biggest. Sir? Nothing. Doesn't impact you. No, you can grow six plants.
37:41
Some cities allow old 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. Yeah. Sir?
38:04
Also, we would call that a grandfather situation where you'd be grandfathered in. So you just wanna make sure, if that does happen, you wanna make sure that you maintain documentation of that. Because at some point that daycare may come back and say to the city, hey, this dispensary's here and we don't like it.
38:22
And you may come up, but you wanna make sure that you can prove everything was done properly. Don't count on other people to maintain the records. And just because you were approved doesn't mean that same board's there. Right. Doesn't mean that same staff is there. So that's why the government affairs relationship, maintaining it, is essential.
38:40
Yeah, cities do change staff a lot. Especially in smaller cities, people will have a tendency to wanna 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 re-elected. So if a year later, you could have a big difference on the people there.
39:01
So I just wanna make sure that you're covering yourself, paying attention to what's going on, and that you maintain good records of your initial application package and any mapping that you've done. Did I see another hand anywhere else? Sir? I just mentioned some cities that you would say are easier than others.
39:22
I know you mentioned West Hollywood, but they still kinda have it together. 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
39:42
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,
40:02
but they won't have a restriction on the number of extraction or cultivation facilities. So those are kinda left to how much real estate isn't buffered out by daycare centers and things like that. There are a lot of cities, there's a city in Orange County that recently allowed distribution, which sounded great.
40:22
They were gonna give four distribution licenses. They only got two applications. 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 four distribution facilities and they ended up with two applications.
40:42
And there's no guarantee that those will even go through. 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, it's a grind. These are long term projects, and they take a lot of money, and
41:01
they take a lot of time. Sir, in the back. That was actually in the city, or I mean, is it 50%?
41:32
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
41:41
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.
42:02
So imagine you're a property owner and some guy offers you $4 million for property that's worth $1.5 million. The next person comes in and offers you $1.7, which is a great deal for a $1.5 million 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 conditions of expensive property,
42:25
limited property, the zoning is a big one. You're typically gonna have zoning problems where, or the city will say that to have a manufacturing or cultivation facility, you typically have to be in an industrial or manufacturing zone. So there may not be that many people that wanna sell their property
42:43
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 have medians all over the roads everywhere.
43:03
That was a problem. So again, you have a city that's supportive of it. You don't have people coming out with pitchforks saying, we don't want weed in our city. And it's a problem with the process. Sir? Do you have any experience with projects trying to talk to local governments to
43:22
change regulations and how possible is that? 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.
43:41
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.
44:01
Even extraction, which is kind of one of the most exotic things. All of the essential oils, lavender oil and all the other things, those are all botanical extraction products. So these aren't necessarily new processes. It's just, it's weed instead of alcohol. So you can go and talk to cities and sometimes, like I said,
44:22
sometimes cities will not pay attention to how they're impacted by their buffer zones or their radiuses, or they won't understand the practicalities of the industry. 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,
44:43
people who understand real estate economics, are not gonna 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 are too many unknowns, you don't know what the taxes are gonna be.
45:00
So you don't want to secure property and put a deposit on a property if the city's gonna come in and say 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 and what the impacts are. But there are a lot of people in the industry who are always coming out elected officials and staff members and want to give their opinion.
45:21
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 basically trying to approve their specific project. So they're trying to manipulate the elected so that their one project gets approved and nobody else's does. So if you're gonna try and influence local government,
45:44
you want to be even-handed and fair. You wanna know what you're talking about. You want to be credible in your personal demeanor, how you talk, how you come across. If you stood up a city council meeting and talked about operating illegally for
46:00
ten years, they're probably not gonna wanna hear what you have to say. And also people do get, elected officials kind of get bombarded by a lot of crusaders who are like, this is the miracle plant. It's gonna save the world and you guys have to approve it because of this or that or that, and really the cities are looking at, a lot of times it's,
46:23
we need more revenue and we think this is gonna save us. So you want to make sure that you're thinking of it from their perspective and talking about things that are gonna matter to them. I'm a little over time. Rex, can, you want me to keep taking questions or? Okay.
46:40
Sir. Oh. Sir. When you were describing. Like the reefer atmosphere? Presumably, yeah. Some people are just not gonna, it doesn't matter what you show them or
47:01
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 the 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
47:23
you don't have people that look like a bunch of crack heads 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 the devil weed, that's a hard, you're getting into the arguments that are really kind of
47:43
philosophical in nature. I mean, it's almost a religious conversion for a lot of people. 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 that smokes weed doesn't
48:01
have cancer? That would make sense to me. Obviously, it's not true. And 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 smoking.
48:21
I mean, a lot of people have 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. For somebody to actually stand up and say, I use this. And I mean, Dana Rohrabacher is a congressman from Orange County.
48:43
And I think he's the first federal elected official to have ever admitted to using a medical marijuana product. So that's a big deal. Anybody else? Okay, well thank you very much.