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HomeMy WebLinkAbout2023 CON Mr. Nice Guy - Cannabis Business License Development Agreement (2)DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE COMMERCIAL CANNABIS BUSINESS LICENSE DEVELOPMENT AGREEMENT This Development Agreement ("Agreement") is made and entered into as of June 20, 2023 (the "Effective Date") between the CITY OF NATIONAL CITY, a California municipal corporation ("City"), and , a California LLC doing business as P(%(c ' ts-u ("Licensee"). City and Licensee are hereinafter collectively referred to as the "Parties" and singularly as "Party." RECITALS A. The City Council previously adopted an ordinance to add Chapter 9.60 to National City Municipal Code ("NCMC") to permit limited commercial cannabis activities. B. Pursuant to Resolution No. 23-, the City Council adopted Application Procedures and Guidelines (the "Guidelines") governing the issuance of commercial cannabis licenses. C. Licensee submitted an application for a commercial cannabis license dated April 7, 2022 (the "Application"), which was reviewed by the City in accordance with the Guidelines. D. The Licensee identified in the Application that it was at least 51% owned by residents of National City, which made the Licensee's Application eligible to receive the local preference criteria contained in the Guidelines. E. On [June 20, 2023], the City awarded a Commercial Cannabis Permit to Licensee ("Permit"), to operate a retail and distribution, cannabis business which will be located at 1 G'S CMG Gtht'W by , also known as San Diego County APN SSR- a ('a!6 (the "Property"). F. Pursuant to NCMC Section 9.60.100 and the Guidelines, the Licensee must enter into an Development Agreement with City prior to commencing operations. G. The City and Licensee freely and voluntarily negotiated the terms and conditions of this Development, and the City Council adopted Resolution No 23- approving this Agreement. H, The Parties acknowledge that this Agreement is not a statutory development agreement authorized by Government Code section 65864 and that this Agreement confers no entitlement or vested rights of any kind to Licensee to operate a cannabis business. AGREEMENT NOW, THEREFORE, in consideration of the covenants and obligations set forth herein, the receipt and adequacy of which is hereby acknowledged, the parties agree as follows: 1. Incorporation of Recitals. DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE The recitals and defined terms set forth above are hereby incorporated into this Agreement. 2. Effective Date and Term. This Agreement shall commence on the Effective Date and remain in effect until the expiration, termination, surrender, or revocation of Licensee's Commercial Cannabis Permit, unless sooner terminated as provided for herein. 3. Description of Business and Ownership. Licensee's has been awarded a Commercial Cannabis Permit dated June 20, 2023 to operate a commercial cannabis business at the Property (the "Business"). Licensee shall operate the Business as a retailer and distributor, as those terms are defined in NCMC Chapter 9.60. The terms and conditions of the Commercial Cannabis Permit are incorporated into this Agreement by reference. 4. Applicable Laws and Regulations. 1.1 General. Licensee shall at all times comply fully with all current and future State and City laws and regulations applicable to Licensee's Business, including but not limited to NCMC Chapter 9.60. Licensee shall ensure such compliance by all of Licensee's employees, contractors, vendors, and members of the public invited or allowed access to the Business. 1.2 State License. Licensee shall promptly apply for and obtain all State licenses required for the Business's operations. Failure to obtain and maintain required State licenses during the term of this Agreement shall constitute a default under this Agreement and shall be grounds for termination. 5. Conditions of Approval. In addition to the requirements contained in the Plans, as defined in Section 6 below, the Licensee shall at all times operate the Business in accordance with the Conditions of Approval for the Business, attached hereto as Exhibit A and incorporated herein by reference (the "Conditions of Approval"). To the extent there is a conflict or inconsistency between the Conditions of Approval and the Plans, the Conditions of Approval shall control. To the extent the Conditions of Approval conflict with any applicable state or local law or regulation, currently existing or enacted in the future, the applicable law or regulation shall control. The City Manager, or his or her designee, shall have the authority to amend the Conditions of Approval subject to the requirements of this Agreement. 2. Operating Requirements. 2.1 Operating Requirements. In addition to any other applicable requirements, Licensee shall at all times operate the Business in accordance with the operating procedures contained in Exhibit B, attached hereto and incorporated by reference. Such operating procedures include requirements for the opening and closing of the Business, customer check -in, product delivery, use of specific point -of -sale software, inventory control, diversion prevention, product 2 DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE distribution, transportation procedures, odor control, and quality control. Nothing in this section shall prevent the Licensee from changing the mix and type of cannabis products at the Business. 2.2 Safety Plan. In addition to any other applicable requirements, Licensee shall at all times operate the Business in compliance with the Safety Plan contained in Exhibit C, attached hereto and incorporated by reference, including but not limited to all fire prevention and suppression measures, accident and reporting procedures, medical emergency response procedures, and waste management procedures identified therein. 2.3 Security Plan. In addition to any other applicable requirements, Licensee shall at all times operate the Business in compliance with the Security Plan submitted with the Licensee's application and on file with the City, The Security Plan identifies access control requirements, perimeter security standards, inventory control measures, cash handling procedures, information/records security, lighting and surveillance requirements, theft and diversion prevention strategies, and employee training policies, among other topics. 2.4 Amendments. Licensee shall operate Business in accordance with the requirements of the this Section 5 and the plans contained in Exhibit B and C attached hereto (collectively, the "Plans") , with such amendments or changes approved by the City Manager, or his or her designee. To the extent there is a conflict or inconsistency between the Plans and this Agreement, this Agreement shall prevail. 6. Community Benefits. Licensee has offered to provide certain community benefits as part of the operation of the Business, and the City has accepted such offer. The community benefits to be provided by Licensee are specified in this Section. 2.5 National City Community Benefit Fund. a. Community Benefit Fund. Licensee hereby agrees to donate an amount equal to the greater of: i) Fifty Thousand Dollars ($50,000), or ii) one percent (1%) of the Net Profits of the Business, as defined herein, to nonprofit community organizations located and doing business within National City, subject to the requirements of this Section (the "National City Community Benefit Fund"). b. Annual Plan. No later than the October 1 of each year, beginning the year after the Business commences operations, Licensee shall submit to the City an annual plan for the disbursement of the National City Community Benefit Fund (the "Annual Plan"). The Annual Plan shall identify the recipients of the funds, the estimated amount that shall be provided to each recipient, and such other information as may reasonably be required by the City. The recipients of the proceeds of the National City Community Benefit Fund shall: i) be exempt from taxation pursuant to Internal Revenue Code section 501(c)(3), 501(c)(4) or 501(c)(6), ii) shall be in good standing with the laws of the State of California, and iii) shall provide sufficient services within the City of National City that benefit the public (each a "Recipient"). The City may, in its sole discretion, determine that a proposed Recipient does not provide sufficient services within National City that benefit the public, and such determination shall be conclusive. The City shall review, and either approve or reject, the Annual Plan. If the City rejects the Annual Plan, it shall notify the Licensee in writing of the reasons for the , DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE rejection. Thereafter, the Licensee shall submit a revised Annual Plan within forty-five (45) days. If the City fails to approve or reject the Annual Plan within thirty (30) days of submittal by the Licensee, the Annual Plan shall be deemed approved. Licensee may at any time apply to amend its Annual Plan, subject to the same procedures contained in this Section 7.1. 2.6 General Fund Contribution. a. Voluntary General Fund Contribution. Licensee hereby agrees to donate an amount equal to five percent (5%) of the Gross Receipts of the Business, as defined herein, to the City's General Fund, subject to the requirements of this Section 7 (the "General Fund Contribution"). The General Fund Contribution may be used for any lawful municipal purpose as determined by the City Council, in its sole and absolute discretion. b. Monthly Payments. No later than the 15"' day of each calendar month, Licensee shall pay to the City the General Fund Contribution from the previous calendar month. The payment shall be accompanied by a report, on a form approved by the City's Finance Director, identifying the total amount of the Gross Receipts of the Business from the previous month and any other information requested by the City. c. Penalty for Delay. If Licensee fails to remit any amount owed pursuant to Section 7.2(b) within the time required, Licensee shall pay a penalty of ten percent (10%) of the amount owned in addition to the outstanding amount. The amount of the penalty shall increase by an additional ten percent (10%) each additional thirty (30) days during which the Licensee fails to make the requirement payment. Licensee and City agree that this penalty is necessary in order to ensure that Licensee timely provides the funds it has promised to donate and which the City has budgeted based on such promise. 2.7 Financial Reporting & Administration. a. Gross Receipts. As used in this Agreement, "Gross receipts" includes the total amounts actually received or receivable during a calendar year for the sale of any cannabis goods for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale or delivery of cannabis materials, cannabis services, cannabis goods within the City of National City, or outside the City of National City when the proceeds are credited to or for the account of the Business. Included in "gross receipts" shall be all commissions, fees, receipts, receipts from coin -operated equipment, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever. Excluded from "gross receipts" shall be the following: i) cash discounts allowed and taken on sales; ii) credit allowed on property accepted as part of the purchase price and which property may later be sold; iii) any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser; iv) such part of the sale price of property returned by purchasers upon rescission of the contract of sale refunded either in cash or by credit; v) amounts collected or held in trust for others where the business is acting as an agent or trustee, to the extent that such amounts are paid to or for the benefit of those for whom collected (the collector may require proof of payment or disbursement; DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE vi) receipts of refundable deposits, except that refundable deposits forfeited and taken into the income of the business shall not be excluded and vii) non -cannabis materials, goods, wares or merchandise. b. Net Profits. As used in this Agreement, "Net profits" shall mean the net taxable income of the Business as reported annually to the California Franchise Tax Board on its annual tax return, less any federal, state, or local taxes paid by Business and not otherwise reported as part of the net taxable income of the business, c. Reporting of Gross Receipts. No later than February 15 of each year during the Term of this Agreement, Licensee shall deliver to City a report, on a form approved by the City's Finance Director, showing: (i) The Business's Gross Receipts and Net Profits from the previous calendar year (the "Statement of Receipts"); (ii) The total amount of the General Fund Contribution; and (iii) The total amount contributed to the National City Community Benefit Fund and the actual amount of money provided to each Recipient. d, Statements of Receipts. Licensee shall keep complete, accurate and appropriate books and records of all receipts and expenses from the Business's operations in accordance with generally accepted accounting principles ("Books and Records"). Books and Records, as well as all other relevant documents as City reasonably requires, shall, upon reasonable written notice, be open for inspection by City, its auditors, or other authorized representatives. If at any time during the Agreement, such Books and Records are deemed inadequate in the reasonable judgment of City, Licensee shall, upon the written notice of City, be given a one quarter period (three months) to cure such inadequacies. If, in the reasonable judgment of the City, Licensee has not cured the Books and Records inadequacies, City shall consider Licensee to be in default of this Agreement, and may choose to terminate this Agreement. e. Audit. City shall have the right to audit and examine Licensee's Books and Records, and other relevant documents and items in Licensee's possession ("Audit Items"), but only to the extent necessary for a proper determination of gross receipts, net profits, and expenses from operations. Upon written request by City, Licensee shall make all Audit Items available to the City within thirty (30) days of City's request. f. Retention of Receipts. Licensee shall preserve Audit Items in the City for a period of at least five (5) years. g. Copies of Tax Filings. Upon request, Licensee shall provide City with copies of any reports and tax filings Licensee is required to provide to the County of San Diego, the State, and the federal government. DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE h, Future Revenue Mechanisms. During the term of this Agreement, if the City imposes an alternative revenue mechanism specifically related to commercial cannabis business permit holders, Licensee agrees to pay the City the greater of the payment required under such alternative revenue mechanism or the General Fund Contribution. Payments that are not specific to commercial cannabis business permit holders (e.g. apply to both cannabis and non -cannabis businesses), shall be in addition to, and not in lieu of, the payments required by this Agreement. 2.8 Miscellaneous Community Benefits a, Community Clean Up. Licensee shall organize and host one community clean-up event per calendar year. Licensee shall be solely responsible for all costs associated with such event, and shall obtain any permits and approvals from any responsible govermnental agency necessary for the event. Licensee shall coordinate the location of the community clean-up events with the City to ensure that community clean-up events sponsored by cannabis businesses are distributed throughout the City of National City. b, Drug Prevention Seminars. The Licensee shall participate in at least two (2) drug prevention seminars hosted collectively by all cannabis businesses operating in National City. The seminars shall be offered free of charge to the public at a location within the City of National City, and shall focus on responsible use of cannabis and secure storage of cannabis to prevent access by minors. Licensee shall work in good faith to develop and sponsor such seminars. c. Employment Priorities. In an effort to further restorative justice and the local economy, the Licensee shall use a good faith effort to ensure that at least thirty percent (30%) of the employees of the Business are residents of the City of National City and at least twenty percent (20%) of the employees of the Business are individuals previously convicted of misdemeanor offenses related to the sale, distribution, use, or cultivation of cannabis. 7. Location Change & Transfer 2.9 Change of Location, The Licensee shall not change the location of the Business unless and until the Licensee first complies with the requirements of NCMC Section 9.60.430, and obtains the necessary approvals. 2.10 Transfer of Ownership. The Licensee shall not transfer ownership or control of the Business or the Permit unless and until the Licensee first complies with the requirements of NCMC Section 9.60,420, and obtains the necessary approvals. 2.11 Local Ownership. The Licensee identified in the Application that it was at least fifty-one percent (51%) owned by residents of National City, Licensee acknowledges that it was eligible to receive the local preference criteria in the Guidelines based on this representation. Notwithstanding anything in NCMC Chapter 9.60 to the contrary, Licensee may not change its ownership structure in anyway such that less than fifty-one percent (51 %) of the Licensee is owned by residents of National City. In addition to any other applicable requirement, 6 DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Licensee shall notify the City every time there is a change in its ownership, and shall identify whether or not the new owner is a National City resident. 8. Processing Fees and Charges. Licensee shall pay City, processing, inspection, plan checking, permit, and monitoring fees and charges required by City for processing Licensee's applications and requests for permits, inspections, approvals and actions, and monitoring compliance with any permits issued or approvals granted, or the performance of any conditions. 9. No Vested Rights. The Parties acknowledge and agree that this Agreement is not a statutory development agreement authorized by Government Code section 65864. This this Agreement confers no entitlement or vested rights of any kind to Licensee to operate the Business, or engage in any commercial cannabis activity. 10. Voluntary Agreement. The terms and conditions of this Agreement are the result of voluntary negotiations between the Parties, and no term in this Agreement has been imposed by the City, including without limitation the General Fund Contribution. The City and Licensee have each voluntarily and freely elected to enter into this Agreement. Each of the Parties have had an equal opportunity to participate in the negotiating and drafting of this Agreement, and to review the Agreement with legal counsel, therefore any construction as against the drafting party shall not apply to this Agreement. 11. Indemnity. Licensee shall indemnify, defend, and hold harmless to the fullest extent permitted by law, City and its officers, officials, employees, consultants, attorneys, and volunteers ("Indemnitees") from and against any and all claims, liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with the operation or existence of the Business, this Agreement, or the Property (including any challenge to the validity of any provision of this Agreement or the Permit approvals, or Licensee's failure to comply with any of its obligations under this Agreement, or Licensee's failure to comply with any current or prospective law); provided, however, that Licensee shall have no obligations under this Section for such loss or damage which was caused by the sole negligence or willful misconduct of the Indemnitees. This indemnification obligation shall survive this Agreement and shall not be limited by any insurance policy, whether required by this Agreement or otherwise. 12. Waiver & Hold Harmless Licensee waives, releases, and holds harmless the City and its officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney's fees), suits or other expenses which arise out of, or which are in any way 7 DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE relate to this Agreement, including the enforcement of any term or condition stated herein, the payment of the General Fund Contribution, the issuance of the Cannabis Business Permit, or the Operation of the Business. Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge that the City would not have entered into this Agreement had it been exposed to liability for damages from Licensee, and therefore, Licensee hereby waives all claims for damages against the City for breach of this Agreement. Licensee hereby voluntarily and unconditionally waives any rights it may have to challenge this Agreement or any term contained herein. Licensee specifically waives the provision of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THIS RELEASE, AND THAT IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR THE RELEASED PARTY." In this connection and to the extent permitted by law, Licensee hereby agrees, represents and warrants that Licensee realizes and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses which are presently unknown, unanticipated and unsuspected, and Licensee further agrees, represents and warrants that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Licensee nevertheless hereby intends to release, discharge and acquit the City from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses which might in any way be included as a material portion of the consideration given to City by Licensee in exchange for City's performance hereunder. City has given Licensee material concessions regarding this transaction in exchange for Licensee agreeing to the provisions of this Section. City and Licensee have each initialed this Section Via rther indicate their awareness and acceptance of each and every provision hereof. �h CITY'S INITIALS 13. Liability. LICENSEE'S INITIALS City shall not assume liability or responsibility for any conditions related to the construction or use of the Business that may be in violation of local and/or state health and building codes ("Conditions"). City shall not assume responsibility for correcting Conditions, either existing or discovered during the course of the construction or operation of the Business. Failure to correct Conditions during the course of construction or operation of the Business shall not imply that City has accepted Conditions nor forfeit City's right to have Conditions corrected at a future date. 14. Defaults. , DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Notwithstanding other provisions of this Agreement, any failure by either party to perform any term or provision of this Agreement, which failure continues uncured for a period of thirty (30) days following written notice of such failure from the other party ("the Complaining Party") (unless such period is extended by mutual written consent), shall constitute a default under this Agreement. The Complaining Party's notice ("Default Notice") shall specify the nature of the alleged failure, and may specify the manner in which the failure satisfactorily may be cured by the other party ("the Defaulting Party"). If the nature of the alleged failure is such, that it cannot reasonably be cured within such thirty (30) day period, then no default shall be deemed to have occurred if: (a) the cure shall be commenced at the earliest practicable date following receipt of the Default Notice; (b) the cure is diligently prosecuted to completion at all times thereafter; (c) at the earliest practicable date (if no event later than thirty (30) days after the Defaulting Party's receipt of the Default Notice), the Defaulting Party provides written notice to the Complaining Party that the cure cannot practicably be completed within such thirty (30) day period; and (d) the cure is completed at the earliest practicable date. Upon the occurrence of a default under this Agreement, the Complaining Party may, in addition to any and all other rights or remedies of the Complaining Party hereunder and/or provided by law, shall have the right to: i) terminate this Agreement, or ii) commence an action against the Defaulting Party for damages, injunction and/or specific performance. No remedy specified in this Section shall be considered exclusive of any other remedy, but the same shall be cumulative and shall be in addition to every other remedy provided hereunder or now or hereafter existing at law or in equity or by statute, and every power and remedy provided by this Agreement may be exercised from time to time and as often as occasion may arise or as may be deemed expedient, subject to any limitations set forth herein. 15. Termination. 2.12 By Mutual Consent. This Agreement may be terminated in whole or in part by the mutual written consent of all the Parties. 2.13 Failure to Obtain or Maintain Required State or Local Licenses. If Licensee fails to obtain or maintain in effect all State and City licenses required for the Business, City may immediately terminate this Agreement. 2.14 State or Federal Action. In the event that State law permitting the use for which the Commercial Cannabis Permit was issued is amended or repealed resulting in the prohibition of such use, either Party may terminate this Agreement. 2.15 Surrender or Revocation of Commercial Cannabis Permit. If Licensee voluntarily surrenders their Permit, or if Licensee's Permit is revoked by City, Licensee shall immediately cease all operations at the Business, and this Agreement shall teiuiinate automatically, without further action required by either Party. DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE 2.16 Default. If Licensee is in default of any provision of this this agreement, including but not limited to the requirements of Section 7, the City may terminate this Agreement pursuant to Section 14. 2.17 Effect of Termination of Agreement on Commercial Cannabis Permit. Licensee agrees that termination of this Agreement in accordance with this Section, shall also result in the automatic termination of the Licensee's Commercial Cannabis Permit. Upon termination of this Agreement, Licensee shall remit all fees and payments due as of the effective date of the termination. 16. Future Amendments. The City Manager shall have the authority to approve minor amendments to this Agreement without further approval from City Council. For the purposes of this section, an amendment shall be a minor amendment if it substantially conforms with the material terrns of this Agreement. Without limiting the generality of the foregoing, changes to the time for either Party to perform any obligation and changes in reporting obligations may be made via a minor amendment. Changes to the amount of gross receipts the Licensee must use for the National City Community Benefit Fund or the General Fund Contribution shall not be minor amendments. The determination of the City Manager regarding whether an amendment qualifies as a minor amendment shall be definitive. 17. Assignment; Binding on Successors. Licensee may not transfer or assign its interests under this Agreement, in whole or in part, without the prior written consent of the City, which may be withheld for any reason. Subject to the restrictions on transfers set forth herein or the NCMC, this Agreement shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any permitted successor and assign of such Party who has acquired an interest in compliance with this Agreement or under law 18. Notices. All notices required by this Agreement shall be in writing and personally delivered or sent by certified mail, postage prepaid, return receipt requested to the following addresses: Notice to City shall be addressed as follows: CITY OF NATIONAL CITY Attn: City Manager 1243 National City Blvd National City, CA 91950 with copies to: 10 DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE CITY OF NATIONAL CITY Attn: City Attorney 1243 National City Blvd National City, CA 91950 Notice to Licensee shall be addressed as follows: xx ttk 416 Na# 1 City, CA 91950 Vutkli1 C.h Either Party may change the address stated herein by giving written notice to the other Party, and thereafter, notices shall be addressed and transmitted to the new address. All notices shall be deemed received on the earlier of the date that personal delivery is effected or the date shown on the return receipt. 19. Severability. If any terrn, condition, or covenant of this Agreement is declared or determined by any court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement shall not be affected, and the remaining provisions of the Agreement shall be read and construed without the invalid, void, or unenforceable provision(s). 20. No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement. 21. No Third Party Beneficiaries. The parties do not intend to create, and nothing in this Agreement shall be construed to create any benefit or right in any third party. 22. Action or Approval. Whenever action and/or approval by City is required under this Agreement, the City Manager of the City of National City, or his or her designee, may act on and/or approve such matter unless specifically provided otherwise, or unless the City Manager determines in his discretion that such action or approval requires referral to City Council for consideration. 23. Governing Law and Forum. This Agreement shall be construed in accordance with the laws and judicial decisions of the State of California, and venue or any legal or equitable action shall be in the state or federal courts of County of San Diego. 24. No Agency, Joint Venture, or Partnership. 11 DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE City and Licensee hereby renounce the existence of any form of agency relationship, joint venture, or partnership between City and Licensee, and agree that nothing contained herein or in any document executed in connection herewith shall be construed as creating any such relationship between City and Licensee. 25. Entire Agreement. The provisions of this Agreement comprise all of the terms, conditions, agreements and representations of the Parties, This Agreement may not be altered or amended, and no provision hereof may be waived, except by written agreement executed by the authorized representatives of the Parties. The Parties hereby agree that terms of this Agreement have not been changed, modified, or expanded by any oral agreements or representations entered into or made prior to or at the execution of this Agreement. 24. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument. Exhibit A Exhibit B Exhibit C Conditions of Approval Operating Procedures Safety and Security Plan [SIGNATURES ON FOLLOWING PAGE] DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates set forth below. CITY OF NATIONAL CITY, a municipal corporation By: Dated: -7167) 3 Attest: —DocuSigned by: --6lty tlC1el KG9.. Approved as to form (-00"7 j'eltm14— City Attorney 5212884.2 tAmr (MY (itce,4-41 XX, a LLC By: • Its: cAk CA4LN hu( Dated: 573 Z 3 DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE EXHIBIT A CONDITIONS OF APPROVAL General Conditions: 1. Licensee shall post clearly visible signs at all entrances and exits and at both on and off - site parking areas, requesting patrons to respect residents of adjacent residential neighborhoods by being quiet when leaving, reminding patrons of the existence of permit parking districts within the neighborhoods adjacent to the business, and that the consumption of cannabis in public areas is not permitted pursuant to state law. 2. A responsible person shall always be on the premises to act as manager and supervise employees during business hours. 3. The applicant shall comply with the applicable requirement of NCMC Title 12, Noise Control. Noise complaints shall be immediately addressed. 4. Odor generated by the Business shall not be detectable outside the Business to a person of normal olfactory sensitivities, including anywhere on adjacent property or public rights -of -way, or within any other unit located within the same building as the Business. An odor absorbing ventilation and exhaust system shall be installed so that odor generated within the Business is not detected outside of the Business. 5. Licensee shall proactively monitor and resolve any issues involving disturbances, loitering or ingestion of cannabis in parking lots or surrounding streets, sidewalks, and alleys. 6. Licensee shall provide law enforcement and all neighbors within one hundred feet of the Business with the name and phone number of an on -site community relations employee to notify if there are operational problems with the establishment. 7. Licensee shall employ a minimum of one (1) on -site security guards during all hours of operation.. All security guards employed by the Business shall be licensed and possess a valid Department of Consumer Affairs "Security Guard Card" at all times. In addition, any security guard employed by the Business or security firm retained by the Business must first be approved by the City's Chief of Police, in his or her reasonable discretion. Neighborhood security guard patrols shall be conducted every hour, for a two -block radius surrounding the Business during all hours of operation. 8. The Licensee shall not employ security guards armed with fireanns or Lasers. 9. Upon presentation of proper credentials by any Code Compliance or Law Enforcement Officer, the Licensee shall consent to entry of the place of business at all reasonable times to enforce the provisions of this Agreement or the NCMC. 10. On -site sales of alcohol or tobacco, and on -site consumption of alcohol or tobacco products by patrons prohibited. 11. All proposed structures must comply with zoning and building code regulations and pass all requisite inspections and receive all permits required under applicable law. 12. All cannabis waste must be stored in a secured location and properly disposed by a 14 DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE cannabis waste collector. 13. The on -site consumption of alcohol, tobacco or cannabis by employees of the Business is prohibited while such employees are working. DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan 2. DAILY OPERATIONS -THE BUSINESS PLAN SHOULD DESCRIBE THE DAY-TO-DAY OPERATIONS WHICH MEET INDUSTRY BEST PRACTICES FOR THE TYPE OF CANNABIS BUSINESS YOU ARE APPLYING. Mr, Nice Guy is applying to engage in three (3) types of commercial cannabis activities at its National City facility. Those activities are storefront retail (without delivery), distribution and manufacturing (infusions with packaging and labeling) to bring National City the greatest return on our investment. The sections below address each of these activities in turn. It will be our responsibility to ensure that Mr, Nice Guy is, always operating in a manner compliant with all applicable state and local laws, and any regulations promulgated thereunder and any specific, additional operating procedures or requirements which may be imposed as conditions of approval of the commercial cannabis business permit. NCMC §9.60,040 2.1 DESCRIBE THE DAY-TO-DAY OPERATIONS IF YOU ARE APPLYING FOR A RETAIL PERMIT. THIS SHOULD INCLUDE ATA MINIMUM THE FOLLOWING CRITERIA: Mr, Nice Guy utilizes Standard Operating Procedures ("SOPs") to ensure the day-to-day operations of our cannabis businesses unfold with compliant acuity. Our SOPs provide staff with the guidelines they need to be successful in their positions. Additionally, implementing uniform SOPs throughout our numerous operations give customers a sense of consistency and quality that they have come to expect from Mr. Nice Guy. Each of the SOPs identified below are already being used in each of our locations, and has been proven to be effective. To provide for ease of review, please see the chart below, which identifies the section each SOP can be found herein. Page limit restrictions prohibit the duplication of SOPs. Each of Mr. Nice Guy's owners play an integral role in the day-to-day operations of the company. Mr. Nice Guy's ownership team has always felt it is important to participate in the actual operations of the business, unlike many other applicants. Customers are always excited to meet Mike Ng, Mr, Nice Guy himself! Exhibit B As is explained in detail in Section E. Cannabis Experience, our founders Mike, Pat and Joe are all experienced cannabis business operators, Each will take on an executive level leadership role of Mr, Nice Guy in National City. 2.1.A. DESCRIBE CUSTOMER CHECK -IN PROCEDURES. Mr. Nice Guy stores strive to create a secure and safe environment while retaining an exterior display that is inviting. To maintain a safe and secure shopping experience for our customers, we will have a third -party security contractor providing security services for the premises. The scope of the contract we will have at our National City location will include personal security posted directly inside the building's public entrance, We have a long-standing relationship with PRIOR SERVICE SECURITY as that is whom we have enlisted to patrol our Lake Elsinore, California location, Post Alarm Systems who prepared Section D: Security Plan who have outlined the extent of our security measures in detail LEAF LOGIX POINT OF SALE AND CRM PLATFORM Leaf Logix has incorporated ID scanning technology into its point of sale products to support fast and accurate of data entry, while simultaneously fortifying compliance and security, When a customer enters the store, the front desk clerk scans their driver's license or other government ID into the platform within a microsecond. This instantaneous scan will drastically reduce wait time, verify the client's age, and ensure their ID is real, The ID scanning technology also queries the individual's visit history, identifying whether the customer has been previously banned them from the premises. Key Features of the Leaf Logix ID Scanner: e+o..vt.vmn eawa. rn.o. .%*1l Sm$dateCYhtt SnoringeeuMntlee C egeet fry demographic f a f Dana Has Sipe agreements andraven CaphueSfgeatores Coatom4o which data faun Otto to dial profiles *mare, eked t ualdatabass of Ayes Mel records *Amass: such as, 'imperil leyaY; to Innate noarity and edam* oilman eapetNnce hrtawmaeou sainting to a mfereseao d Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan Leal,,:,,. .. The data from this scan will be verified and retained in the CRM portion of our Leaf Logix system for up to one year. We will only accept DCC and National City -approved forms of identification, all of which clearly indicate the birth -date of individuals, and all staff will be trained on recognizing these forms of identification and possible signs of counterfeit or fraud. If a person is between the ages of 18 and 21, they must present a valid form of identification in addition to the correct physician's recommendation to be permitted entry, Individuals under the age of21 without a valid medical car will not be granted access to the establishment All physician recommendations are visually inspected for validity as well as verified online via the California Department of Public Health's Medical Marijuana Identification Card system. Individuals with valid identification who are over 21 but show an expired or otherwise invalid medical card will be allowed to purchase adult -use cannabis products only. A customer profile will be created from the information gathered at the reception area in the POS system. Including the customer's name, birth -date, address, photo, and whether they are adult -use or medicinal authorized, Medicinal d customers will have additional profile information, including the recommending physician name, address, license number, phone number, the customer's medical card number, Medical Marijuana ID Card (MMIC) if any, and their approved daily limit, All this information will be accessible to the sales representative in the retail sales area via the POS system for triple verification when the customer makes their purchase, CUSTOMER CHECK IN - STANDARD OPERATING PROCEDURE ROLE- Receptionist/ Budtender on rotation/Security TIMING - Ongoing - Anytime a customer enters the dispensary. PURPOSE -The check in process starts the moment a customer or patient opens the front door of your dispensary. It's imperative to have strict procedures around how (and where) customers are greeted, how they're checked in, when/how ID's and/or medical cards are verified, where they wait, and when they enter the store. Failing to properly manage the flow of customers and verify identity is a compliance and safety issue, and could result in fines, revocation of your license, and consumer safety concerns, This SOP details every step in the check in process, including ID/age/medical card verification, waiting room protocol, and how customers move throughout the store. PROCESS FOR GREETING CUSTOMERS/PATIENTS This process starts the moment a customer or patient enters your dispensary. ► Customer enters the dispensary. ► Receptionist verbally greets the customer within Immediately r If there is a line to check in, say "Welcome to the Marketplace by Mr. Nice Guy, my name is please step in line we will be with you momentarily' ► If there is no line, the customer steps up to receptionists' desk for check in, ► How did you hear about us? Receptionist records answer during the check in process. Found in the "customer source" section on the customer profile. Staff/Guard checksforvalid ID/Med card CHECK IN PROCESS USING Leaf Logix NUG device GREET APP This process starts the moment a recreational customer and/or medical patient is ready to be checked into the dispensary r Customer steps up to reception desk, ► Receptionist verbally greets the customer immediately and says, "Welcome to the Marketplace by Mr. Nice Guy my name is , please step in line we will be with you momentarily' ► Receptionist looks at the ID to verify age and authenticity ► At adult use cannabis Stores: Cannabis can only be purchased by customers aged 21 and older with valid ID. ► State purchase limits: Under current California regulations, stores can only sell 1 ounce of cannabis and 8 grams of concentrate daily to recreational customers, If customer asks where they can apply for Med card direct them to: Orange County, Health Care Agency, Public Health Services Office of Vital Records, Medical Marijuana Identification Card Program 200 W. Santa Ana Blvd., Suite 100-B Santa Ana, CA 92701 Monday - Friday, 8:00 am -12:00 pm, 1:00 pm - 4:00 pm (closed 12-1) Appointments must be scheduled in advance by calling 114.480.6717 r Receptionist then checks the customer in using 1 of 3 methods r Scan the ID barcode using the Nug scanner device (recommended) or use the camera to scan the ID barcode, o Hold the Nug 6-8 inches away from the barcode on the bottom of the back of the ID (look for the 2d/complex barcode), Click one of the side buttons on the Nug sled and scan the light over the barcode. o Click one of the side buttons on the Nug sled and scan the light over the barcode. Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan ► Listen for a beep and look to see that the customer's information loads on the screen. Note: If the Nug scanner is not functioning, tap the plus sign in the lower right corner of the screen. The camera will open with a white box over the screen, Center the white box over the 2D barcode to scan it, ► You will either see "Welcome Back" if they are a returning customer, or "New Customer" if they are new. (1) Recreational Customer name, date of birth, and Rec will automatically populate a new customer profile, ► Use "Look up customer profile" within Greet to search for an existing customer profile, ► Tap "Look up customer profile Select "REC" or "MED° Type in at least 3 characters to search for an existing customer. For the time being we will only be accepting "REC" customers, MED customers can shop but they have to check in as "REC" and will receive the same discount as the 21+ ► Cross reference the DOB on the customer's ID to verify it's the right profile and person. ► Once verified, tap into the customer profile, and select "Check in as REC Customer" to add them to the queue. ► Create a new customer profile manually, ► Tap the plus sign in the lower right corner of the screen, ► Tap "Create New Profile Manually.' ► Recreational Make sure "REC" is selected, Enter the customer's full legal name, state, and date of birth, ► Medical Tap "MED° enter the patient's full legal name, state of residence, date of birth, Med ID, and Med ID expiration, ► Select "Save & Check In' If the customer has been flagged as a potential risk to your dispensary in the past, you will be notified on the app. ► If the customer has been flagged as a potential risk to your dispensary in the past, you will be notified on the app, ► If the customer is new, or information has changed for a returning customer, edit their profile, and tap "Save" ► Ask if the customer would like to be added to our system to receive updates and brand specials, if yes add the customer's email to their customer profile ► Select the best option for customer sources at time of check in. (Where did they hear about Marketplace, use "customer source toggle" to select, "Weedmaps, Yelp, Sign Spinner, Weedmaps Banner, etc.) ► Add "Customer Groups" information (if applicable). Add veteran, student, senior citizen when 40% off promo is over. ► Check them in and add them to the queue. Recreational Tap "Check in as Rec Customer** "Medical" Tap - In the process of getting verified to accept, Medical Cannabis State ID holders to provide the extended limits and sales discount. If this group enters the store apologize that we are a 21+ adult use store which means all customers have a 1 oz flower limit and 8 grams concentrates.** If they still want to enter check them in as a regular recreational customer. Welcome them to the store and remind them about our 40%o discount. ► Receptionist tells the customer to wait in line until they are called by a budtender and directs their attention to the displays around the store, take this time to point out a personal favorite or new addition to the store. CHECK IN PROCESS USING A TABLET/DESKTOP This process outlines how to check in a recreational customer and/or medical patient in Leaf Logix on a desktop or tablet. ► Customer steps up to reception desk. ► Receptionist verbally greets the customer immediately and says, "Welcome to the Marketplace by Mr. Nice Guy my name is please step in line and we will be with you momentarily° ► Recreational Customer hands receptionist their state -specific approved identification information Acceptable forms of identification: CA state ID, Driver's License, US or other Government issued passport, passport ID or Military ID - that includes date of birth and picture.) ► Guard/ Receptionist looks at the IDlmed card to verify age and authenticity. ► Guard/ Receptionist Togs into Cashier APP using their Leaf Logix username/password (if not already logged in), There are three options of checking in the customer.' ► If the customer is returning and has an existing profile, use the "Find by name" feature in the upper left corner. Search using the customer's legal name. Verify it's the correct profile by cross referencing the date of birth on the customer's ID. Click "Check In" to add them to the queue, ► If the customer is new, click "New Profile" in the lower left-hand corner, ► Recreational Select "Create New Profile" under "Rec Customer Add their full legal name, date of birth, state information, ► Medical Select"Create New Profile" under"Med Customer;' Add theirfull legal name, date of birth, state and Med Card info, ► Click "Save & Check In" to add them to the queue. ► Recreational Only -Use "Guest Checkout" to sell to a recreational customer without inputting their information. Verify their ID before selling, Proprietary & Confidential Information of Mr Nice Guy National City, LLC. Not for Pubtication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan CUSTOMER MOVEMENT PROCESS This process outlines how customers/patients go from check in to transaction, including where they wait, r After completing check in, the receptionisttellsthe customer/patient whereto wait in line. ► The customer/patient must stay within the waiting line. ► The customer/patient is only able to access the line and the point of sale after being checked in. The customer/patient must wait to be called back before entering. ORDER AHEAD PROCESS (not yet implemented - until Weedmaps updates) This process outlines how to check in customers/patients who are picking up and paying for orders made ahead of time, Weedmaps is integrated with Leaf Logix and this process can be done via the Cashier app once fully connected, Add the Cashier App on the IPAD and keep the window open so the front desk staff can see notifications, r Make sure that the order is in the "Ready" column within Leaf Logix Cashier.You will not be able to pair a customer with an order that isn't ready. ► Follow the typical greeting, new customer set up, and Mimed card verification steps as customers/patients arrive. ► Instead of checking in the customer/patient as you normally would, select "Order Pick Up' ► Find the customer/patient's name in the list of orders, selecttheir name, and select "Check in Order ► You'll be directed back to the main queue and will see the name at the top that reads "Order Pick Up;' The order is now paired. ► The next available budtender will meet the customer/patient, take them back to the terminal, and process the transaction as usual, including adding specials. MANAGING THE QUEUE PROCESS ► Once a customer/patient is checked in, their name automatically appears in the list of checked in customers, called the queue, on the main screen of Leaf Logix. Note: Order ahead customers/patients always go to the top of the queue. ► To edit a customerlpatient, selecttheir name. This directs you to their profile. Update the applicable information, or add customer notes or flags, and "Save To remove a customer/patient from the queue: ► Select their name. This directs you to their profile. Choose "Remove from Queue To remove the customer from the queue view, slide your finger across a customer's name in the queue to the left. This gives two options: "Left Store" and "Flag;' Select "Left Store" to indicate that the customer/patient has left and should no longer be in the queue. ► Select a reason why the customer/patient left the store, If "Other" is selected, a text box will appear. Describe the reason, Tap "Remove;' ► Customers/patients will be automatically removed from the queue once they start building their cart with a budtender, DEFINITIONS Equipment; Computer and/or Leaf Logix Nug mobile scanner with Greet app Leaf Logix account and login information Banned Customers; Those that are not permitted in the store Flagged Customers; Incident based and up to Manager's discretion.' flag = banned Always leave notes in the customer's profile. If applicable leave the names of people involved plus the time and place of the incident. Greet = a mobile app on Leaf Logix's mobile Nug scanner device that allows you to scan the barcode on state -issued identification to automatically and compliantly verify age and check in customers. Order ahead = The act of placing your dispensary order ahead of time, often through websites orapps, Some dispensaries allow customers/patients to call or email with their orders, though this is much harder to track and manage. The benefit of order ahead is customers can choose their products from the comfort of their own homes and drive to yoru dispensary when it's ready, minimizing their time spent in the store. The benefit to dispensaries is the ability to prepare orders as time allows rather than always working reactively on a full queue of people waiting in person. MMiC = Medical Marijuana Identification Card,' The MMiC identifies the cardholder as a person protected under the provisions of proposition 215 (the compassionate use act, 1996) and senate bill99 (chapter27, statutes of 2017). It is used to help law enforcement identify the card holder as being able to legally possess certain amounts to medical cannabis under specific conditions. NUG Device = Nug is the cannabis industry's first mobile check -in and inventory management device with built-in applications designed to save time and keep you compliant. Queue = All customers/patients who have been checked in will show here. You can see the customer's name, state, age, and wait time from the queue. Locate and Manage Your Customer Queue: To locate and manage the queue, select "Cashier" from the left sidebar navigation. On the right hand side, you will see the "Customer Queue." Lost and Found Customers; Those that left their belongings on last visit. Personal documents - Drivers license, Passport, keys, purse, bags etc. (immediately taken to the vault and placed in the safe,) Other items - left in a box at the receptionist desk, if the name of the owner is known place a post it on the belonging with the persons name on the front of the item.) Proprietary & Confidential Information of Mr. Nice Guy National City, LLC Not for Publication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan CUSTOMER ASSISTANCE CHECKOUT STANDARD OPERATING PROCEDURE ROLE - Sales Associates/Budtenders TIMING - Ongoing - Anytime a customer shops and transacts at your dispensary, PURPOSE - The c process starts the moment a customer or patient enters the bud room in your dispensary. This is the time when budtenders provide education, recommend products, and eventually process the transaction for the customer. Properly managing customers and the check out process is important for customer experience, but also for compliance, including proper handling of cash and cannabis products, Failing to managing customers according to your state regulations could result in fines, audits, or closure. This SOP details every step in the check out or transaction process, including helping customers make selections, adding products to the customer cart, processing transactions, including debit payments, fulfilling orders, and how customers exit, PROCESS FOR HELPING CUSTOMERS/PATIENTS This process outlines how budtenders approach customers/patients, and how they help choose products to purchase, ► Customer enters the bud room, Check in with front and then receptionist will direct customer to line, ► Budtender greets the customer by name, Budtender checks customer ID as a second safeguard and to ensure you're helping the right customer. ► Budtender asks the customer what brings them in today, if they are looking for something specific, or what effect they are hoping to achieve. Budtender uses opening line "Hi my name is how can I help you today?', Also ask customer how they heard about Marketplace before customer starts their ordering, ► Depending on customer: > If the customer knows exactly what they want, the budtender can move to the process of adding to the cart, fulfilling the order, and processing the transaction, ► If the customer needs help, the budtender answers questions, provides guidance, and moves forward with the check out process when and if the customer is ready to make decisions, ► If the customer has an idea of what they like, but is open to suggestions, the budtender may steer them toward specific products or introduce them to new brands/options, PROCESS FOR ADDING PRODUCTS TO A CUSTOMER CART This process outlines how to add specific items to the customers' cart in Flowhub, ► The customer chooses the products they want to purchase. ► Budtender opens Flowhub and selects the customer from the customer queue to open the cart. ► Budtender adds all desired products and quantities to the customer's cart, ► Budtender will scan each product not lookup ► Bring each product individually and turn your back away from products. (Reduces chances of something happening to products) ► Customers aren't allowed to touch products but are allowed to touch hardware ie bongs, pipes, and etc. ► Budtender watches the cannabis purchase counter and advises customers if they have selected too many items. Budtender may offer up -sell options at this point. Budtender will go over HOW TO PROCESS TRANSACTIONS This process outlines how to process transactions in Flowhub, take customer money, and give correct change back. Once all products/items have been added to the cart, budtender will complete the transaction: ► Before starting the transaction, confirm all products in the cart with the customer by reading them back, Make edits to the cart if applicable. ► Verify all relevant specials applied. If the customer or order qualifies for an inline discount, add the code in the panel on the right side of the screen, Verify with manager if discount has to be manually input. ► Select the button to Checkout at the bottom of the right sidebar, ► Select payment method and the total amount given, ► Budtender gives option to pay with card or cash ► Tell customer how round up of total works when paying with card ► Press button on flowhub that starts transaction, type in actual amount of transaction, ► Hit "Next" button ' Continue to price breakdown ► Customer then enters pin and confirms. (If customer pays with cash make sure to show breakdown of transaction) ► If customer is paying with card, receipt will be printed out if payment was accepted or declined. ► Get last four digits from receipt to complete transaction if payment was approved ► Enter your Flowhub PIN, and complete the transaction. ► Exit labels and a receipt will print. The cash drawer will open. Give change and the receipt to the customer, if applicable, Always double -count change to ensure accuracy, once when you remove the money from the drawer, and once as you count the change back to the customer. Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not (or Publication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan PROCESS FOR FULFILLING ORDERS This process outlines how to fulfill an order and ensure the customerlpatient receives the products (in exact amounts) that they wanted and paid for, ► Budtender collects all products in the customers' order. ► Budtender affixes exit labels to all cannabis products. Sticker should not obstruct labels on any of the labels of the product ► Place all products into an exit bag. Place business card on bag as well ► Hand the exit bag to the customer. ► Thank the customer, ► Point customers toward the exit door. EQUIPMENT Computer, laptop, or tablet (your terminals) Cash drawer Flowhub account and login information Barcode scanner, if applicable Scale, if applicable Receipt printer Debit card terminal, if applicable Secure packaging/bags (within state guidelines) DEFINITIONS Transaction = the process of buying or selling something. Debit card processing = the process of buying something and paying with a debit card. Debit cards are considered legal tender for dispensaries, though credit cards are prohibited due to the federal illegality of cannabis. Learn more in this dispensary payments guide. Exit labels = the labeling required for cannabis products. Exit label requirements vary by market, Exit bag = all states require secure packaging for products. A child -proof container may be sufficient, and any products not in child -proof containers must be in secure exit bags. Be sure to understand your market's requirements around secure packaging. B. IDENTIFY LOCATION AND PROCEDURES FOR RECEIVING DELIVERIES DURING BUSINESS HOURS. To provide the greatest amount of safety for our customers and vendors, we have a dedicated vendor entrance at the rear of our Facility as indicated on our premises diagram. Whenever we are notified of new product deliveries from a third party to Mr. Nice Guy's locations, our fulfillment manager immediately reviews the invoice presented by the distribution driver to ensure delivery accuracy. We also ensure that all staff members who are assigned to assist in the receipt of these goods have been fully trained in the rules and regulations pertinent to transportation compliance, and even train staff to be cognizant of anything which might indicate any violations of the law, and report immediately any suspicious activity to management or the police as appropriate. All cannabis wholesale deliveries occur during regular business hours, and transportation schedules will be staggered to decrease the risk of crime against vendors and employees, such that those with malintent cannot ascertain the departure time of a specific product type. Product intake is the dedicated responsibility ofa single Manager. We also employ two additional managers designated and trained as alternative receiving managers to overcome instances of absences or turnover. The Receiving Manager identifies, verifies, and clears transportation personnel before entering the facility and transfer area, All packaging and labeling of products received will be cross-referenced with the information in the METRO track -and -trace software system to ensure it is as intended, adequately accounted for, and passed testing. The aManager is responsible for accounting for all products received by checking the physical product invoice and inputting all delivered products into the track -and -trace software. We have specific SOPs for the Leaf Logix system that include screen shots of the exact steps for our staff to follow, One such example is the SOP for accepting product in Leaf Logix, shown below, Proprietary & Confidential Information of Mr Nice Guy National City, LLC. Not for Publication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan Accepting Orders on Leaflogix (Steps to be followed after order has been accepted on metrc) o Log into Leaflogix backend, o On the left-hand side, click Products>inventory (both highlighted in yellow). o Click blue "Receive Inventory" button on top right, . Leaf Log, rnrrHa )' o Pending Transfers will give you a drop down of manifests accepted on METRC and the date ( Garden of Weeden as an example) Once you selected manifest you want to add to your inventory, you will see items on that manifest show up atthe bottom (highlighted in yellow), All items with a red exclamation point on the felt -hand side has not been attached toa product in your Inventory, a Receive Inventory 211.11>021 ...gin_ • ® NMI — ®® eseama Omit.o+ Vw Fields required on this page Pending Transfers Vendor: Name on the metrc manifest Room: All items sold to customers need to be placed in backstock until labeled and readyforsales ADDING ITEM TO PRODUCT NAME To provide the greatest amount of safety for our customers and vendors, we have a dedicated vendor entrance atthe rear of our Facility as indicated on our premises diagram. OK Create Prntluc: Rossi Raao.* At! fields with () are required in order to receive an item on Leaflogix Product: Search product you would like to attach this item to. If item is new, hit the "CREATE PRODUCT" on the bottom left (see next step). Quantity: This number should NEVER be changed. When receiving product, it will automatically input the quantity that is on metrc for that specific tag, Vendor: This field should automatically be filled when you attach a product name to the item (if not, select vendor according to metrc manifest). Room: Select what room you would like items to go into (all products being sold to customers should go into "BACKSTOCK" until labeled and are ready for salesfloor) Package ID: this is the barcode that employees will scan when ringing out an item (to avoid duplicate barcodes, use last 7 digits of each items External package ID) External Package ID is Metrc tag belonging to item and should NEVER be changed If changed, teaflogix will not let you sell cannabis product through POS. Expiration Date: This field needs to be filled out for all edibles being added. Cost per Unit: Ensure thatthe cost per unit is the same asyou are being invoiced by vendor. Price per Unit: Ensure thatthe price is correct according to your stores mark up, Once all fields have been filled out, click blue "OK" button at the bottom of the page. Required fields when creating a product All fields with (*) are required in order to create an item on Leaflogix Proprietary & Confidential information of Mr, Nice Guy National City. LLC. Not for Publication Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan ► Name; Always use name given to you on order PO provided by Alex, ► SKU: you can generate a number (this Is number used to search item on Product catalog). ► Category: Select product type and product weight ► Master Category: This will automatically be filled when selecting "Category" ► Type: Ensure that this is ALWAYS "quantity': If not, you will have issues will ringing items out on POS. ► Default Unit: Ensure that this is ALWAYS "quantity': If not, you will have issues when ringing items out on POS. ► Cannabis Product; This will always be yes when adding a metrc manifest, ► Grams/Concentration: total weight of product per unit, (Note: if edible, ensure that it is .1). Yes ► Price: using the cost of the item and correct mark up for your store. ► Cost: cost per unit listed on invoice provided by vendor. ► Vendor; this should be vendor that is manifesting order through metro, ► Brand; product brand After attaching the manifest item to a product name on your inventory, you will see the red exclamation point disappear (highlighted in yellow below), ► Repeat steps on "adding items to product name" until you have completed the order manifest (there should be no red exclamation points visible when completed). ► Once all items have been added, the receive button below (highlighted in green) will then turn blue, ► Click the blue "Receive" button. Items are now in your inventory, We also have a process for vendor coordination to ensure the least disruption to our business operations. VENDOR COORDINATOR SOP Purpose: To establish a system of communication that will be shared by the Vendor Coordinator, Management and Cannabis Companies. This SOP is intended to create expectations and limits within the relationship to ensure a successful experience. VENDOR COORDINATING ► Before the appointment verify if the vendor is having a promo or offering product specials on the day of their visit. It is the responsibility of the Vendor Coordinator to plan and communicate with Management ahead of CAD appointment to ensure all items are already entered in our inventory prior to CAD, The Vendor coordinator will communicate with the MOD to ensure all promotions are correctly inventoried and placed in the Showroom to be readily available during the CAD. ► To be fully prepared the vendor coordinator will then ask how vendor would like to calculate the breakdown of items sold for the day. For example: tally, receipt print out when customer buys, time breakdown of product/brand/item sold during CAD ► Vendor arrives the day of appointment, ► Vendor will check in with front desk receptionist or security guard ► Receptionist or security guard will then notify vendor coordinator about vendors arrival, ► Make sure that vendor is following their appointment and is there at their respective date and time, ► Vendor coordinator will then direct vendor to proper location in showroom to setup display. ► If only one vendor is scheduled for the day, have them setup in waiting area, If there is more than one vendor scheduled for the day, have them setup behind barrier of customer line facing customers. ► Vendor coordinator will then welcome them to the store and show them the restroom. ► Vendor coordinator will double check with management about promotional products that need to be on the floor if needed, Also remind staff about brands promotion. ► Vendor coordinator will then have receptionist and security guard mention to customers about vendor deal and where vendor is setup. This encourages customer to go up to booth to learn about products. Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan CUSTOMER APPRECIATION DAY TIPS ► Prepare a monthly calendar for all CADS and Vendor Education appointments. Marketplace would like to have between 1 and 3 CADs a day. ► When scheduling be sure to not overlap the same categories in the same day, (ex. We should not have 2 vape, gummy or flower companies at the same time,) ► Contact vendor at least 3 days in advance of scheduled CAD to confirm appointment and any items we need to have prepared when the Vendor arrives for CAD. ► At the time of setting the appointment, remind vendor that we will not be providing a table or any assistance with setup, ► Organize appointments on outlook calendar and copy to the dry erase board in break room so Vendor Coordinator, Managers and Budtenders can stay up to date, ► Vendor and staff conversations must be kept to a minimum, any work duties will be a priority during CADs. It is acceptable to check in with the representative throughout their stay to make sure all expectations are met, ► Encourage the Vendor to post about our store on the companies Instagram or Facebook account to increase awareness, ► Stay away from phrases like, "BOLO" "Promo, "Raffle" ► Instead use words like, "Demo" "In house special" or "Customer Appreciation Deal" ► Always include in caption that we are an Adult Use Dispensary, this post is intended for those 21+ years of age no exception, IN STORE BRAND SALES REPRESENTATIVE DROP IN If a company that we carry in store sends a sales representative or brand ambassador to check in on how their products are doing and they do not have an appointment, follow steps below, ► Always put the customer first, ► Have the Brand Representative wait in the waiting area while you tend to customers ► Once customers have been helped, proceed to help CAD vendor. ► Have a pen and paper available to take down information/notes, ► Pass any information about Vendor Sales Reps concerns or questions to MOD. ► Pass any information about new products to Purchasing Manager ► If the Sales Representative or Brand Ambassador inquiries about changes to display, buying a display, or anything involving merchandise, redirect them to Management, OUTSIDE BRAND SALES REPRESENTATIVE WALK IN ► If the Vendor Coordinator is available welcome them to the store and accept any marketing materials, they may have. (Free products can never be given without a manifest and should only be given to a MANAGER), Remember to make customers a priority before you help, Collect vendor contact information and give to PURCHASING MANAGER, the MNG Enterprise central buyers contact information so they can plan their own sales conversation, Definitions CAD; Customer Appreciation Day Vendor; Companies that send a representative to promote and educate our customers during the CAD, Central Buyer; MNG Enterprise buyer for all locations, Alex Wong: 949-531-1103 Manifest: A sales order that is processed through track and trace and entered in our inventory point ofsale system, Sales Representative' The point of contact for cannabis companies Brand Ambassador; A representative of the company sent to educate and promote their products during CADs, Does not create or complete sales, Don'ts; Never accept free cannabis products! Whether it is a brand already sold in the store ora brand new one, it is against State and company guidelines to accept cannabis products withouta manifest, even ifitis a penny, Proprietary & Confidential Information of Mr. Nice Guy National City, LLC Not for Publication. Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE alb SECTION A: Business Plan C. IDENTIFY THE NAME OF THE POINT -OF -SALE SYSTEM TO BE USED AND THE NUMBER OF POINT -OF -SALE LOCATIONS. Mr. Nice Guy National City will have six { POS locations in the retail sales area stationed at the counters as reflected on our Premises Diagram, We determined that we need these six systems based on our experience that we will require one budtender for every 7 transactions per hour. 0n average we transact approximately 28,5 sales per hour. Therefore, we estimate that we will need at least 4 POS terminals for average customer flow, However, we know that customer count can truly surge during peak hours from 4:00 to 8:00 pm and on the weekends. As such, we install two additional POS systems in our dispensary to ensure that no customer is left waiting. Mr, Nice Guy facilities run on the Leaf Logix point -of -sale ("POS") system, a best -in -class cannabis POS product designed to meet the needs of the most sophisticated operators in the industry. With an easy -to -use system built on Microsofttechnology, our team can on -board staff and new procedures for existing staff seamlessly. This software also is customized to our proprietary workflows coupled with a fast and functional user experience that tracks and coordinates everything to ensure it is as easy for our staff to adhere to our strict compliance standards. As a full -vertical solutions provider, Leaf Logix was an obvious choice for Mr. Nice Guy's multi -state, multi -faceted operations, The tools offered by Leaf Logix help our business manage operations, stay compliant, and maximize efficiency and profits at every point in the supply chain, while the user-friendly cannabis POS facilitates customer conversion and optimizes sales while automating compliance. POINT MALE FEATURES SUPERB GUEST UST MANAGEMENT EASY RETURNS AND PRE-ORDEAS LOYALTY AND DISCOUNT PROGRAMS AUTOMATIC LABEL CREATION AND PRIMING DETAILED SALES REPORTING AND ANA MEG: HISTORY BYPRODUCT/CUSTUMER DEDICATED REGISTER AND EMPLOYEE LOGiNS PATENT CHEERIO & CUSTOMER PROFILES CUSTOMER VERIFICATION VIA III SCAN PURCHASE LIMNS & PURCHASE UNIT ALERTING ERTENSIVEUSER PERMISSIONS AND PERMISSION MANAGEMENT SIMPLIFIED TRACK & TRACE REPORTING ROBUSTINTEGRA110NS Leaf Logix not only listed as a California's Track -and -Trace System, METRC approved platform interface ("API"), but it also integrates seamlessly with dozens of third party platforms used by the cannabis industry, including: dutchie ^�u ENLIGHTEN .ry Ei�N-EN Mirk .0., Leafly. 2f Ieaflink %Jane ®OUTLAW TECHNOLOGY o6metrC CanPay IIITRL weedmaps We have several Leaf Logix specific SOPs to ensure that our staff is properly trained and the operations within and amongst our several facilities run smoothly, Some of these, for example, are Accepting Orders on LeafLogix Required Fields How to Close Out a Register How to Obtain a Close Out Report for All Registers How to Obtain Sales Totals for Registers How to Obtain a Sales Snapshot How to Pull Reports to Help Restock Inventory and Reorder Product How to Return a Defective Item How to Void a Transaction Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Point -of -Sale System DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail SECTION A: Business Plan D. ESTIMATE THE NUMBER OF CUSTOMERS TO BE SERVED PER HOUR/DAY. Mr. Nice Guy will be open from 9:00 am to 9:00 pm Sunday to Saturday per NCMC 9.60,250.G, We anticipate initially serving 300 customers per day and increasing that number byloo customers per day, annually. We sincerely believe that Mr, Nice Guy National City will be a top grossing dispensary, but for purposes of this application, we used moderate, attainable numbers, For example, our dispensaries in Santa Ana, where there are 30 stores located within the facility, each see 500-700 customers each day per store. The Facility is located just off the 5 freeway at Harbor and Civic Center Drive, two major thoroughfares in National City, making Mr. Nice Guy easily accessible to street traffic, Mr. Nice Guy National City has ample parking. Although the City requirement for our Facility requires a minimum of one parking space per 250 square feet of retail usage and one parking space per 1,000 square feet of industrial/manufacturing usage, for a total of five (5) off street parking spaces, the parking lot of our Facility can accommodate parking for 19 vehicles, with 2 handicapped parking spaces. The Facility is also just a short walk from the 8th street bus stop, which services the Blue Line in National City. Please see Section F: Neighborhood Compatibility for more detailed information about our proximity to public transportation and ways we support our employees in taking more sustainable means of transportation to work, along with bus pass and Lime scooter ride incentives, Given this proximity to the major freeways, public transport, and large parking area, we expect our National City location to perform according to the schedule below. Year 1: 300 customers per day112 hours open = 25 customers per hour Year 2: 400 customers per day 112 hours open = 33 customers per hour Year 1 500 customers per dayll2 hours open = 41 customers per hour D. DESCRIBE THE PROPOSED PRODUCT LINE TO BE SOLD AND ESTIMATE THE PERCENTAGE OF SALES OF FLOWER AND MANUFACTURED PRODUCTS. Mr. Nice Guy has the luxury of using current sales data to determine the proper product mix consumers actually purchase. Based on our retail sales across six (6) dispensaries last year, one of which we recently sold, the product mix is as follows: FLOWER 50% CONCENTRATES 30% EDIBLES 18% ACCESSORIES 2•%• Our data is in line with industry -wide reporting, as published by New Frontier Data. According to New Frontier Data, California's legal market has evolved dramatically since adult -use sales began in 2018, Flower has lost 31% of its share of market, falling from over 50% of the products sold in 2018 to 35% by the end of 2021, Conversely, prerolls have seen the greatest share increase, jumping threefold from 3% to 11% over the same period. Edibles have also seen strong gains, nearly doubling from 9% to 17%. Vapes are the one category whose market position has remained unchanged, with share increasing two percent -age points, 25% to 27%, which indicates that the ways in which vapes are consumed relative to other products has remained quite consistent. It is important to note that the New Frontier data separates prerolls from flower, whereas our data is combined. When examining the two, New Frontier reports 46% market share by flower and prerolls combined, 34% market share for concentrates, 17% for edibles and no reporting was made for paraphernalia. However, in all, we are essentially within the same margin as reported for California retail sales state-wide, C,IiFomia: Monthly Shore of Product Salo. ;IT • I Irn..•. • I'dtd • I ,:r,.,s Proprietary & Confidential Information of Mr. Nice Guy National City, LLC Not for Publication. Product Line DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan Mr. Nice Guy only purchases products from California -licensed growers, manufacturers, and distributors, Before any purchases are made, we ensure that the vendor possesses all the necessary licenses to operate in the state of California, We then examine samples of their products to verify that they are in compliance with all regulations. If we decide to proceed with this vendor, we will then write a purchase order, When products are received, they must be accompanied by a Certificate of Analysis (COA), a packing slip, a METRC manifest, and an invoice that matches our original purchase order. All information on the physical package must match the information on the corresponding COA, If any of these items are missing or inaccurate at the time of delivery, we reject them, We have existing relationships with many vendors. Some letters from them attesting to our relationship: HENRY'S OHIGrNAi. To whom it maycencerm My earns is Hoidl Adams and tam theChief Growth Officer for Henry's Original Wa are a. vertically integrated cannabis company centralired in the heart of Mendocino County, California, Weopente on multiple family fauns throughout thecourfty, process all of our own products anti distribute throughout the state. We make deliveries mutt role times a week in all territories Mr. Nice Guy hos boon a key account of ours !provevayear, consistently prating orders and making good on payments due. They aro in good standing and considered en Ae actounton our end We as evendor are committed ro providing 100%of oar menu offering to serve th4 National Gty community if a license isgranted on their behalf Thank you for your time and consideration If there are any quostionaor mere information I Gn provide, please do not hesitate to reach out Sincerely. Heidi Adams Chief Growth Officer Henry'sOriginal 91 t714) 717.0424 E: heidid heorysotlglndLcom AUREUS DHS Mr. Nice Guys 730E Oyer Rd. Santa Ana, CA 92705 to Mr. Nice Guys, This IS a recommendation, etter from Au re0 , 0115 LLC Morel for Mr. Nice Guys, with whom we have been working with over the last year. Oor business with Mr Nice Guys expands over multiple ttaatium currently with plans for mare. What started as a distributor and reteler relationship, Mr. Nice Guys has goickly become a truted partner for Aureus (Rove(, Their customer account with us has always been In good. standing, and their organisation exemplifies professionalism In every respect. I would Ike to Specifically thank Mr. Nke Guy's for offering our Rove custonxfs a 10p notch cannabis retad experience. We at Aureus loovel are extremely satisfied with the partnership we have built vvirh Mr, Nice Guys, and are looking forward to our continued future business with them, Best Regards, gout clatkJe Paul Jacobsen President Aureus LLC dba Rove MR NICE GUY's currently operating stores, we carry more than 40-50 trusted and well-known cannabis brands, Our top ten most popular selling brands are: AUTUMN BRANDS HENRY'S' O41G1I4N BIG TREE A., l4ll'IIt,60lii tIteed tv HERBL KIVA 1010 Select \4\6,YLD (iiii the design Before we place any cannabis products on our shelves, the supplier and the goods both undergo rigorous quality assurance screening. Some of these considerations are: How is the product grown? How are pests controlled? What pesticides are used? How natural/organic is the product? How large is the cultivation space? What sanitation efforts are in place for edible manufacturing? Where do ingredients come from? What extraction methods are used? Who will the distributor be? Do they have temperature-controlled/humidity-controlled storage space as well as vans/delivery vehicles? Haw is the product packaged? What are other quality control measures in place? What other stores are products sold in? How have sales and reviews been? Is there any additional information to be provided about the product? Proprietary & Confidential Information of Mr. Nice Guy National city, LLC. Not for Publication: Product Line DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail SECTION A: Business Plan In meeting with vendors and discussing the product, we get a much better sense of what the vendor knows and their confidence in their product. We will examine online customer reviews of the items to determine the relative demand for each product and whether the goods meet our quality standards. To further support National City, we will purchase cannabis products from local businesses operating within the City. We will prioritize contracts with vendors that are local, more organic/natural in the cultivation and manufacturing processes, Mr. Nice Guy offers a wide variety of cannabis goods, including edibles, concentrates, vape, flower, pre -rolls, topicals making it one of the most expansive product offerings at any retail location in California, In line with this, Mr, Nice Guy is excited for the California Department of Food and Agriculture's "local" program. The OCaI program will launch this year and be a standardized and legitimate way for cultivators to certify organic product providers. The creation of this program will be beneficial to us in identifying organic/natural product providers. Once in effect, we will phase in more of these standardized organic/natural products into our offering. Until then, we will rely on our selection process noted above. When the product is delivered to us, the inspection we perform is crucial in the continued assurance of quality. Our process includes a visual inspection of the product for any damage or degradation, any molds or fungi, and checking the expiration date on the packaging. We also review the track -and -trace records, and the history is reviewed for errors or omissions that may undermine the integrity of the product. As stated previously, preference will be given to smaller -scale cultivators to the maximum extent possible. In the vetting process of suppliers, we will search the records of CalCannabis, which is the state's cultivation licensing branch, for all small cultivation licenses and narrow it down to those within the city of Guadalupe. These "craft" cultivators will make up 30-50% of our flower supply in store. We will continue to vet manufacturers we do business with and prioritize those that manufacture products from the flower of small-scale cultivators, Asa last prong in our product quality control, customers will be encouraged to report any problems they experience with products in-store and online forums. Either within the exit packaging or printed on the exit packaging itself, we will have information that will enable the consumer to report a product issue, Whether that be to us directly or if they leave a review on the Weedmaps platform or our website. Mr. Nice Guy is known for having one of the most expansive menus in a California retail establishment. 0n average, our two Santa Ana locations carry 1,000 skus at any given time and our Lake Elsinore store carriers the same. Our 23 Oregon stores similarly carry 500-700 skus on average. A.2.F. IF PROPOSED, DESCRIBE DELIVERY SERVICE PROCEDURES, NUMBER OF VEHICLES AND PRODUCT SECURITY DURING TRANSPORTATION. Mr. Nice Guy does not engage in retail delivery operations at this time and is not seeking to engage in retail delivery in National City at this time. Should Mr. Nice Guy decide to add delivery to its existing operations, it will do so only with the approval of the City Manager and pursuant to an amended Development Agreement. Notwithstanding, we understand that those most in need of cannabis and compassion are disabled or unable to make it to a storefront. Many seniors rely on Meals on Wheels for example. To that end, we are exploring ways to potentially offer limited delivery services to those most in need. For Development Agreement purposes, this application and all financial projections herein, we would prefer not to commit to delivery services. In the event that we do engage in delivery, our delivery driver staff will adhere to the following SOPS: DELIVERY PROCEDURES [19 CCR §§15415,15418 and 154201 ► All deliveries of cannabis goods will be made by a W-2 employee of Mr. Nice Guy, directly employed by Mr. Nice Guy (not employed by a third party delivery service or software platform). ► Each delivery employee must be at least 21 years of age. ► All deliveries of cannabis goods shall be made in person. A delivery of cannabis goods shall not be made through the use of an unmanned vehicle. ► The process of delivery begins when the delivery employee leaves the Mr. Nice Guy dispensary with the cannabis goods for delivery. The process of delivering ends when the delivery employee returns to the Mr. Nice Guy dispensary after delivering the cannabis goods, or attempting to deliver cannabis goods, to the customer(s). During the process of delivery, the delivery employee may not engage in any activities except for cannabis goods delivery and necessary rest, fuel, or vehicle repair stops. ► A delivery employee may only carry cannabis goods in the delivery vehicle and may only perform deliveries for Mr, Nice Guy during that particular delivery and shift. ► A delivery employee must depart and return to the same licensed premises before taking possession of any cannabis goods from another licensee to perform deliveries. ► All Mr, Nice Guy delivery employees shall, during deliveries, carry a copy of Mr, Nice Guy' current license, the employee's government -issued identification, and an identification badge provided by the Mr. Nice Guy in a format similar to that which is depicted in the Employee Badges section of this application. Prior to providing cannabis goods to a customer, a delivery employee shall confirm the identity and age of the delivery customer and ensure that all cannabis goods sold comply with packaging, labeling and exit packaging requirements then in effect' Proprietary & Confidential information of Mc Nice Guy National City, LLC. Not for Publication. Delivery Service Procedures DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan Mr. Nice Guy will maintain an accurate list of the delivery employees and provide the same to the BCC upon request. Mr. Nice Guy delivery employees shall not carry cannabis goods in the delivery vehicle with a value in excess of $5,000 at any time. The value of cannabis goods shall be determined using the current retail price of all cannabis goods carried by, or within the delivery vehicle of, the delivery employee. The value of cannabis goads carried in the delivery vehicle for which a delivery order was not received and processed by Mr, Nice Guy prior to the delivery employee departing from the dispensary may not exceed $3,000, The Mr, Nice Guy delivery employee will only leave the dispensary with cannabis goods if at least one delivery order has already been placed by a customer with Mr. Nice Guy. Before leaving the dispensary, the Mr. Nice Guy delivery driver must have a delivery inventory ledger of all cannabis goods provided to the delivery driver. For each cannabis good, the delivery inventory ledger shall include the type of good, the brand, the retail value, the track and trace identifier, and the weight, volume or other accurate measure of the cannabis good. All cannabis goods prepared for an orderthatwas received and processed by Mr. Nice Guy prior to the delivery driver's departure from the licensed premises must be clearly identified on the inventory ledger. After each customer delivery, the delivery inventory ledger must be updated to reflect the current inventory in possession af the delivery driver, Delivery inventory ledgers will be maintained electronically. The Mr, Nice Guy delivery driver shall maintain a log that includes all stops from the time the delivery driver leaves the dispensary to the time that the delivery driver returns to the dispensary, and the reason for each stop. The log shall be turned in to the Mr. Nice Guy when the delivery driver returns to the licensed premises. Mr. Nice Guy shall maintain the log as a commercial cannabis activity record, The log may be maintained electronically. Prior to arrival at any delivery location, Mr. Nice Guy must have received a delivery request from the customer and provided the delivery request receipt to the Mr. Nice Guy delivery driver electronically or in hard copy. The delivery request receipt provided to the delivery driver shall contain all of the following information: The name and address of Mr. Nice Guy dispensary The first name and employee number of the Mr. Nice Guy delivery employee who delivered the order The first name and employee number of the Mr, Nice Guy employee who prepared the order The first name of the customer and an Mr. Nice Guy -assigned customer numberforthe person who requested the delivery The date and time the delivery request was made The delivery address ► A detailed description of all cannabis goods requested for delivery. The description shall include the weight, volume, or any other accurate measure of the amount of all cannabis goods requested d The total amount paid for the delivery, including any taxes or fees, the cost of the cannabis goods, and any other charges related to the delivery Upon delivery, the date and time the delivery was made, and the handwritten or electronic signature of the customer who received the delivery. ► Immediately upon request by the DCC, National City or any law enforcement officer, the Mr. Nice Guy delivery driver shall provide: ► All delivery inventory ledgers from the time the delivery driver left the licensed premises up to the time of the request; All delivery request receipts for cannabis goods carried by the driver, in the delivery vehicle, or any deliveries that have already been made to customers; and ► The log of all stops from the time the delivery driver left the Mr. Nice Guy dispensary up to the time of the request. If the Mr. Nice Guy delivery driver does not have any delivery requests to be performed for a 30-minute period, the I delivery driver shall not make any additional deliveries and shall return to the Mr. Nice Guy dispensary. Required meal breaks shall not count toward the 30-minute period. Upon returning to the Mr, Nice Guy dispensary, all undelivered cannabis goods shall be returned to inventory and all necessary inventory and track -and -trace records shall be updated as appropriate that same day Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Delivery Service Procedures DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan G. HOW THE CANNABIS BUSINESS WILL CONFORM TO LOCAL AND STATE LAWS. SEE NCMC SECTIONS 9.60.250 AND TITLE 18 AS THEY PERTAIN TO RETAIL ESTABLISHMENTS IN THE CITY OF NATIONAL CITY. Between our core group of owners and managers listed in this application, Mr, Nice Guy National City will benefit from 73 years of combined cannabis expertise, In the 6 years Mr, Nice Guy has been operating, it has never received a violation from any licensing authority, State or local. As such, we are confident that our team will be able to comply with all State and City regulatory requirements. Chris Glew, Esq. with the assistance of lakki Hernandez, our Director of Compliance ensure that we stay on the straight and narrow in terms of compliant operations. Our Standard Operating Procedures are outlined throughout this section for how we meet state and local legal requirements, including receipt of products, following Track and Trace systems, managing inventory and records, testing of products and quality control, sales procedures, waste management and environmental procedures, and other areas of potential interest for how we follow both the law and best -practices across our business, We have an amazing Director of Compliance: Jakki Hernandez. lakki provides on call and on the spot compliance support to our entire conglomerate of businesses in California. She will oversee all implementation, training and adjustment of our SOPs, CALIFORNIA CANNABIS TRACK & TRACE (CCTT) METRC [NCMC §9,60,230,C] All commercial cannabis companies are required to use METRC as the approved and exclusive provider of California's Cannabis Track and Trace (CCTT) system. There are numerous application program interface platforms on the market that integrate with METRC; these are listed on METHC's website. For now, we have chosen Leaf Logix Retail Software, but understand that technology rapidly and so, we reserve the right to change our POS system. Mr. Nice Guy selected Leaf Logix because of its ability to integrate, not only with METRC, but also with Weedmaps, Leafly, Nugg and several dozen other software systems used throughout the cannabis industry. Leaf Logix also integrates with third party advertising sites that offer customers the ability to place orders with our store directly through the third -party website, This feature is especially important to today's highly educated, brand -loyal consumers who seek out specific products. Third -party providers such as WeedMaps, Leafly, iHeartlane and Nugg, Leaf Logix offers customers the option to check in on the application downloaded to their phone, reducing contact within the dispensary and wait times. Phone, web and mobile orders are automatically processed, keeping our sales associates focused on in -person customers while inventory staff fulfills express and delivery orders for those who know what they want in advance, Leaf Logix also assists with inventory management by utilizing bar code integration for the SKUs we carry. From an enterprise management perspective, Leaf Logix offers the tools to operate more efficiently across the board by tracking customer data in one convenient location. In turn, this experience drives customer loyalty; repeat customers account for about 80% of all business, It is crucial for any business to access accurate, real-time inventory on hand, Leaf Logix makes sure that we will maintain an accurate inventory count, online and in store, so that customers can ascertain whether the product they are looking for is in stock before arriving at Mr. Nice Guy. Sales and operations data is also accessible through the Leaf Logix platform, providing us the ability to generate more than 100 different reports. INVENTORY - Mr. Nice Guy has established best practices for all inventory management based on the combined experience of our owners, managers and third -party advisory team. WHOLESALE DELIVERY RECEIPT AND ACCEPTANCE OF CANNABIS GOODS [19 CCR §15422] ► Wholesale deliveries are to be received from licensed distributors only during the hours of 9:00 a,m, and 5:00 p.m. ► Wholesale deliveries shall not enter through any entrance or exit that is available for public use and instead will go through our vendor door, [19 Cal. Code Regs §15422(c)] ► Upon arrival of the delivery transport vehicle at the shipping and receiving area, a manager will request identification and proof of state license from all persons on board the vehicle, ► The manager will then confirm thatthe state cannabis license number matches the distribution business name provided and thatthe employees of the distribution company have, ► Access to the Mr, Nice Guy retail facility will not be permitted to any person who does not have the proper documentation and identification ► Obtain a copy of the purchase order and sales invoice for the order and confirm it matches the order placed by Mr. Nice Guy ► Obtain a hard copy of the certificate of analysis for each batch being accepted and confirm that it matches the cannabis goods received and ensure that the lab analysis is within a 10% margin of error of what is printed on the packaging or label, ► Calculate the excise tax, tender the amount to the distributor and collect a receipt for the tax payment; calculated is as follows: 15% of the wholesale + distribution and transport costs x 1,8 (CDTFA established mark up rate for 2022) ► Accept the delivery of cannabis goods and enter the required information into Leaf Logix or reject all or a portion of the cannabis goods. Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Local and State Laws DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE all SECTION A: Business Plan WHOLESALE DELIVERY! SHIPMENT MANIFESTS AND INVENTORY DOCUMENTATION PROCEDURES [19 CAL. CODE REGS§15423] Upon receiving a delivery, but before acceptance, the inventory manager shall ensure all of the following are listed on the manifest, which is typically done through METRC: ► A description of each item such thatthe cannabis goods shall easily be identified on the manifest ► An accurate measurement of the quantity of the item ► The date and time the cannabis goods were received by Mr. Nice Guy ► The sell -by or expiration date provided on the package of cannabis goods, if any has not yet passed ► The certificate of analysis was issued within the last 12 months ► The name and license number of the licensed distributor or licensed microbusiness that transported the cannabis goods to Mr, Nice Guy ► The price paid for the cannabis goods, including taxes, delivery costs, and any other costs ► Excise tax paid to the licensed distributor with the accompanying receipt INVENTORY RECONCILIATION [19 CAL CODE REGS §§15424 AND 15051] In order to properly and accurately account for the inventory Mr, Nice Guy keeps in stock, inventory reconciliation is an integral part of our operation; Mr, Nice Guy, at all times, must be able to account for all of its inventory, ► In conducting an inventory reconciliation, a Mr. Nice Guy staff shall verify that its physical inventory is consistent with the records pertaining to inventory at least once every 30 days. 09 Cal, Cade Regs§§15424 and 15051(a)] ► Result of inventory reconciliation shall be transmitted to Mr. Nice Guy management, who will then ensure thatthe reconciliation is documented in the books and records of Mr, Nice Guy and shall be made available to the DCC upon request. ► If Mr. Nice Guy identifies any evidence of theft, diversion, or loss, we will notify the DCC and law enforcement pursuant to 19 CCR §15036, ► If a significant discrepancy as defined in 19 CCR §15034 is discovered between our physical inventory and our METRC or digital inventory records, Mr. Nice Guy shall notify the DCC and law enforcement pursuant to section 5036 of this division, [16 Cal, Code Begs § §15424 and 150510)) NOTIFICATION OF THEFT, LOSS AND CRIMINAL ACTIVITY [19 CCR §15036] Mr. Nice Guy will notify the DCC, the City Manager of National City and local law enforcement no later than 24 hours after the discovery of any of the following situations: ► Discovery of a significant discrepancy in its inventory. Significant discrepancy is defined as a difference in actual inventory compared to records pertaining to inventory of at least 3% of average monthly sales ► Discovery of diversion, theft, loss, or any other criminal activity pertaining to the operations of Mr. Nice Guy ► Discovery of diversion, theft, loss, or any other criminal activity by an agentoremployee of Mr. Nice Guy pertinenttothe operations of the dispensary ► Discovery of loss or unauthorized alteration of records related to cannabis goods, customers, or the licensee's employees or agents ► Discovery of any other breach of security The notification to the DCC will be submitted on the Notification and Request Form, DCC-LIC-027 published by the DCC, which shall include the date and time of occurrence of the theft, loss, or criminal activity, the name of the local law enforcement agency that was notified, and a description of the incident including, where applicable, the item(s) that were taken or lost. PACKAGING AND LABELING Other than exit packaging, Mr. Nice Guy will not package, repackage, label or relabel any cannabis goods at the retail level because retail operators are expressly forbidden from so doing under California law pursuant to 19 OCR §15412 and Cal, Bus. & Prof, Code §26120. As of January 1, 2020, any package containing cannabis goods must be resealable, tamper -evident, and child -resistant, Any cannabis goods not meeting this requirement will be rejected and returned to the distributor. All cannabis goods purchased by a customer will leave the Mr. Nice Guy dispensary in opaque exit packaging, However, if Mr, Nice Guy sells immature plants and seeds, the law does not require resealable, tamper -evident, child -resistant packaging. Additionally, we will not accept any cannabis product that is in the shape of or imprinted with the shape, either realistic or caricature, of a human being, animal, insect orfruit, 19 CCR §17300. Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Inventory Reconciliation DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan PROCEDURES DURING NON -BUSINESS HOURS ► The premises will be securely locked with commercial -grade, nonresidential door locks. ► The premises will have an active and enabled alarm system set by Mr, Nice Guy's closing staff before leaving for the night. ► Only Mr. Nice Guy employees and authorized individuals will be allowed access to the premises outside of operational hours. ► The property will be monitored by an onsite security guard. RETURNS [19 CCR §15410] Cannabis goods may be returned by a customer if the customer presents a receipt within 7 days of purchase and establishes that the cannabis good was defective or damaged. We do not accept returns because the customer did not like a particular product, but will have a feedback retention practice that tracks all customer complaints regarding the cannabis goods they purchased. If the same cannabis item is subject to multiple complaints, we will reach out to the distributor or brand directly to determine if there was an issue with a batch or to inquire further as to the reason customers are not satisfied with their products. If the supplier offers Mr. Nice Guy a refund or discount on the cannabis good, it will be passed along to the consumers who complained in the form of a future discount on cannabis goods purchased at Mr. Nice Guy. All cannabis goods that are returned shall not be resold, All cannabis flower and prerolls returned will be destroyed and reflected as cannabis waste in METRC and Leaf Logix, In the case of manufactured cannabis products ONLY, we may either destroy the product or return it to the distributor from whom the cannabis product was obtained in accordance with 19 CCR §15053, which allows for a non -defective replacement product or product of the same value. RECALLS U.S. F00D & DRUG ADMINISTRATION REGULATIONS, [ tit, 21; Code of Federal Regulations §7; 19 CCR § §17226-17227; Cal, Bus, & Prof. Code §26132(a)] Mr. Nice Guy's recall procedures quickly and efficiently prevent the sale of recalled products, notify consumers of recalled items and minimize the risks and harm to consumers within 24 hours of issuing a recall, Products under Mr, Nice Guy's control may be recalled for the following reasons: ► A manufacturer or distributor issues a recall notification, ► Orange County Healthcare Agency (Department of Health) the California Department of Public Health ("CDPH") the Department of Cannabis Control ("DCC") or other regulatory or health agency issues a notification that a product Mr, Nice Guy carries is under investigation for having been adulterated or misbranded, Upon receipt of more than one consumer complaint or negative reviews abouta product, Mr. Nice Guy management will review, investigate and determine whether the product poses a potential riskto consumers, DETERMINATION OF NEED FOR RECALL Mr. Nice Guy will appoint an employee to oversee all recalls in the dispensary. Prior to initiating a recall, the staff member will conduct a thorough investigation, on an expedited basis (24 hours maximum), to determine all relevant facts and circumstances. Such investigation may include: ► Injury and illness report review ► Communicate with complainant or notifying agency and conduct interviews if possible ► Determine credibility of allegations, if consumer complaint is basis of recall Retrieving and review Leaf Logix and California Cannabis Track and Trace (CCTT) METRO ("METRO") data ► Identify potential cause(s) of contamination or adulteration ► Obtaining details regarding duration and manner of storage and/or transportation of the suspect product by the retailer or other recipient Providing a report and recommendation to Mr, Nice Guy's management regarding the findings of the investigation and whether the evidence reviewed warrants a product recall. IMPLEMENTING A RECALL Upon a finding that a product poses a sufficient riskto consumers, the Mr. Nice Guy employee will promptly take the following steps: ► Immediately notify our management of the need for a recall, ► Secure, isolate and prevent the sale of all affected products in our possession, quarantine for a minimum of72 hours all products that are intended to be destroyed due to recall and affix to the recalled products any bills of lading or shipping manifests indicating the product information and weight. Products held in quarantine will be subject to auditing by MPH, ► Following the quarantine period, render the recalled cannabis product unusable and unrecognizable and do so on video surveillance. All recalled cannabis products rendered unusable and unrecognizable are considered cannabis waste and will be disposed of in accordance with 19 CCR §17226 by the staff member, ► Draft a recall notification to be distributed to consumers identified as purchasers of the recalled product to include (but not limited to): product information, production ID numbers, recalling company, manufacturer, reason for the recall, health hazard assessment and volume of recalled product, Proprietary & Confidential information of Mr. Nice Guy National City, LLC Not for Publication Daily Operations DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan ► Utilizing Leaf Logix, identify consumers who purchased any of the affected products (by identifying the transaction on the consumers personal purchase history profile) and immediately issue a STOP USE warning to the relevant persons regarding the affected product. Such persons will be contacted by phone, email, hand -delivered notice or personal visit, whichever may be most expedient. Communication efforts will continue until point of contact has occurred, ► Within 24 hours, where practicable, retrieve all affected product from all identified recipients in a manner compliant with the rules applicable to the pick-up and delivery of cannabis products in the State, ► In appropriate cases, issue a press release and other notices designed to ensure that consumers are notified of the recall and provide relevant information about the affected product. ► In coordination with the CDPH, specifically identify the affected product to determine whether such product may be remediated or otherwise salvaged. If the cannabis product can be remediated (no more than twice) it will be returned to a licensed distributor to deliver to a manufacturer who will work with the State on an approved remediation plan. ► In the event any or all of the affected product must be destroyed, carry out the destruction of the affected product in a manner satisfactory to the CDPH. We will only dispose of chemical, dangerous or hazardous waste in a manner that is consistent with Federal, State and local laws. No cannabis products will be disposed of in an unsecured area or waste receptacle that is not in the possession andlor control of our company. ► Track the total amount of affected product in-store and returned by consumers in response to the recall and enter into METRC and Leaf Logix: a) the weight of the product; b) reason for destruction; and c) date quarantine period began. Additionally, provide a report to CDPH regarding the progress of the recall. ► Fully cooperate with the CDPH enforcement team to ensure that a recommendation of "recall closure" can be made to CDPH as soon as practicable, DESTRUCTION AND WASTE MANAGEMENT [19 CCR §15054] All staff will be trained in and required to comply with all waste disposal regulations outlined in 19 CCR §15054 and Division 30 of the Public Resource Code. Cannabis waste shall not be disposed of in its packaging and shall be rendered unrecognizable and unusable before disposal, with the exception of vape cantridges that contain cannabis oil which shall be rendered unusable prior to destruction, but the cartridge may remain with the cannabis product inside. Cannabis waste will be disposed of in a secured waste receptacle on our property, which is only accessible to our staff members and stored separately from other cannabis goods onsite. As we have done at our other licensed locations, we will contract with GAIACA Cannabis Waste Company, unless another waste hauler is identified that is more commercially reasonable that meets the same strict compliance requirements, to collect and properly dispose of our cannabis waste. All waste disposal will be tracked in METRC as required by law, RECORDS MANAGEMENT AND RETENTION [19 CCR §15037AND NCMC §9,60.230,N] Mr. Nice Guy will maintain the documents referenced above in both physical and digital form. Subject to HIPPA restrictions, the books and records of Mr. Nice Guy shall be furnished to National City or its officials, employees and designees authorized to enforce the cannabis business regulations in National City for the purpose of conducting an auditor examination. Mr. Nice Guy will produce books, records, accounts, including all of the assets of Mr. Nice Guy National City, and any and all relevant data or documents no later than 24 hours after receipt of the City's request, unless otherwise stipulated by the City. The city may require the materials to he submitted in an electronic format that is compatible with the city's software and hardware. Books and records shall also be furnished to the DCC upon request. All private, employee, financial, consumer or medical records will be maintained confidentially in accordance with HIPPA, labor laws, consumer protection statutes, and privacy laws, All documents retained under this record retention policy shall be kept for a period of at least? years and made available to the City Manager upon request, unless privacy dictate that the records only be produced pursuant to a Court order, subpoena or warrant. NATIONAL CITY CANNABIS SALES REPORTING AND RECORDKEEPING [NCMC §§§9.60.230.N.1] Mr. Nice Guy shall allow National City officials to have access to the business's books, records, accounts, together with any other data or documents relevant to its permitted commercial cannabis activities, for the purpose of conducting an audit or examination at any time during the business's business hours, If not otherwise available, books, records, accounts, and any and all relevant data or documents will be produced no later than twenty-four hours after receipt of the City's request, unless otherwise stipulated by the City. Annually, or at anytime upon reasonable request of National City, Mr. Nice Guy shall file a sworn statement detailing the number of sales by the commercial cannabis business during the previous twelve month period (or shorter period based upon the timing of the request), provided on a per -month basis.The statement shall also include gross sales for each month, and all applicable taxes and fees paid or due to be paid. Mr Nice Guy shall also submitto the City a financial audit of the business's operations conducted by an independent certified public accountant as determined necessary by the City Manager. Proprietary & Confidential Information of Mr Nice Guy National City, LLC. Not for Publication. Records Management DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan MAINTENANCE OF OWNERSHIP LIST [NCMC §9.60,230.N,2] Mr. Nice Guy shall maintain a current register of the names and the contact information (including the name, address, and telephone number) of anyone owning or holding an interest in the commercial cannabis business. Additionally, Mr. Nice Guy will maintain a list of all owners, officers, managers, employees, agents and volunteers engaged or employed by Mr, Nice Guy and shall furnish the same to the City Manager promptly upon request. INVENTORY CONTROL RECORDS [NCMC §9,60.230,N.3] Mr. Nice Guy will also maintain an inventory control and reporting system that accurately documents the present location, amounts, and descriptions of all cannabis and cannabis products for all stages of the growing and production or manufacturing, laboratory testing and distribution processes until purchase as set forth MAUCRSA, Through METRC and Leaf Logix, Mr. Nice Guy will be able to maintain all harvest and production records for the cannabis goods it receives from suppliers as part of the seed -to -sale tracing capabilities of the software platform. PERSONNEL RECORDKEEPING PRACTICES Mr, Nice Guy will adhere to human resources best practices by maintaining confidential personnel records in a secure location with limited access, accessible only to those owners, managers and staff on a need -to -know basis. Within each personnel file, Mr, Nice Guy will maintain tabs for each of the following: GENERAL FILE ► Personnel records, including each employee's full name, social security or individual taxpayer identification number, date employment begins, and date of termination of employment if applicable, ► Application (signed upon hire) ► letter of offer ► Acceptance letter ► Requests for Personnel Actions ► Position description ► Compensation information ► Non -medical test results ► Employee Performance File Performance Evaluations ► Letters of commendation or letters of complaint ► Awards, certifications, achievements ► Training sessions attended ► Examples of work ► Requests for corrective action ► Disciplinary actions issued (e.g., verbal or written reprimand, suspension, termination) ► Miscellaneous File RECORDS OF POLICY OR JOB INFORMATION GIVEN TO EMPLOYEE ► Employee requests to examine their personnel file ► Leave forms ► Letter of resignation ► Exit interview questions Medical File ► Physical exam reports ► Injury reports ► Medical certifications ► Reasonable accommodation requests (ADA) ► FMLA information ► Genetic information Controlled Access Files ► Benefit plan choices and beneficiary information ► Interview evaluation forms and reference checks ► Grievances ► EEO/Affirmative action data ► Charges of discrimination ► Investigatory notes and attorney -client communications ► Legal actions complaints ► Education records (any records other than direct information related to a student) ► Promotion and Tenure records In addition, Mr. Nice Guy will maintain a current register of the names and the contact information (including the name, address, and telephone number) of anyone owning or holding an interest in Mr. Nice Guy's National City dispensary. Mr. Nice Guy will also maintain a separate register of all officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the commercial cannabis business. Mr. Nice Guy will provide copies of these registers to the City Manager or his/her designee upon a reasonable request. ADDITIONAL STATE LAW RECORD KEEPING PRACTICES [19 CCR §15037] Mr. Nice Guy will maintain the following records related to its National City dispensary operations for at least seven (7) years onsite, in a secure, limited access area, protected from debris, moisture, contamination, hazardous waste, fire, and theft: ► Financial records including, but not limited to, bank statements, sales invoices, receipts, tax records, and all records required by the California Department of Tax and Fee Administration under title 18 California Code of Regulations, sections 1698 and 4901. Personnel records, including each employee's full name, social security or individual taxpayer identification number, date employment begins, and date of termination of employment if applicable. Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Inventory Control Records DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE aid SECTION A: Business Plan Personnel records, including each employee's full name, social security or individual taxpayer identification number, date employment begins, and date of termination of employment if applicable, ► Training records including, but not limited to, the content of the training provided and the names of the employees that received the training, including a log of training in the Leaf Logix and METRO systems. Contracts with other licensees regarding commercial cannabis activity, Permits, licenses, and other local authorizations issued by National City to operate the Mr. Nice Guy dispensary and engage in retail sales of cannabis goods. Security records, except for surveillance recordings, required pursuant to 16 Cal, Code Regs §5044. Records relating to the composting or destruction of cannabis goods, i,e, cannabis waste disposal records, Documentation for data or information entered into the track and trace system, which for Mr, Nice Guy will be Leaf Logix and METRC, OPERATING REQUIREMENTS FOR STOREFRONT RETAILERS IN NATIONAL CITY per [NCMC §9.60.230 and NCMC §9,60,250] HOURS OF OPERATION [NCMC §9,60,230,A, 9,60,260.A and 19 CCR §15403] Initially, Mr, Nice Guy intends to operate from 8:00 AM TO 10:00 PM, Because of our convenient location right off the 5 freeway, we anticipate there may be morning commuter clientele interested in purchasing cannabis on their way to or from work, Mr, Nice Guy will operate only during the hours specified in the commercial cannabis business permit issued by the City, ► AGE RESTRICTION SIGNAGE [NCMC §9,60,230,B] No cannabis or cannabis products or graphics depicting cannabis or cannabis products shall be visible from the exterior of our Facility or on any outdoor sign. Instead, as described in Section H: Proposed Location, we will have a clean exterior with the sign for Mr. Nice Guy on the building. AGE VERIFICATION [NCMC §9,60,250,A and 9.60.2603] Using our ID scanner and the Leaf Logix platform, Mr, Nice Guy staff will verify the age and all necessary documentation of each individual to ensure the customer is not under the age of eighteen years. If the potential customer is eighteen to twenty years old, Mr. Nice Guy will confirm the customer's possession of a valid doctor's recommendation and/or Health and Safety Code Section 11362,71 identification card (medical cannabis card). Otherwise, all patrons must be 21 years old, Mr. Nice Guy will require all individuals seeking access to the commercial cannabis retail business mustshowtheir government -issued identification, and, if appropriate, doctor's recommendation of Medical Cannabis card, in orderto gain access into the retailer, These documents must also be shown atthe point of sale station at the time of purchase. Doctor recommendations are not to be obtained or provided at the retail location. ► AGE VERIFICATION NCMC §9,60,250,A and 9,60,260.E Using our ID scanner and the Leaf Logix platform, Mr, Nice Guy staff will verify the age and all necessary documentation of each individual to ensure the customer is not under the age of eighteen years, If the potential customer is eighteen to twenty years old, Mr, Nice Guy will confirm the customer's possession of a valid doctor's recommendation and/or Health and Safety Code Section 11362,71 identification card (medical cannabis card), Otherwise, all patrons must be 21 years old, Mr. Nice Guy will require all individuals seeking access to the commercial cannabis retail business must show their government -issued identification, and, if appropriate, doctor's recommendation of Medical Cannabis card, in orderto gain access into the retailer. These documents must also be shown at the point of sale station atthe time of purchase. Doctor recommendations are not to be obtained or provided at the retail location, CONTROLLED ENTRY NCMC §9,60.250.B Entrances into the our Facility will be locked at all times with entry strictly controlled, A "buzz -in" electronic/mechanical entry system shall be utilized to limit access to and entry to the retailer to separate it from the reception/lobby area, ON HAND INVENTORY. NCMC §9,60.250.0 and 9.60,260,C Mr, Nice Guy will only that quantity of cannabis and cannabis products to meet the daily demand readily available for sale on -site in the retail sales area. Additional product will be stored in a secured, locked area to which customers, vendors, and visitors shall not have access as reflected on our Premises Diagram on page by the limited access area markings, ► Locked Restrooms, NCMC §9,60,250,D While we will have a public gender neutral restroom on site for use by our customers, all restroom facilities shall remain locked and under the control of management. Patrons seeking to use the restroom will be given a key to use and security will monitor the comings and goings in the restroom to ensure no one is engaged in any misconduct, Limited Access Areas. NCMC §9,60,250.E As reflected in our Premises Diagram Mr, Nice Guy has established limited -access areas and permits only authorized individuals to enter the limited -access areas, Authorized individuals include individuals employed by the retailer as well as any outside vendors, contractors, or other individuals conducting business that requires access to the limited access area, All individuals granted access to the limited access area shall be at least twenty-one years of age, and if not employed by Mr. Nice Guy, shall be escorted at all times by an employee. Mr, Nice Guy will maintain a log of all individuals who are not employees who are granted access to the limited access area. These logs shall be made available to the City Manager ortheir designee upon request, Please see our Security Plan additional SOPS Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan STANDARD OPERATING PROCEDURES: RUNNING THE BUSINESS These procedures are time tested, commercial cannabis retail best practices based on the combined experience of our ownership and management team with the input of our legal counsel who specializes in commercial cannabis law combined with retail industry best practices adapted from Process Street, a premier workflow, checklist and SOP advisor. More than 200,000 companies utilize Process Street, including Microsoft, American Red Cross, Colliers International, the GAP, Emerson, Universal, the Economist and countless other Fortune 500 companies. OPENING PROCEDURES Employees of Mr. Nice Guy will be provided with an Opening Procedures Checklist and are expected to report forthe opening shift no later than one hour prior to the dispensary opening its doors to the public. Upon arrival, Mr, Nice Guy staff will open the main entrance door using the security badge issued by Mr. Nice Guy pursuant to Cal. Bus. & Prof. Code §5043. All doors will remain locked until the dispensary is open for business. Once in the facility, the Mr. Nice Guy employee will perform the following duties: Turn on all lights, ensuring all fixtures are well presented and that there are no broken lights, dimming or malfunctioning lights or an accumulation of dust on the fixtures Check security equipment to ensure proper operations and report any abnormalities to the security monitoring service Disable the overnight alarm Walk the floor to ensure the facility is ready and presentable to customer; ensure all product signs and displays are per brand specifications, if any Check for any spills, ensure all aisle are clean and free of debris Arrange products that may be out af place or no longer suitable for display Ensure goods are only displayed in the retail area Ensure all registers and point -of -sale equipment are ready to be used Ensure all loyalty tablets are ready to accept customer information Turn on all other electronic systems, including computers, music, televisions, menus and any product display areas Activate HVAC systems that may have been turned down overnight Meet with staff to ensure all employees are aware of daily goals, specials and objectives forthe day DAILY MANAGER PROCEDURES AND DUTIES Ensure all employees scheduled for each shift arrive, clock in and are able to complete their respective job duties for the day Contact staff to cover shifts in the event of understaffing, or employee illness or absence Assign lunch and break schedules Designate overflow or coverage for employees should they need to use the restroom or take an unscheduled break Assign daily duties to each staff member, including cleaning, inventory management, restocking, cash handling and merchandising Review inventory reports to ensure product lines remain in stock o Place necessary product orders b Preside overstaff meeting(s) as necessary ° Coordinate with vendors for any in-store promotions o Provide backup support to staff as needed o Drop cash received into safe when the amount reaches $1,000,00 Patient/Customer Reception Our retail facility entrance will be modern, refined and designed to relate to an active and community connected -lifestyle. MAUCRSA allows retail operators to accept both medicinal and recreational customers into the storefront facility. 19 CCR § 5402 provides the framework for customer access to the retail area. When individuals enter the facility, they will initially be greeted by a receptionist, but there will not be access to any portion of the facility that contains cannabis until the receptionist confirms the individual's age and purpose for entering the facility. Individuals shall be granted access to the retail area to purchase cannabis goods only after the receptionist has confirmed that the individual's age and identity, confirming that the individual is at least 21 years of age and has a valid proof of identification, or that the individual is at leasti8 years of age and has valid proof of identification and a valid physician's recommendation for himself or herself or for a person for whom he or she is a primary caregiver.19 CCR §5404(a). Acceptable forms of identification include the following: (1) A document issued by a federal, state, county, or municipal government, or a political subdivision or agency thereof, including, but not limited to, a valid motor vehicle operator's license, that contains the name, date of birth, physical description, and photo of the person; (2) A valid identification card issued to a member of the Armed Forces that includes a date of birth and a photo of the person; or (3) A valid passport issued by the United States or by a foreign government. A valid proof of identification must clearly indicate the age or birthdate of the individual.19 CCR §5404(b), Retail Sales In accordance with National City and California law, Mr. Nice Guy will engage in both onsite cannabis sales as well as delivery sales directly to the customer, Mr, Nice Guy will also sell branded merchandise approved in advance by the BCC, Mr, Nice Guy will not make any cannabis goods available for sale or delivery to a customer unless: 1. The cannabis goods were received by Mr. Nice Guy from a licensed distributor or licensed microbusiness authorized to engage in distribution 2. Mr. Nice Guy has verified that the cannabis goods have not exceeded their best -by, sell -by, or expiration or sell -by date if one is provided 3. In the case of manufactured cannabis products, Mr. Nice Guy has verified that the cannabis product complies with all requirements of Cal. Bus. & Prof Code §26130, which requires that Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Opening Procedures DocuSign Envelope ID: 314F4623-2749 460E-A1DF-66 1913946 CE _ _ _ ail SECTION A: Business Plan a. Edibles are not appealing to children or easily confused with commercially sold foods or candy (no Weed-0's that look like Cheetos, no Kanna-Kat wafer cookie candies that look like Kit-Kats, etc.) b. Edibles, not including sublinguals or mouth strips, have only 10 mg of THC per serving and 100 mg THC per package; sublinguals or mouth strips may contain up to 500 mg THC per package and labeled for medicinal use only and sold only to medicinal customers [CCR 540315] c. Topicals may contain up to 1,000 mg of THC per package, or up to 2,000 mg THC per package if labeled for medicinal use only and sold only to medicinal customers [CCR §40315] 4. Mr, Nice Guy has verified that the cannabis goods have undergone laboratory testing 5. Mr. Nice Guy has verified that the batch number is labeled on the package of cannabis goods and matches the batch number on the corresponding certificate of analysis. 6, Mr. Nice Guy has verified that the packaging and labeling of the cannabis goods complies with then enacted packaging and labeling laws, as described in the packaging and labeling portion of these standard operating procedures. 7 Mr, Nice Guy has verified that the cannabis goods comply with any other state or local law that is now or may be enacted at a later date, Maximum Daily Sales to Customers All cannabis and cannabis products sold, purchased and dispensed by Mr, Nice Guy will be cultivated, manufactured, and transported by licensed operators that are compliant with the State and local regulations. We will not conduct any business with collectives, cooperatives or other unlicensed operators. Because of the rigorous track and trace requirements and our dual system of tracking and tracing using METRC and Leaf Logix, Mr, Nice Guy is confident that it will be able to ensure that cannabis and cannabis products they procure are not sold, distributed, or transferred out of the State. Although California does not restrict retail sales of cannabis and cannabis products to California residents, we are keenly aware of efforts to subvert the maximum allowed to be purchased at retail by practices such as looping, which recently made national news for at least one Colorado dispensary last year. We will refuse to sell any products to persons we suspect might engage in interstate activities and comply strictly with the state- imposed restrictions on the amount of cannabis a person is able to purchase each day. Cannabis Good Type Adult Use Limit Medicinal Limit Edibles that are not orally 10 mg perserving/100 mg per package dissolving as defined byl9 CCP 5000 (vv) Orally inedivingproducts 100 mgper package 500 mgper package as defined in 19 CCR p g p g 5000(vv) Concentrates 1000 mg per per package 500 mg per package In the event that we learn that any of our suppliers or customers knowingly or recklessly allow cannabis and cannabis products to be transferred out of the State of California, we will immediately terminate all future business with that company. Retail Sales Area: Cannabis Goods Display [19 CCR §5405] Our retail sales area is inviting and compliant in every way. Goods on display will be exhibited in our welcoming, state-of-the-art showroom (retail sales area) with restricted access to those clients who have been screened, and then only when accompanied by a Mr. Nice Guy staff member. During all business hours, at least one Mr. Nice Guy employee will be present in the reception area, and at least one employee shall be present in the retail sales area where cannabis is dispensed and visible. All sales of cannabis goods will take place within the retail area of the dispensary, except for cannabis goods sold through delivery. Cannabis goods on display will be removed from their packaging and placed in containers to allow for customer inspection as depicted above (display containers for the cannabis goods themselves, and locked display cases to hold the containers when not being directly inspected by the consumer). Once these goods are removed for display, they cannot be sold and must instead be destroyed pursuant to California cannabis waste disposal laws. Mr. Nice Guy will use GAIACA, a cannabis waste disposal company that specializes in cannabis waste hauling that implements environmentally friendly practices. The product packaging and containers will be in locked display cases to prevent customer access without the assistance of a budtender employed by Mr. Nice Guy, A Mr. Nice Guy sales associate will be available at all times in the retail sales area to assist customers with product selection, recommendations and inspections and to allow customers to inspect the product using our samples. The employee will remain with the customer at all times while the cannabis goods are directly under inspection by the customer CLOSING PROCEDURES No business wants to rush its customers out the door when the day is done. However, given the specific requirements of MAUCRSA, our facility will close promptly at10:00 p.m,To ensure compliance with this important rule of law, we will allow retail transactions only until 9:45 p.m. Mr, Nice Guy staff will announce that retail sales will be concluding at 9:45 p.m. starting at 9:30 p.m.Ifthe reception area has more than two customers waiting to transact their sales, they will be offered a menu of items in an effort to expedite the retail process. Before closing and leaving for the evening, staff will complete the following duties: 1. Clear all retail sales areas and reception areas of all customers by 10:00 p.m. 2. Lock all doors 3. Visually inspect all areas of the dispensary, including restrooms, stockrooms, closets, retail areas and reception 4. Synchronize Leaf Logix POS system with METRC state mandatory system 5. Housekeeping: wipe down all display cases and individual display containers, vacuum, sweep or mop all floors, wipe down reception areas, organize all loose papers and documents 6, Arrange for and confirm cash transport by armored vehicle from safe, 7. Set the alarm system for the premises Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Closing Procedures DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan A.2.1.G. HOW CANNABIS AND CANNABIS PRODUCTS WILL BE TRACKED AND MONITORED TO PREVENT DIVERSION. DESCRIBE THE POINT -OF -SALE SYSTEM TO BE USED AND HOW IT WILL INTERACT WITH THE STATES MANDATED TRACK AND TRACE SYSTEM. Preventing diversion is a cornerstone of our security model, Our numerous safeguards include: Product Access Protocols, Security Procedures, Access Control Policies, Key/Access Card Issuance Procedures, in addition to checks against our Records and Record Software, The details of these anti -diversion procedures are as follows: Product Access Protocols All customer must have a valid ID to enter the store and again to make their purchase. They do not have access to any cannabis product until after the sales transaction is final, and the purchase can only be for themselves, The majority of the cannabis product is kept in the locked security cage with access only allowed to the store manager and assistant manager; therefore, sales staff has limited access to product, as only a minimal amount is kept on the sales floor at any given time, Another way in which we keep the amount of cannabis product on the sales floor to a minimum is by product fill-ins being done by the store manager/assistant manager prior to busy customer traffic times. Security Procedures / Access Control / General Provisions We acknowledge that it is our responsibility to maintain the security of all cannabis items on the premises; this includes our responsibility to ensure adequate safeguards against theft or diversion of cannabis items and required records. To offset this liability, the Security Director will designate internal managers and may utilize licensed security contractors to accomplish these goals, Any contracted security services and their agents that are utilized will be duly licensed and insured per the California Private Security Services Act requirements and in compliance with local regulations of private security services where applicable, The Security Director will ensure that all doors of the premise include commercial -grade door locks. Each interior and exterior door of the facility maintains an appropriate level of access control relative to the hierarchy of risk and access restrictions close to each facility area. We may incorporate a variety of access control measures as warranted by the contents of each area. Access control measures we employ include the following: Keys marked as "Do Not Duplicate,' Electronic access control systems (cards/fobs), Coded doors Biometric security measures Padlocks maintained by the utility provider will secure the facility transformer. Externally accessible house power will be contained in padlocked panels, and internally accessible breaker boxes will remain secured with padlocks at all times. Only the owner and managers will have access to the keys relevant to our power infrastructure, The facility's surveillance, IP network, and alarm systems maintain emergency backup power supplies sufficient to maintain system operability in a power outage event for aver 24 hours. All facility access keys or cards/fobs issued to employees will be managed through a written or digital sign-in/sign-out log and audited daily by the security director or its designee. Only managers designated by the security director will be permitted to take keys, access cards, or fobs off -site. Employees must secure keys, access control cards, and security codes at all times and may not provide access through any means to any other person. Only managers may grant temporary access to any employee, vendor, contractor, visitor, or regulatory inspector. All exterior entry points will always be maintained in a closed and locked state and attended by a manager or security officer during all operating hours of the business. All interior doors designated as high -security areas, such as product and currency storage vault, will remain closed and always locked. When the business is not operating, all interior and exterior doors will be closed, locked, and alarmed. All rooms that contain cannabis products, currency, and security system infrastructure will be equipped with a door that includes an automated re -locking device to prevent inadvertent exposure upon vacating. All finished products and/or currency kept on the premises will be secured in the vault or safe, Any safe on the premises will be commercial -grade, made of metal, and be of a size capable of storing all the cannabis items anticipated to be an the premises, The safe will be securely anchored to a permanent structure and will meet or exceed the Underwriters' Laboratory, or UL, rating based on the value of its contents, We recognize that cyber threats may exist that could impact the facility, and will take precautions to ensure consumer privacy, protect sensitive financial records, and minimize the potential of unauthorized access or intrusion. As appropriate, the facility's network infrastructure will be encrypted and password protected. Only authorized personnel who have been trained in secure records management procedures will have access to facility data, Users of the system will have role -based authentication, and the sharing of logins will be strictly prohibited. The software will require security measures such as password lockouts, login timeouts, use of strong passwords, periodic required password changes, prohibitions of repeated use of a password, and the ability for administrators to disable user access, We will, as needed, hire a third -party Information Technology company to ensure that digital record -keeping systems employed by the facility are secure. All electronic records will be stored onsite in short-term storage and off -site in long-term backup storage, In the case of cannabis items being present that may require refrigeration, our practice is to securely enclose such items in a refrigerator or freezer capable of being locked and securely anchored to a permanent structure of an enclosed area equipped as a vault (as described above), Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Security Procedures DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan The model type and weight of any safe or storage refrigerator will be documented in our procedures upon implementation. Patron and general staff access into the facility will be limited to the front door entrance. The access point will remain closed and locked at all times; a uniformed security officer will control ingress and egress. A manager will be on duty during all operational hours of the facility and provide breaks and meal period coverage for the uniformed security officer. Employees will conspicuously wear an employer -issued identification card while within the facility. The facility manager will control identification cards, issue them, and collect them daily to prevent unlawful duplication, replication, or counterfeiting, Identification badges will: Be laminated or plastic coated. Include the "doing business as" (DBA) name and license numberofthe licensee. First and last name of the employee. Unique employee number assigned by the licensee. Include a color photograph of the employee, which will adhere to the following, Display clearly the entire front of the employee's face. Be at leastl inch in width and 1.5 inches in height. Any pedestrian access points of the facility besides the lobby will be designated as and equipped for emergency -only exits, and shall have no exterior hardware, shall be equipped with crash bars for emergency exiting, and shall be maintained in an alarmed state. Any solid core exterior doors will be equipped with a 180-degree viewing device to screen persons before entry, Access Control Policies The security director or their representative will ensure that all entrances and exits on the premises are securely locked during the hours when the facility is not open, Any keys or key codes to the enclosed area remain in possession of designated managers, the security director, or other authorized personnel designated by the security director, An accurate and current written or electronic log identifying those parties in possession of access keys, codes, fobs, or codes is the responsibility of the security director. The secure server that will maintain onsite backup record storage will be physically located in a secure room on the premises and may include media that is backed up daily. In general, Onsite backup storage will include at least one year of historical data. A third -party data storage provider will manage off -site secure data storage. Remote data storage will consist of all data records at least seven days and older and stored in perpetuity, and data older than three years may be purged from storage. All archived required records not stored electronically will be stored in a locked storage area limited to managers/owners of the facility with a legitimate business need for access, The security director has ultimate responsibility for issuing access to areas containing cannabis, currency, or security infrastructure. Access will be limited to individuals where a business need for access is demonstrated, Issuance must be recorded by the issuing individual, including documentation of any facility keys, alarm codes, electronic access codes, passwords, or combination codes. All entrances to areas of a cannabis facility where cannabis products are stored will be equipped with video surveillance and require a key, access card/fob, or code to access. Access control logs generated in accordance with this policy or through the employment of digital access control systems will be retained for no less than ninety days. Keys and electronic access codes must be protected and, therefore, will not be loaned out, will not be left unattended, and may not be transferred directly from one employee to another, Employees must report any lost keys or access cards to their manager immediately so the security director can determine whether the system has been compromised and whether re -keying will be necessary, It is against company policy to duplicate keys, share passwords, or share access codes, Key/Access Card Issuance Procedures Authorized individuals, including employees, authorized contractors, and authorized vendors, will be permitted to check out a key or access card/fob for use during their assigned work. The issuance will be for a specified amount of time consistent with the authorized purposes for access, Keys or access cards will be issued and collected daily to employees to access the areas in which they are regularly assigned duties. The Security Director must maintain a log of all issuances and must include Employee name and identifier, date issued, term of distribution if applicable, date to be returned, if applicable, and signature of the key holder and key issuer. When employment has been terminated, all keys will be returned and recorded by the security director or assignee. Failure to recover keys upon the termination of employment will require a key change at all locations where the unreturned key is designed to provide access. Records and Records Software Mr. Nice Guy's practice is to combine our track -and -trace system information with our own weekly inventory reconciliation. This provides us with detailed product counts twice as frequently as required. We prefer this cross-check method to keep more accurate records and to guarantee better that products are not lost, stolen, or otherwise diverted. We choose our Fulfillment Managers based primarily upon a high level of attention to detail and their proven capabilities through years of experience as fulfillment specialists, This is important as they serve as the first line of defense in preventing errors in product inventory by practicing careful product review, paced order checking, and accurate record keeping. Part of that accurate record keeping is to check a product's track -and -trace history upon delivery to ensure accuracy. Vendor traceability and the details input in the track -and -trace system serve as the authentic base for product information collection and confirmation. We utilize track -and -trace to this extent because of its clear, thorough, and unbroken chain of custody historical record, The following information will be physically logged in a template log sheet located inside each product's safe for every product that is moved from the inventory area to the retail area: Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Records and Records Software DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan A.2.3. DESCRIBE THE DAY-TO-DAY OPERATIONS IF YOU ARE APPLYING FOR A DISTRIBUTION PERMIT. THIS SHOULD INCLUDE AT A MINIMUM THE FOLLOWING CRITERIA: The main purpose of our distribution operation will be to facilitate sourcing cannabis and concentrates for our preroll line and for storage and testing services for the cannabis goods we produce and to distribute our preroll line of products. For example, we have several house brands of flower that bulk flower and concentrates at wholesale prices and pass the savings on to our customers, Bulk flower can also be stored at our National City Facility until the dispensary is low on inventory for any particular house brand. Once the dispensary lets the distribution side know that additional house flower is needed, the cannabis can be packaged into its final form and testing can be arranged. Because of our long standing relationship with Varity testing lab, typical turn around to receive a certificate of analysis for packaged flower is 48 hours. This process will allow Mr, Nice Guy to provide the freshest flower possible to its customers are the lowest possible price, r A.2.3.A. IDENTIFY THE NUMBER OF DISTRIBUTION DRIVERS, HOURS OF DELIVERY AND VEHICLES TO BE USED. Initially, Mr. Nice Guy will employ two (2) distribution drivers and add additional drivers as needed. We expect that one driver will be busy sourcing and transporting bulk cannabis and cannabis concentrates for our preroll and infused preroll line, and the other driver will distribute the finished product after testing to retailers and distributors throughout the State, Mr. Nice Guy will be purchasing two (2) fully electric Ford Transit Cargo Vans. Given the rising price of gas, as well as greenhouse gas emissions, we opted to purchase electric vehicles for our distribution fleet. We will be purchasing these vehicles from Perry National City Ford located at 2050 National City Blvd, National City, CA 91950. The distribution portion of the Facility will operate from 9:00 am to 5:00 pm, Monday through Saturday with staggered shifts. All distribution deliveries will be scheduled during business hours. Distribution staff will mimic the Vendor Coordination SOP above in the retail processes section. --• = a - .. 1 r I 1 tr- t Is..:e , 1 - I il`f I I it = _. i ,___ I--r -I I -�e.. ®® D A.2.3.B. DESCRIBE THE TRANSPORTATION SECURITY PROCEDURES. DISTRIBUTION TRANSPORTATION SAFETY PROCESS 1, Purpose The purpose of this SOP is to provide guidance for preparing to ship cannabis and manufactured cannabis products between licenses and retail locations. 2, Scope The scope of this SOP are the steps required by employees to prepare shipping manifest and containers of cannabis originating from our facility. 3. Prerequisites This SOP has six separate components. They include: 1. New Inventory Order 2. Fulfillment 3. Create Manifest/Trip Plan 4, Tra nsportation 5. Delivery 6, Post -Delivery Each part has its own separate documentation that must be completed to close out the order in the seed to scale tracking system, 4. Responsibilities Transportation Agents- The facility's transportation director, security employees, inventory manager, and quality control manager must ensure the transportation manifest and security protocols are followed in preparing the order. 5, Procedure Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication, Records and Records Software DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail SECTION A: Business Plan 5, Procedure The facility's transportation of cannabis goods and products products between its facilities, a laboratory, a distributor, or retailer in an electric Ford Transit Van shall require that: 1) only employees designated by the facility, who are trained and knowledgeable with the transportation protocols required by state law, shall transport cannabis and manufactured cannabis products. 2) Every transport of cannabis and manufactured cannabis products shall be accompanied by at least two employees. 3) Each time cannabis and manufactured cannabis products are transported; the facility shall prepare a manifest on a form prescribed by the department that lists elements required by the state's tracking system, 4) The facility shall only transport cannabis or manufactured cannabis products that are listed on the manifest, 5) The facility shall transport cannabis or manufactured cannabis products in secured containers and the shipping container shall include a copy of the manifest in the interior and on the exterior of the container. 6) For transport between or among licensees, a transport container shall be packed, secured, loaded and unloaded, and unpacked, in full view of security surveillance cameras. 7) Cannabis and manufactured cannabis products shall be transported under conditions that maintain their quality and safety. 8) Upon receipt of cannabis and manufactured cannabis products our facility or the laboratory shall immediately report to DCCIMETRC any discrepancies between what it received and what is on the manifest and all parties involved must sign the manifest to declare receipt of packages or adjustments that took place. 9) The facility employees transporting cannabis and manufactured cannabis products shall not stop at a location not listed on the manifest. 10) The facility shall transport cannabis and manufactured cannabis products using routes that reduce the possibility of theft or diversion,11) The facility shall not transport cannabis or manufactured cannabis products: a) off -site to qualifying patients or to primary caregivers; b) to another country or another island within the same country,12) All transport vehicles will be equipped with GPS and indoor cameras. The transport vehicle will have no windows where cannabis is stored and cannabis will be stored in locked pelican -style storage bins inside a cage in the back of the van, 13) Distribution vehicles will be equipped with a secured alarm system and panic buttons. This system will be activated if the vehicle is left unattended. This safety mechanism will prevent theft or diversion and will ensure the safety and security of our employee -driver, and the safe transportation of cannabis and cannabis products. New Inventory Order Fulfilment Filled out Transportation (Outgoing) log sheet Create a is invoice for the inventory order The date that order is placed Products and quantities ordered Prices of products Estimated delivery dates Collect products needed for inventory order Take ordered/ collected products out of the inventory control system Package the order of products into a container that is constructed on tamper -evidence, opaque material The use of tamper -evident cardboard boxes, hard plastic opaque cases that can be locked with tamper -evident seals or locks, or a similar shipping package that will meet state requirements Seal said tamper -evident package with tamper -evident tape. If transportation multiple packages to the same facility, the packages will need to be shipped within one large tamper -evident container, Repackaging- if necessary, registering employees may have to repackage the delivery items into a container that is constructed of tamper -evident opaque materials and sealed with tamper -evident tape. This will typically only happen if the original packaging is defective or gets destroyed, Cannabis will need to be repackaged if not originally packaged in an opaque container. Repackaging may be required if multiple packages are identified as being shipped to the same recipient If this is the case, then the packages will need to be repackaged into one large opaque tamper -evident container and sealed with tamper -evident tape. Ensure package is sealed with tamper -evident tape; seal all entry access points. Complete the Cannabis Products Daily Transfer/ Shipping log sheet, 6, References Please refer to shipping protocols, and protocols for entering information about deliveries into the seed to sale software, Leaf Logix 7. Reporting Along with the seed to sale tracking system Leaf Logix and METRC all of our manifests and invoices are logged and stored for 5 years. All copies of the shipping manifest must be made available to the accounting department, the head of the facility, and to the internal auditor. A.2.3.C. DESCRIBE HOW INVENTORY WILL BE RECEIVED, PROCESSED, STORED, AND SECURED IN THE PERMITTED PREMISES. Procedure for Transporting Cannabis Goods: Transportation Loading: Loading at the facility will also take place under the supervision of a minimum of two employees and in a place that is inconspicuous and out of view of the public. All products will be transported from the dispensary to the vehicle and from the vehicle to the designated drop-off locations in a sealed and locked container. Access to the container will require both combination input on an electronic keypad and a physical key All cannabis goods must be placed in an opaque exit package prior to leaving the premises Delivery will not contain more than 53,000 of cannabis goods at any time Delivery Window: Deliveries will only take place between 6:00 a.m. and 10:00 p.m, These time parameters exceed DOH requirements and will ensure for compliance even in the face of unexpected circumstances. Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Records and Records Software DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan Tracking: Deliveries will be made only within the State of California which we confirm by requiring submission of GPS tracking records, All transport vehicles will be equipped with GPS monitoring and will be required to update the dispensary upon every completed delivery. We will require the use of a real-time wireless reporting of all deliveries to monitor delivery, which we believe will help prevent diversion during the delivery process, It also will allow us to track the location and delivery time of products. Secured Inventory: Vehicles will be equipped with either a secure lockbox or locking cargo area. Vehicles will not have any cannabis identification, and no medicine or paraphernalia will be visible, The transport vehicles will be newer model and temperature controlled. Products remain in the locked transport container during transport. The incoming container will be removed from the delivery vehicle under the supervision of a minimum of two employees, The container will only be opened once it is securely inside the dispensary. Delivery vehicle will not contain more than $3,000 of cannabis goods at anytime Transport Agents: Deliveries will only be made by employees of the retailer All deliveries from our facility will include the use of trained security personnel in teams of two or more. It is understanding that the delivery drivers will be required to successfully complete training, how to prevent robberies, protect their lives, and stop "carjackings:' There will be at least one team member present with the vehicle at all times when cannabis is present. Transport agents will be able to engage in two-way communication with the dispensary during transport in case of emergency. Transport agents shall valid driver's licenses and carry identification which shall be available to DOH, or its agents, law enforcement or other Federal, State, or Local government officials if necessary to perform the inquiring entities functions and duties While engaged in the transport of cannabis and within reasonable time before and after the same, transport agents may not wear any clothing or insignia which signifies the agent may be in possession of cannabis, All drivers with incoming medicine will be required to be in contact with our dispensary at the origination of the transport process and ten minutes prior to arrival. We will keep all transportation documents computerized and ready for inspection. Transportation Manifest Proof of automobile and corresponding liability insurance and placement of our dispensary as an additional insured will be required prior to operations and on a quarterly basis. The name, license number, and premises address of the originating licensee, The name, license number, and premises address of the licensee transporting the cannabis goods, The name; license number, and premises address of the destination licensee receiving the cannabis goods into inventory or storage. The date and time of departure from the licensed premises and approximate date and time of departure from each subsequent licensed premises, if any. Arrival date and estimated time of arrival at each licensed premises. Driver license number of the personnel transporting the cannabis goods, and the make, model, and license plate number of the vehicle used for transport All transport of outgoing products will be supported by a detailed transit manifest, All transportation recordkeeping will be digitalized and be an output of the seed to sale tracking system. Procedure The name, address and permit number of the dispensary, name of and contact information for a representative of the dispensary with direct knowledge of the transport, The name, address and permit number of the receiving patient or MR. NICE GUY owned dispensary, and the name of the contact information for a representative of the cannabis organization. Maps and designated routes, Date along with arrival and departure times, Transport Vehicle's make, model, and license plate number The name and identification number of the dispensary agent responsible for the transport, and Product information (type of product, quantity, inventory tracking numbers). A copy of this manifest is kept at the dispensary and a copy is carried by the transport agent during the trip, After delivery, the transport agent will record the end -time and actual route of the trip on the transit manifest, A copy of the manifest should go to the recipient receiving the cannabis, All transport records will be kept and maintained and provided to the Bureau of Cannabis Control for review on request. All cannabis goods will be placed in an opaque exit package prior to leaving the premises Delivery vehicle will not contain more than $3,000 of cannabis goods at any time OWe will require all incoming materials to have a detailed transit slip ready on arrival and carried throughout the trip, Procedure for Receiving Shipments of Cannabis Goods Transport Agent will carry a detail transportation manifest containing: A unique Purchase Order number to track system receipts The name, license number, and premises address of the originating licensee. The name, license number, and premises address of the licensee transporting the cannabis goods. The name; license number, and premises address of the destination licensee receiving the cannabis goods into inventory or storage. The date and time of departure from the licensed premises and approximate date and time of departure from each subsequent licensed premises, if any. Arrival date and estimated time of arrival at each licensed premises. Driver license number of the personnel transporting the cannabis goods, and the make, model, and license plate number of the vehicle used for transport Proprietary & Confidential information of Mr. Nice Guy National City, LLC. Not for Publication. Records and Records Software DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan The retailer will accept, possess, or sell cannabis goods if they are not packaged as they will be sold at final sale Upon arrival either the Inventory Control or Transport Agent will update the system to reflect receipt of the unique Purchase Order Upon receipt of cannabis goods for tra nsport, storage, or inventory, a licensee shall ensure that the cannabis goods received are as described in the shipping manifest, and shall record acceptance and acknowledgment of the cannabis goods in the track and trace system. If there are any discrepancies between the type or quantity specified in the shipping manifest and the, type or quantity received by the licensee, the licensee shall record, and document the discrepancy in the track and trace system and in any relevant business record. A.2.3.D. DESCRIBE THE QUALITY CONTROL PROCEDURES DESIGNED TO ENSURE ALL CANNABIS IS PROPERLY PACKAGED, LABELED, AND TESTED. Responsibilities It is the responsibility of the Quality Control Director to ensure all employees under their direct supervision understand how the facility provides samples to the independent lab for testing, as well as how infused products are tested via a distributor. Additionally, the Quality Control Director must ensure that cannabis -infused products and non -infused cannabis products are stored separately and labeled accordingly. Lab testing Procedure All formulated products received in our distribution facility in their final packaging and are entered into a testing log before it is provided to the laboratory. The sample will be weighed, REID (METRC Blue Tag) scanned, and all data will be recorded within Leaf Logix prior to being removed from the secured sampling area. The laboratory employee will select and prepare several random samples from every batch to ensure the quality, purity, and consistency of the dose through a statistical approach. The laboratory staff will then test each random sample for harmful microbiological contaminants, mycotoxins, heavy metals, and pesticide chemical residue, In addition, each sample will also be tested for active ingredients including but not limited to cannabinoid profiling for the following: THC, THCa, CBD, CBDa, and CBN. Under no circumstances shall cannabis batches awaiting contamination results and active ingredient analysis be included in a cannabis product or sold to a retail facility prior to the time that the laboratory has provided those results, in writing, to the the facility management team. If samples from a batch are tested and do not fall within state accepted health and safety levels for any of the above -mentioned contaminants or any additional contaminants that the state does not deem for distribution, it is the facilities policy to destroy and remove any contaminated product in a manner consistent with state compliance for the policy for disposal of green waste. Once a batch sample passes the microbiological, mycotoxin, heavy metal and pesticide chemical residue test, the entire batch will be released for immediate manufacturing, packaging, and labeling for transport and sale to a facility. An electronic copy of all test results will be filed by laboratory staff for any batch that does not meet the standards set for microbiological, mycotoxin, heavy metal, and pesticide chemical residue tests, These results will also be sent to facility staff within the same time frame. The laboratory staff will also maintain a comprehensive record of test results and make them available to state and local officials, and or the public, as needed 6. References The independent test lab we work with provides us with guidelines for sample preparation that conforms to the state's regulations. The quality control manager maintains their source documents for preparing samples, along with the requisite forms that must accompany all samples. In the event of a question, the resource documents provided by the lab are helpful, and they also provide a toll -free number for questions. Reporting The quality control manager receives all lab reports for all samples sent out for testing. All lab reports are stored in an external hard drive on -site and once tests are submitted by the laboratory all results are available in METRC connected to the cannabis goods manufactured package ID. All employees are trained to know where to find out the latest state requirements for labeling and all labels are sent to the Compliance Department for approval before they are sent to the production line for retail sales. Responsibilities: It is the responsibility of the Manager to ensure that all labels are securely placed on all work in process and finished products, as well as ensuring the proper content is printed on labels, All labels and packaging are required to be approved by the Director of Compliance. Equipment and Utensils All equipment will be used in accordance with their operating instructions to avoid the adulteration of cannabis products with lubricants, fuel, metal fragments, contaminated water, or any other contaminants, Installation, Equipment shall be installed so as to allow cleaning and maintenance of the equipment and of adjacent spaces, Equipment that is not easily moveable shall meet the state (c) Cleaning, sanitizing, and maintenance, Equipment and utensils shall be maintained in a clean and sanitary condition and kept in good repair. The quality control program for cleaning, sanitizing, and maintenance of equipment and utensils shall include the following elements, at minimum (1) A detailed, written procedure for cleaning, sanitizing, and maintaining (including calibrating) equipment and utensils; (2) A schedule for cleaning, sanitizing, and maintaining equipment and utensils; (3) A log for documentation of the date and time of maintenance, cleaning, and sanitizing of equipment and utensils; and (4) A procedure for storing cleaned and sanitized equipment. Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Records and Records Software DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION Al Business Plan Testing: The net weight on any packaged cannabis goods containing dried flower only shall not be considered inaccurate if the actual weight is within plus or minus 3% of the labeled weight. (1) Manufacturing Account Manager will place the initial order of plant or package tags within ten (10) calendar days of initial credentialing into the track and trace system and shall reorder plant or package tags as needed. (2) The physical receipt of plant or package tags shall be recorded in the track and trace system within three (3) calendar days of receipt as well as entered into the Leaf Logix software. If ordered plant or package tags are not received by the licensee, the licensee shall notify the Department. Moisture Content and Water Activity Testing. (b.) The licensed laboratory shall analyze a minimum of 0.5 grams of the representative sample of dried flower to determine the level of water activity and the percentage of moisture content, (1) The dried flower sample, including pre -rolls, shall be deemed to have passed water activity testing if the water activity does not exceed 0.65 Aw. The laboratory shall report the result of the water activity test on the certificate of analysis (COA) and indicate "pass" or "fail" on the COA. (2) The licensed laboratory shall report the result of the moisture content test on the COA as a percentage. The laboratory shall report the result of the water activity test on the COA and indicate "pass" or "fail" on the COA. If the sample fails water activity testing, the batch from which the sample was collected fails water activity testing and shall not be released for retail sale. Residual Solvents and Processing Chemicals Testing. (a) The licensed laboratory shall analyze at minimum 0.25 grams of the representative sample of cannabis product or pre -rolls to determine whether residual solvents or processing chemicals are present. The licensed laboratory shall report the result of the residual solvents and processing chemicals testing in unit micrograms per gram (µgig) on the COA and indicate "pass" or "fail" on the COA. The sample shall be deemed to have passed the residual solvents and processing chemicals testing if the presence of any residual solvent or processing chemical listed in the following tables in Category I and Category II does not exceed the indicated action Mandatory testing is required in these categories: (1) Cannabinoids; (2) Heavy metals; (3) Microbial impurities; (4) Mycotoxins; (5) Residual pesticides; (6) Residual solvents and processing chemicals; and (7) If tested, terpenoids. (b) Standard operating procedures for the following testing methods: (1) Cannabinoids; (2) Foreign material; (3) Heavy metals; (4) Microbial impurities; (5) Moisture content and water activity; (6) Mycotoxins; (7) Residual pesticides; (8) Residual solvents and processing chemicals; and (a) The licensed laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis and cannabis products goods to determine the cannabinoid profile such as THC; THCA; CBD; CBDA; CBG; and CBN. (b)The licensed laboratory will establish a limit of quantitation (L0Q) of 1.0 mg/g or lower for all cannabinoids analyzed and reported. (c) The licensed laboratory shall report the result of the cannabinoid testing on the COA, including, at a minimum: (1) A percentage for THC, THCA, CBD, and CBDA; When the licensed laboratory reports the result of the cannabinoid testing for harvest batch representative samples on the COA in dry -weight percent, they shall use the following equation: Dry -weight percent cannabinoid = wet -weight percent cannabinoid 1(1— percent moisture 1 100) (2) A percentage for Total THC and Total CBD, if applicable; Milligrams per gram (mg/g) if by dry -weight or milligrams per milliliter (mg/mL) if by volume for THC, THCA, CBD, and CBDA. (4) Milligrams per gram (mg/g) if by dry -weight or milligrams per milliliter (mg/mL) if by volume for Total THC and Total CBD, if applicable; (A) The licensed laboratory shall calculate the total cannabinoid concentration as follows: (i) For concentration expressed in weight: Total cannabinoid concentration (mg/g) = (cannabinoid acid form concentration (mg/g) x 0,877) + cannabinoid concentration (mg/g) LABELING INFORMATION The primary panel must include: A product identifier. This is a general name or description that identifies the item, such as "Cannabis Brownie" or "11 THC/CBD Tincture: California's universal symbol. The universal symbol is clearly visible on the label, printed in black, and measuring at least 0,5" x 0.5" (see example in the previous section). Net weight or volume. The net weight or volume is listed in both metric and U.S. customary units. For example, a cookie's label might read "Net. Wt,1.5 oz. (42,5 g)" while the label for a cannabis -infused beverage might read "8 fl, oz. (237 ml):' The words "Cannabis -infused' This requirement only applies to food and drink products like candies, cookies, brownies, gummies, and beverages. The information panel must include: Manufacturer information, The legal name or registered DBA of the product manufacturer is provided alongside valid contact information (phone number or website). Facility license number UID number, This is the tracking number issued through California's Track -and -Trace system. Refer to your Track -and -Trace login. Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan Batch or lot number, Sometimes called a code number or lot code, this is the unique ID number assigned to a batch of products for the purposes of inventory tracking and traceability, This number is assigned by the product manufacturer, Date of manufacture/packaging, Only one date is required. Make sure to include the month, day, and year—e.g. MFG/PKG 11/16/2020. Expiration or use -by date, If applicable. List of ingredients. Ingredients are listed in descending order by weight or volume. Include any plant ingredients, edible ingredients, flavor enhancers, artificial colorings, carrier liquids, base liquids, and any other consumables included in the product. Allergens, If your item contains any of the major food allergens (soy, milk, eggs, wheat, tree nuts, peanuts, fish, or shellfish), this information must be disclosed on the label separately from the ingredients list, beginning with the words "Contains"—e.g. "Contains peanuts' Nutrition information, This requirement only applies to edibles, All cookies, gummies, drinks, and other edible preparations must list the total fat, carbohydrates, sodium, and sugar per serving in grams or milligrams. CRV recycling information. Beverage manufacturers must follow all state -mandated labeling requirements for beverage containers. More information can be found at CalRecycle. Instructions for preparation and/or use, For example, a label fort gram of dab wax might read, "Add one serving to a dry herb/wax vaporizer or oil rig (low, temp 600 F)" The words"KEEP REFRIGERATED" ar "REFRIGERATE AFTER OPENING;' This disclaimer is required for perishable products only. The words "FOR MEDICAL USE ONLY' This disclaimer must be included if the THC content is too high to be legally sold in the adult -use (recreational) market and is intended onlyforcardholding medical marijuana patients. Government warning statement, All labels must include the following government warning in bold, capital letters: GOVERNMENT WARNING: THIS PRODUCT CONTAINS CANNABIS, A SCHEDULE I CONTROLLED SUBSTANCE, KEEP OUT OF REACH OF CHILDREN AND ANIMALS. CANNABIS PRODUCTS MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. THE INTOXICATING EFFECTS OF CANNABIS PRODUCTS MAY BE DELAYED UP TO TWO HOURS. CANNABIS USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF CANNABIS PRODUCTS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE MACHINERY, PLEASE USE EXTREME CAUTION. In addition, your label must list the cannabinoid content in percentages (e.g. THC: 18%; CBD:1,5%), All products must include the THC and CBD content per package. Edibles and concentrates with designated serving sizes must also list the THC and CBD content per serving, If any other cannabinoids are present at volumes higher than 5%, that information must be included as well. This information may appear on either the primary panel or the information panel. Prop 65 WARNING (ALL CAPS AND BOLD) - Use symbol and this verbiage: Inhalation of this product exposes you to carcinogens including (if only one carcinogen you can use the singular word instead), delta - 9 - THC and (Myrcene if terpenes are tested, and it includes Myrcene), and during pregnancy exposes your child to chemicals, which can affect your child's behavior and learning ability." "When eaten or swallowed, the effects of this cannabis -infused product may be delayed by two or more hours" The disclosure of the type of extraction method that was used, including any solvents, gases, or other chemicals or compounds used to produce the manufactured cannabis product are shown in the ingredients. The name of the independent laboratory that performed the testing The facility will not label as organic any cannabis or manufactured cannabis product unless permission has been granted by the US Department of Agriculture in accordance with the Organic Food Production Act, Reporting One sample of each batch will be retained to uphold Good Manufactured Practices in cases of additional sampling. All labeling samples and testing results are uploaded to the METRC database by the Laboratory that performed the test, where they are stored for a minimum of five years. All labels and packaging must also be reviewed by outside counsel and approved by the Director of Compliance to meet the standards set by the State of California and the Department of Cannabis Control, 2.3.E. HOW THE CANNABIS BUSINESS WILL CONFORM TO LOCAL AND STATE LAWS. SEE NCMC 9.60.290 AND TITLE 18 AS THEY PERTAIN TO DISTRIBUTION. In addition to the Standard Operating Procedures outlined above, the DCC, formerly the BCC has put together several Fact Sheets to assist operators in understanding the regulations pertaining to various hot topics. The Distributor Fact Sheet offers a succinct two -page summary of the regulations applicable to all distributors, We will incorporate this into our position specific training day and post a copy in the distribution portion of the facility as a reminder of the rules applicable to all distributors. .,a:r.wae ra as .019 rntlb+. gnou. 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Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan Additional Requirements per the National City Municipal Code for Distributors: 9.60,290,A Storage and Distribution of Cannabis Goods Mr, Nice Guy's distribution activities shall only encompass distributing and storing store cannabis goods, accessories (paraphernalia) and branded merchandise that is compliant with all regulations, We will not store or distribute non -cannabis goods or non -cannabis accessories or merchandise, 9,60,290,B, Laboratory Testing by a Distributor After taking physical possession of a cannabis goods batch, Mr, Nice Guy will contact contact Varity testing laboratory and arrange for a laboratory employee to come to the facility to select a representative sample for laboratory testing. 9,60,290,C, Mr, Nice Guy will ensure that all cannabis goods are stored separately and distinctly from other cannabis goods in the distribution areas of the Facility by keeping them in separately marked bins and/or shelves. 9.60,290.D, Mr. Nice Guy will ensure that the batch size from which the sample is taken meets the requirements of state law, specifically the testing provisions within the California Code of Regulations. Specifically,19 CCR 15707,15708 provides for the sample sizes based on the product category: < 4.536,92 4.581.28 - 9.071.65 9.117 21 - 13.6078 13.653 13 • 18.143.7 16.189.05 • 22,579.6 Cannabis Flower Batch (19 CCR 15707) < 10 Nunes Ilbsl 10 1- 20 Pounds Iles) 16 20 1-30 Pounds fibs) 23 30.1. 40 Pounds (ate) 29 15,1, 31 8 47 7 63.6 .10 1- 50 Pounds (Ibs) 34 79.5 Note: Sample (0.35%) of total batch (16g minimum). Manufactured Cannabis Products and PreRoll Batch Sample Sizes (19 CCR 15708) includes edibles, concentrates and vape pens < or equal to 50 51-150 151-500 501 . 1,200 1,201 - 3,200 3,201 - 10,000 10,001 - 35.000 35,001 - 150,000 20 32 50 3 9,60,290.E. A Mr. Nice Guy employee shall always be physically present to observe the laboratory employee obtain the sample of cannabis goods for testing and shall ensure that the increments are taken from throughout the batch, The sampling shall be video -recorded, and the recording kept available to state and local authorities for a minimum of 180, pursuant to Title 16, Section 5305 of the California Code of Regulations. ***Please note that the California Code of Regulations was updated and revised such that the appropriate section is now 19 CCR 15305, and the length of time a distributor is required to maintain the video of the testing lab employee is 90 days now, not 180. Mr, Nice Guy will comply with the 180 days retention period per National City law unless amended, 9,60,290.E Mr. Nice Guy will not transport cannabis or cannabis products to a licensed retail facility until and unless it has verified that the cannabis or cannabis products have been tested and certified by a testing lab as being in compliance with state health and safety requirements pursuant to Title 16, Sections 5705, 5710 and 5714 of the California Code of Regulations (and updated code 19 CCR 15705, 15710 and 15714) 2.4. DESCRIBE THE DAY-TO-DAY OPERATIONS IF YOU ARE APPLYING FOR A MANUFACTURING PERMIT. THIS SHOULD INCLUDE AT A MINIMUM THE FOLLOWING CRITERIA: Mr, Nice Guy takes seriously its duty to produce good, clean cannabis products. California has strict requirements for manufacturers and testing to ensure that products are safe for human combustion and consumption, With Federal legalization hopefully right around the corner, Mr. Nice Guy has developed its SOPs with federal legalization and regulation in mind. Specifically, the manufacturing SOPs adopt current Good Manufacturing Practices (cGMP) and will seek GMP certification of its Facility once licensed, 2.4.A. IDENTIFY ALL CANNABIS PRODUCTS MANUFACTURED WITHIN THE PERMITTED PREMISES. Headset, a leading data analytics provider in the commercial cannabis space, recently highlighted the increasing market share pre -rolled cannabis, both infused and non -infused, has experienced over the past year. After reviewing the sales data from our California stores and finding that each store on average sold 50,000 prerolls, developing a pre -roll specialty division in our National City Facility was an obvious choice. According to Headset, pre -rolls make up 11,8%ofthe market share in California, Proprietary & Confidential Information of Mr Nice Guy National City, LLC. Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION A: Business Plan 2.4.A. IDENTIFY ALL CANNABIS PRODUCTS MANUFACTURED WITHIN THE PERMITTED PREMISES. Headset, a leading data analytics provider in the commercial cannabis space, recently highlighted the increasing market share pre -rolled cannabis, both infused and non -infused, has experienced over the past year. After reviewing the sales data from our California stores and finding that each store on average sold 50,000 prerolls, developing a pre -roll specialty division in our National City Facility was an obvious choice. According to Headset, pre -rolls make up 11.8% of the market share in California, 2 2 3 z 3 Pre -Roll Market Share by Market Jan 2021 -Aug 202t CIS Yalet Shwa Another interesting fact we discovered is that 32,4% of pre -roll consumers prefer or purchase infused pre -rolls and another 4,2% prefer cannagars or blunts, another specialty pre -roll that can be infused or not. Given the significant market share of these infused and specialty prerolls, the consumer preference for sativa-hybrid-indica is revealed: 40% of consumers prefer hybrid prerolls, while only 10,3% and 11,8% of consumers prefer sativa or indica prerolls, respectively. Pre -Roll Segment Sales Share Jan 2021 . Aug 202 f Finally, we studied the number of prerolls per pack that consumers prefer and found a market gap at 5 prerolls. As such, we will be producing single pre -rolls, 2,5 gram 5 packs and 5 gram 10 packs of prerolls, both infused and non infused, at our National City Facility. As an additional service in the future, we will also be white labeling and co packing at our manufacturing and distribution portions of the Facility. 2.4.B. DESCRIBE QUALITY CONTROL PROCEDURES. The facility will use standard operating procedures (SOPs) to promote manufacturing practices. 1, Initial preparation: Manufacturing staff will grind cannabis flowers or cannabis trim with machines. 2, Once cannabis is ground, it will be weighed to measure appropriate weight per pre roll, ie, ,5gram or lgram before being placed in the cone/preroll filling machines will he used to produce non infused pre rolls. 3, Manufacturing Staff will also be hand -rolling cannabis concentrate infused pre -rolls, 4, Hand rolled pre rolls will consist of lgram ground flower and .5gram concentrated wax or live resin. Along with high terpene extract (HTE) and Kief, 5. HTE will be coated on the exterior of pre roll before being rolled into powdered Kief, 6, Rework or reprocessing steps (see remediation) 7. The facility will require that all registered employees practice good hygiene and wear protective clothing as necessary to protect the product as well as themselves from exposure to potential contaminants. The manufacturing facility will require employees to follow the protocol for recovery of material including: a.) The facility shall quarantine received material that will be used to produce cannabis pre -rolls, b.) The facility shall inspect materials for defects and contamination and collect the COA of everything that enters the building. c.) Only material that has passed testing will be permitted to continue production d,) When making infused pre -rolls our staff will ensure these products are created in a separate area of the kitchen to prevent cross -contamination of products. CANNABIS/NON-CANNABIS WASTE SECURED, PROPERLY DISPOSED OF, AND MAINTAINED All waste generated from the facility must be properly stored in nonahsorbent, watertight, durable, easily cleanable, galvanized metal or heavy plastic containers with tight -fitting lids. The cannabis waste storage bin/area must be secured to prevent public access. All cannabis waste shall be unrecognizable and unusable as cannabis or a cannabis product at the time of disposal. The cannabis waste storage bin/area must be secured to prevent public access. CANNABIS FACILITY INSPECTION GUIDE Page 18 Improperly maintained waste receptacles and areas can lead to vermin infestations, Maintain the waste receptacles and areas clean and closed and promptly remove all cast-off items, 6, Reporting All quality control reports are stored in the seed -to -sale tracking software, Leaf Logix where they are accessed by drop -down menus tracking the life of the cannabis goods delivered and cannabis -infused products produced. Quality controls are built into daily operations documented in METRC in various documents, forms, and lous as it pertains to and manufacturing practices, (GMP), MASTER MANUFACTURING LOG A master manufacturing log will be created, updated, and stored for each product made within this facility. Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail SECTION A: Business Plan https://cannabis.ca.govlwp-content/uploads/sites/212021/12/Master-Manufactur ing-Protocol-Checklist_211022.pdf All employees who work in the Facility have gone through initial employee training and the scope and areas of training are kept in a training log by the Manufacturing Director. Access to the master manufacturing log is authorized by the Production director. 1, Responsibilities It is the responsibility of the Manufacturing Manager to ensure that the master recipe log is stored safely and updated each time recipes are added or modified. Manufacturing Personnel. The written procedures for personnel include: (1) Disease control. Any individual who by medical examination or supervisory observation appears to have, an illness specified in Health and Safety Code section 113949.2 or an open lesion (e,g., boil, sore, cut, rash, or infected wound), unless covered in accordance with the requirements of Health and Safety Code section 113949.2 shall be excluded from any manufacturing operations until their health condition is corrected. Personnel shall be instructed to report such health conditions to their supervisors. (2) Cleanliness, All individuals working in direct contact with cannabis, cannabis products, components, contact surfaces, and packaging materials shall maintain personal cleanliness in order to protect against allergen cross -contact and contamination of cannabis products while on duty. The methods for maintaining facility cleaning: All cannabis facilities in which cannabis products and their ingredients are prepared or in which multi -use utensils are used shall provide manual or mechanical methods to effectively clean and sanitize utensils. Contact surface areas where cannabis products and their ingredients are prepared and utensils are used shall be clean and sanitized to prevent contamination. Manual or mechanical sanitization shall be accomplished in the final sanitizing rinse by one ofthe following methods: 1, Hot water manual operations in the washing sink by immersion for at least 30 seconds where the water temperature is maintained at 171°F or above. The cleaning log is stored near the wash sink, The methods for maintaining personal hygiene: (A) Wearing clean outer clothing to protect against allergen cross -contact and contamination of cannabis, cannabis products, components, contact surfaces, and packaging materials; (B) Washing hands thoroughly in a hand -washing facility that meets the requirements of section 17209 before starting work, after each absence from a work station, at any time specified in Health and Safety Code section 113953,3, and at any time when the hands may have become soiled or contaminated; (C) Removing all unsecured jewelry and other objects that might fall into cannabis cannabis products, components, equipment, or containers. Hand jewelry that cannot be sanitized shall be removed during periods in which cannabis products are manipulated by hand. If such hand jewelry cannot be removed, it shall be covered by material that can be maintained in an intact, clean, and sanitary condition and that effectively protects against contamination by these objects of cannabis, cannabis products, components, contact surfaces, and packaging materials; (0) Maintaining gloves used in cannabis product handling in an intact, clean, and sanitary condition. Records: (a) A written batch production record is created every time a batch of a cannabis product is manufactured, or a batch of cannabis or cannabis product is remediated. The batch production record shall accurately follow the appropriate master manufacturing protocol, and each step of the protocol shall be performed in the production of the batch, (b) The batch production record shall document complete information relating to the production and control of each batch, including all of the following details: (1) The UID and the batch or lot number of the finished batch of cannabis product and the UIDs of all cannabis or cannabis products used in the batch; (2) The specific equipment and processing lines used in producing or remediating the batch; We have not purchased all of our final processing equipment. Remediation and Failed Testing Procedures: When a batch or batches of cannabis, cannabis concentrate, or cannabis product fails mandatory testing for filth and foreign material, dangerous molds and mildews, harmful microbes, or water activity or moisture content, the following steps must be taken, If a batch fails testing for an analyte type that may be remediated, the licensee has four options: (1) retest if the licensee believes the result was in error; (2) remediate the batch in-house and submit for retesting; (3) transfer the failed batch to a products manufacturing facility for remediation and retesting; or (4) destroy the failed batch via the compliant waste management company- GaiaCA and follow their standard operating procedures to complete this process. The licensee must record all retesting, remediation, and destruction in METRC within 30 days of receiving the final certificate of analysis from the marijuana testing facility that reported the failed test result. Failure to record any retesting, remediation, or destruction within a 30-day window will result in the DCC issuing to the licensee a Final Order of Destruction for the entire failed batch, RECALL PROTOCOL (MANUFACTURING) A cannabis facility shall establish and implement a written procedure approved by the Department for the recall of cannabis and cannabis products that are determined to be misbranded or adulterated in accordance with the requirements of State and local laws and regulations. A Recall protocol provides guidance in the event that a cannabis product that has been sold can be retrieved and returned before that cannabis product causes illnesses, IMPOUNDMENT/QUARANTINE/VOLUNTARILY CONDEMNATION & DESTRUCTION The Director, based upon inspection findings or other evidence may impound, quarantine, or order condemnation and destruction of cannabis goods for the protection of public health. Proprietary & Confidential Information of Mr Nice Guy National City, LLC Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE • - ... . , - .. ail SECTION A: Business Plan The enforcement officer shall impound cannabis goods, equipment, or tools that are found to be, or suspected of being unsanitary or in such disrepair that may become contaminated or adulterated. (4) A statement of the actual yield and the percentage difference from expected yield at appropriate phases of manufacturing as identified in the master manufacturing protocol; Adequate and suitable space shall be provided for the storage of cannabis, cannabis products, and their ingredients, It shall be protected from contamination by storing the cannabis, cannabis products, and their ingredients, in a clean, dry location, where it is not exposed to splash, dust, vermin, or other forms of contamination or adulteration, and at least six inches above the floor. Storing the cannabis goods in an area and in a way that they are protected will reduce the likelihood of contamination. 3. Reporting The master recipe log's updates are sent to the facility director and the kitchen manager as they occur. The Manufacturing manager, as they produce new products and modify old ones, must access the masterbatch log on the external hard drive maintained by the facility. This log is password -protected, and each entry is recorded in a file accessible only to management. The master recipe log maintains the ingredient list, production instructions, quality control instructions, and all amendments to every recipe. TEST ON FORMULATED PRODUCT All product that is finished in our facility is tested at a licensed laboratory, which provides a detailed analysis of the product, its ingredients, and its strength. All employees who work in quality control must be capable of reading a laboratory report and understanding the specific tolerances allowed by the state, Responsibilities It is the responsibility of the Quality Control Director to ensure all employees under their direct supervision understand how the facility provides samples to the independent lab for testing, as well as how infused products are tested via a distributor. Additionally, the Quality Control Director must ensure that cannabis -infused products and non -infused cannabis products are stored separately and labeled accordingly. Lab testing Procedure All formulated products are entered into a testing log before it is provided to the laboratory. After curing and before any processing or packaging, the processing manager, kitchen lead or laboratory rep will make samples from each batch available to an independent laboratory for testing. The sample will be weighed, RFID (METRO Blue Tag) scanned, and all data will be recorded within Leaf Logix prior to being removed from the secured sampling area, The laboratory employee will select and prepare several random samples from every batch to ensure the quality, purity, and consistency of the dose through a statistical approach. The laboratory staff will then test each random sample for harmful microbiological contaminants, mycotoxins, heavy metals, and pesticide chemical residue, In addition, each sample will also be tested for active ingredients including but not limited to cannabinoid profiling for the following: THC, THCa, CBD, CBDa, and CBN, Under no circumstances shall cannabis batches awaiting contamination results and active ingredient analysis be included in a cannabis product or sold to a retail facility prior to the time that the laboratory has provided those results, in writing, to the the facility management team, If samples from a batch are tested and do not fall within state accepted health and safety levels for any of the above -mentioned contaminants or any additional contaminants that the state does not deem for distribution, it is the facilities policy to destroy and remove any contaminated product in a manner consistent with state compliance for the policy for disposal of green waste. Once a batch sample passes the microbiological, mycotoxin, heavy metal and pesticide chemical residue test, the entire batch will be released for immediate manufacturing, packaging, and labeling for transport and sale to a facility. An electronic copy of all test results will be filed by laboratory staff for any batch that does not meet the standards set for microbiological, mycotoxin, heavy metal, and pesticide chemical residue tests.These results will also be sent to facility staff within the same time frame, The laboratory staff will also maintain a comprehensive record of test results and make them available to state and local officials, and or the public, as needed 6, References The independent test lab we work with provides us with guidelines for sample preparation that conforms to the state's regulations, The quality control manager maintains their source documents for preparing samples, along with the requisite forms that must accompany all samples. In the event of a question, the resource documents provided by the lab are helpful, and they also provide a toll -free number for questions. Reporting The quality control manager receives all lab reports for all samples sent out for testing. All lab reports are stored in an external hard drive on -site and once tests are submitted by the laboratory all results are available in METRC connected to the cannabis goods manufactured package ID. All employees are trained to know where to find out the latest state requirements for labeling and all labels are sent to the Compliance Department for approval before they are sent to the production line for retail sales. Responsibilities: It is the responsibility of the kitchen manager to ensure that all labels are securely placed on all work in process and finished products, as well as ensuring the proper content is printed on labels. All labels and packaging are required to be approved by the Director of Compliance. Equipment and Utensils All equipment will be used in accordance with their operating instructions to avoid the adulteration of cannabis products with lubricants, fuel, metal fragments, contaminated water, or any other contaminants, Installation. Equipment shall be installed so as to allow cleaning and maintenance of the equipment and of adjacent spaces. Equipment that is not easily moveable shall meet the state (c) Cleaning, sanitizing, and maintenance. Equipment and utensils shall be maintained in a clean and sanitary condition and kept in good repair Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail SECTION A: Business Plan The quality control program for cleaning, sanitizing, and maintenance of equipment and utensils shall include the following elements, at minimum (1) A detailed, written procedure for cleaning, sanitizing, and maintaining (including calibrating) equipment and utensils; (2) A schedule for cleaning, sanitizing, and maintaining equipment and utensils; (3) A log for documentation of the date and time of maintenance, cleaning, and sanitizing of equipment and utensils; and (4) A procedure for storing cleaned and sanitized equipment, Testing: The net weight on any packaged cannabis good containing of dried flower only shall not be considered inaccurate if the actual weight is within plus or minus 3% of the labeled weight. (1) Manufacturing Account Manager will place the initial order of plant or package tags within ten (10) calendar days of initial credentialing into the track and trace system and shall reorder plant or package tags as needed. (2) The physical receipt of plant or package tags shall be recorded in the track and trace system within three (3) calendar days of receipt as well as entered into the Leaf Logix software, If ordered plant or package tags are not received by the licensee, the licensee shall notify the Department. Moisture Content and Water Activity Testing, (b.) The licensed laboratory shall analyze a minimum of 0.5 grams of the representative sample of dried flower to determine the level of water activity and the percentage of moisture content. (1) The dried flower sample, including pre -rolls, shall be deemed to have passed water activity testing if the water activity does not exceed 0,65 Aw. The laboratory shall report the result of the water activity test on the certificate of analysis (COA) and indicate "pass' or "fail" on the COA, (2) The licensed laboratory shall report the result of the moisture content test on the COA as a percentage, The laboratory shall report the result of the water activity test on the COA and indicate "pass" or "fail" on the COA. If the sample fails water activity testing, the batch from which the sample was collected fails water activity testing and shall not be released for retail sale. Residual Solvents and Processing Chemicals Testing. (a) The licensed laboratory shall analyze at minimum 025 grams of the representative sample of cannabis product or pre -rolls to determine whether residual solvents or processing chemicals are present. The licensed laboratory shall report the result of the residual solvents and processing chemicals testing in unit micrograms per gram (µgig) on the COA and indicate "pass" or "fail" on the COA, The sample shall be deemed to have passed the residual solvents and processing chemicals testing if the presence of any residual solvent or processing chemical listed in the following tables in Category I and Category II does not exceed the indicated action Mandatory testing is required in these categories: (1) Cannabinoids; (2) Heavy metals; (3) Microbial impurities; (4) Mycotoxins; (5) Residual pesticides; (6) Residual solvents and processing chemicals; and (7) If tested, terpenoids. (b) Standard operating procedures for the following testing methods: (1) Cannabinoids; (2) Foreign material; (3) Heavy metals; (4) Microbial impurities; (5) Moisture content and water activity; (6) Mycotoxins; (7) Residual pesticides; (8) Residual solvents and processing chemicals; and (a) The licensed laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis and cannabis products goods to determine the cannabinoid profile such as THC; THCA; CBD; CBDA; CBG; and CBN, (b) The licensed laboratory will establish a limit of quantitation (LOQ) of1.0 mglg or lower for all cannabinoids analyzed and reported. (c) The licensed laboratory shall report the result of the cannabinoid testing on the COA, including, at a minimum: (1) A percentage for THC, THCA, CBD, and CBDA; When the licensed laboratory reports the result of the cannabinoid testing for harvest batch representative samples on the COA in dry -weight percent, they shall use the following equation: Dry -weight percent cannabinoid = wet -weight percent cannabinoid 1(1— percent moisture 1100) (2) A percentage for Total THC and Total CBD, if applicable; Milligrams per gram (mglg) if by dry -weight or milligrams per milliliter (mglmL) if by volume for THC, THCA, CBD, and CBDA, (4) Milligrams per gram (mglg) if by dry -weight or milligrams per milliliter (mg/mL) if by volume for Total THC and Total CBD, if applicable; (A) The licensed laboratory shall calculate the total cannabinoid concentration as follows: (i) For concentration expressed in weight: Total cannabinoid concentration (mglg) = (cannabinoid acid form concentration (mglg) x 0,877) + cannabinoid concentration (mglg) LABELING INFORMATION The primary panel must include: A product identifier. This is a general name or description that identifies the item, such as "Cannabis Brownie" or "1:1 THCICBD Tincture' California's universal symbol. The universal symbol is clearly visible on the label, printed in black, and measuring at least 0.5" x 0.5" (see example in the previous section), Net weight or volume, The net weight or volume is listed in both metric and U.S, customary units. For example, a cookie's label might read "Net, Wt,1,5 oz. (42.5 g)" while the label for a cannabis -infused beverage might read "8 fl, oz, (237 ml);' The words "Cannabis -infused' This requirement only applies to food and drink products like candies, cookies, brownies, gummies, and beverages. The information panel must include: Manufacturer information. The legal name or registered DBA of the product manufacturer is provided alongside valid contact information (phone number or website). Facility license number U10 number. This is the tracking number issued through California's Track -and -Trace system, Refer to your Track -and -Trace login, Batch or lot number, Sometimes called a code number or lot code,this is the unique ID number assigned to a batch of products for the purposes of inventory tracking and traceability. This number is assigned by the product manufacturer, Proprietary & Confidential Information of Mr. Nice Guy National City, LLC. Not for Publication Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan Date of manufacture/packagin{, 0nlyy one date is required. Make sure to include the month, day, and year—e.g. NFG/PKG 11/16/2020, Expiration or use -by date. If applicable. List of ingredients. Ingredients are listed in descending order by weight or volume. Include any plant ingredients, edible ingredients, flavor enhancers, artificial colorings, carrier liquids, base liquids, and any other consumables included in the product. Allergens. If your item contains any of the major food allergens (soy, milk, eggs, wheat, tree nuts, peanuts, fish, or shellfish), this information must be disclosed on the label separately from the ingredients list, beginning with the words "Contains"—e.g. "Contains peanuts:' Nutrition information, This requirement only applies to edibles, All cookies, gummies, drinks, and other edible preparations must list the total fat, carbohydrates, sodium, and sugar per serving in grams or milligrams. CRV recycling information. Beverage manufacturers must follow all state -mandated labeling requirements for beverage containers, More information can be found at CalRecycle, Instructions for preparation and/or use. For example, a label for 1 gram of dab wax might read, "Add one serving to a dry herb/wax vaporizer or oil rig (low, temp 600 The words "KEEP REFRIGERATED" or "REFRIGERATE AFTER OPENING;' This disclaimer is required for perishable products only. The words "FOR MEDICAL USE ONLY: This disclaimer must be included if the THC content is too high to be legally sold in the adult -use (recreational) market and is intended only for cardholding medical marijuana patients. Government warning statement, All labels must include the following government warning in bold, capital letters GOVERNMENT WARNING: THIS PRODUCT CONTAINS CANNABIS, A SCHEDULE I CONTROLLED SUBSTANCE. KEEP OUT OF REACH OF CHILDREN AND ANIMALS, CANNABIS PRODUCTS MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE 0R OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. THE INTOXICATING EFFECTS OF CANNABIS PRODUCTS MAY BE DELAYED UP TO TWO HOURS. CANNABIS USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF CANNABIS PRODUCTS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE MACHINERY, PLEASE USE EXTREME CAUTION. In addition, your label must list the cannabinoid content in percentages (e.g. THC: 18%; CBD;1,5%), All products must include the THC and CBD content per package, Edibles and concentrates with designated serving sizes must also list the THC and CBD content per serving. If any other cannabinoids are present at volumes higher than 5%, that information must be included as well. This information may appear on either the primary panel or the information panel. Prop 65 WARNING (ALL CAPS AND BOLD) - Use symbol and this verbiage: Inhalation of this product exposes you to carcinogens including (if only one carcinogen you can use the singular word instead), delta - 9 - THC and (Myrcene if terpenes are tested, and it includes Myrcene), and during pregnancy exposes your child to chemicals, which can affect your child's behavior and learning ability." "When eaten or swallowed, the effects of this cannabis -infused product may be delayed by two or more hours" The disclosure of the type of extraction method that was used, including any solvents, gases, or other chemicals or compounds used to produce the manufactured cannabis product are shown in the ingredients, The name of the independent laboratory that performed the testing The facility will not label as organic any cannabis or manufactured cannabis product unless permission has been granted by the US Department of Agriculture in accordance with the Organic Food Production Act. Reporting One sample of each batch will be retained to uphold Good Manufactured Practices in cases of additional sampling. All labeling samples and testing results are uploaded to the METRC database by the Laboratory that performed the test, where they are stored for a minimum of five years. All labels and packaging must also be reviewed by outside counsel and approved by the Director of Compliance to meet the standards set by the State of California and the Department of Cannabis Control. 2.4.C. DESCRIBE INVENTORY CONTROL PROCEDURES. INVENTORY CONTROL PLAN The purpose of this SOP is to provide overall guidance on the facility's inventory control plan when producing pre -rolls, both non -infused and infused, Scope The scope of this SOP is for all employees working in the facility who come in contact with plants, harvested products, manufactured products, or work -in -progress products. Prerequisites All employees working in the facility go through initial training which covers the chain of custody of our inventory, Every employee is responsible for ensuring inventory is accounted for, and all records are kept up to date. Responsibilities It is the responsibility of the facility manager to ensure that all protocols for inventory control are followed, It is the responsibility of the internal auditor to ensure inventory is properly accounted for. Procedure The facility will ensure that all inventory of cannabis and manufactured cannabis products is electronically tracked through each stage of processing, from propagation to point -of -sale or disposal. We will accomplish this by electronically tracking and documenting all acquisitions through the California Cannabis Track and Trace tracking system within METRC, in combination with inventory control policies and the 3rd party seed -to -sale tracking system, Leaf Logix, The Leaf Logix system is fully integrated with METRC and provides real-time, 24/7 inventory updates, including a web -based inventory platform that will be always accessible to state regulatory agencies. The facility's facility training program includes detailed standard operating procedures that provide step-by-step instruction for proper utilization of the electronic manifest and inventory control system. Proprietary & Confidential Information of Mr Nice Guy National City, LLC. Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail SECTION A: Business Plan Once the cultivation or processing stage of the supply chain is complete, and the delivery of bulk flower or trim is made, our agents are trained to weigh each batch before logging it into the system and apply labeled stickers to the bin from the shipment in a high -impact structured, copolymer Pelican case, documenting compliance by conducting all steps in clear view of a surveillance camera. Cannabis and manufactured cannabis products will be shown on camera during every part from production to transport. Employees will follow all Good Manufacturing Protocols by maintaining a cleaning log that will track the facility station cleaning processes and locations, All areas in the facility will be cleaned before and after each step of the production process. Employees must also maintain clean hygiene and PPE while working in this facility, including but not limited to short nails with no nail polish, the use of a hair net, beard net, lab coat, and gloves to ensure no cross -contamination of our products. Procedures continued: The Manaoer lead will utilize the master manufacturing plan when manufacturing pre -rolls. Pre -roll" means any combination of the following rolled in the paper: flower, shake, leaf, or kief that is obtained from accumulation in containers or sifted from loose, dry cannabis flower or leaf with a mesh screen or sieve, Infused pre -roll" means a pre -roll into which cannabis concentrate (other than kief) or other ingredients have been incorporated. (a) Our manufacturing team will prepare a written batch production record every time a batch of a cannabis product is manufactured, or a batch of cannabis or cannabis product is remediated. The batch production record will accurately follow the appropriate master manufacturing protocol, and each step of the protocol shall be performed in the production of the batch, (b) The batch production record shall document complete information relating to the production and control of each batch, including allot the following details: (1) The UID and the batch or lot number of the finished batch of cannabis product and the UlDs of all cannabis or cannabis products used in the batch; (2) The specific equipment and processing lines used in producing or remediating the batch; 3 The identity and weight or measure of each component used; (4 A statement of the actual yield and the percentage difference from expected yield at appropriate phases of manufacturing as identified in the master manufacturing protocol; (5) The actual results obtained during any monitoring operation, if the product quality plan identifies any monitoring needed to ensure product safety (6) Documentation, at the time of performance, of the manufacture of the batch, including: (A) The date on which each step of the master manufacturing protocol was performed; and B The initials of the person(s) performing each step; 7) An actual or representative label or other identification of the label to be used or the cannabis product; (8) The actual quantity of the packaging and labels used, and the difference from the expected number to be used, if the cannabis product will leave the manufacturing premises as a final form of cannabis good; (9) Documentation, at the time of performance, that quality control personnel: Procedures continued: Reviewed the batch production record; Reviewed all required monitoring operation(s); Reviewed the results of all tests and examinations, including tests and examinations conducted on components, finished batches of cannabis products, and packaged and labeled cannabis products; and Either approved and released or rejected, the finished cannabis product, including any remediated, repackaged, relabeled or wasted cannabis product; (10) Documentation, at the time of performance, of any investigation identified in the product quality plan or master manufacturing protocol, including investigations into deviations from the expected yield or package and label count. (c) The batch production record will: (1) Contain the actual values and observations obtained during monitoring and, as appropriate, during verification activities; Be as detailed as necessary to provide a history of work performed, and (5) Include the following information: The license number or premises address of the facility at which the manufacturing occurred; The date each step was performed; The signature or initials of the person performing the activity; and The identity of the product, the UID, and the batch or lot number. (a) Our Manufacturing inventory control plan allows for tracking the location and disposition of all cannabis and cannabis products at the licensed premises. (b) Our manufacturing facility will have on -hand inventory checks of the cannabis and cannabis products in the licensed premises with the records in the track and trace system at least once every thirty (30) calendar days. (c) If a licensed manufacturer finds a discrepancy between the on -hand inventory and the track and trace system, the licensee shall conduct an audit, (d) If the inventory reconciliation or the audit conducted reveals a discrepancy that is more than five percent of the documented inventory, the licensed manufacturer shall notify the Department within 24 hours of the discovery. All infused pre -rolls will be correctly labeled and stored separately from the non -infused inventory. The naming convention utilized within Leaf Logix and METRO will also identify infusion status in the naming convention and METRO category. Every time our facility receives a bulk shipment of cannabis flower the manufacturing team will enter the bulk amount into Leaf Logix system, matching the lot and batch numbertothe manifestthatwas delivered. This tracking software also allows the manufacturing team to designate the weights and batch adjustment per pre -roll created, The facility's policy requires any discrepancies to be reported to and investigated by the company's Compliance division, To ensure the facility is solely taking custody of shipments containing cannabis and manufactured products, we will train all agents on how to appropriately take custody of a shipment. Our agents are trained to receive all products in clear view of a surveillance camera to ensure compliance is visually recorded and appropriately documented. Procedures continued: A licensed manufacturer shall reconcile the on -hand inventory of cannabis and cannabis products at the licensed premises with the records in the track and trace system at least once every thirty (30) calendar days. Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION A: Business Plan All shipping manifests are maintained in our companies cloud storage that is encrypted and backed up at a separate location from the facility, we will maintain any manifests for five years, or any other time period stipulated -by the state, These manifests will be accessible at any facility location. Our cloud system provides enough storage to ensure all manifests are maintained. Once the manifest is checked, signed, and received by the agent, we utilize our proprietary point of sale system and barcode scanning system to inventory products. Verified, discrepancy -free RFID tagged packages will be electronically received by the facility thus electronically delivering the cannabis and manufactured products data to Leaf Logix, AB received, incoming inventory is entered or verified within METRC by the receiving agent. With the facilities Leaf Logix trackingand Metrc, inventory control can be monitored and recorded compliantly and efficiently, which will offer accurate seed to sale tracking and real time updates to the state's regulatory agencies. The facility is educated in providing state regulatory agencies with full transparency of products dispensed distribution and dispensaries, and we will continuously work to adapt dynamically to meet any new state laws or regulations proposed. The company will ensure that no cannabis and manufactured cannabis products will go untracked in our inventory, and accurate information related to seed -to -sale tracking will be available to state regulatory agencies 2417 The facility is diligent in maintaining accurate and detailed accounts of every product stored and distributed in the facility. The facility employs trained inventory professionals and merchandising specialists to make sure that our company adheres to as many industries wide auditing and inventory best practices as possible, ensuring that at any given moment we have accurate product lists and specifications for every cannabis and manufactured cannabis products we make available to qualifying patients or caregivers. The facility proudly provides a vast set of resources for the theft and diversion of cannabis inventory and manufactured cannabis products through our facility -wide security camera and 24/7 recording stored on a DVR located in a locked box in the facility. Security agents can handle any instances of theft or diversion in a timely and effective manner and communicate any loss by reporting to the DCC. The facility's policy requires security personnel at a facility to inform local law enforcement of any critical threats to inventory or staff as soon as they occur. We encourage security personnel to develop positive relationships with local Turisdictions to ensure all incidents are handled professionally and appropriately, his is especially essential to reporting internal theft and diversion, empowering our agents to observe and report violations committed b any facility personnel. We encourage all company employees to be diligent in reporting policy violations, theft, and diversion, and policy outlines the strict prohibition of any retaliation against an employee who reports violations. Our goal is to provide employees with a safe, compliant environment, giving them the tools to address concerns in an effective and efficient way. See Security SOP for more details, Retesting: If the failed test was in error and they want to retest the failed batch, they must submit two separate samples from the failed batch for the retesting, The failed batch would be required to then pass two subsequent tests forthe specific analyte categories that originally failed, example: A batch of cannabis concentrate that fails for total yeast and mold would be required to pass two subsequent tests for the required analytes under the category of "dangerous molds and mildew" (including mycotoxin analysis) in order to be transferred to another licensee. Remediation: If the failed batch can be remediated, the licensee may remediate the failed batch in-house or send the failed batch to a products manufacturing facility for remediation and retesting. If the failed batch remains in the same form as the initial failed batch, the licensee must submit two separate samples from that failed batch, and then would be required to pass two subsequent tests for specific analyte categories that originally failed. example: A batch of cannabis flowers that fail for water activity may be remediated by additional drying and curing and would be required to pass two subsequent tests for water activity and moisture content in order to be transferred to another licensee. If the failed batch remaining is not in the same form as the initial failed batch, the licensee must submit a single sample from the resulting remediated batch, The remediated batch would then be required to pass one subsequent round of all required tests for items in its form following remediation (including mycotoxin analysis if the original test failed for total yeast and mold), If the remediated batch, in its new form, fails the subsequent test, it is treated as an "original" failed test and th example: A batch of cannabis flower fails for total yeast and mold, is transferred to a manufacturing facility, and is remediated by hydrocarbon extraction into cannabis concentrate. The new cannabis item (concentrate) would need to pass all required tests for cannabis concentrate, as well as mycotoxin analysis, in order to be transferred to another licensee, e license may begin the retesting or remediation process again, References All employees should refer to the employee handbook for questions on inventory access, employee responsibility for inventory, and shipping receiving and storage SOP's, Also, reference the Master Manufacturing Protocol and Batch Records Protocol during production. Reporting The Facility Director will sign off on all inventory tracking forms and will perform monthly audits. All inventory must be RFID tagged, labeled, and recorded in both Leaf Logix and Metrc. All tags must be attached during production and storage of inventory until it leaves the facility. 2.4.D. DESCRIBE THE EXTRACTION PROCESS, EQUIPMENT AND ROOM IN WHICH EXTRACTIONS WILL BE CONDUCTED. Mr, Nice Guy already has extraction facilities where it can source cannabis concentrates for its infused preroll line, As such, Mr, Nice Guy will not be engaging in extraction activities, 2.4.E. PROVIDE DETAIL AS TO WHETHER THE EXTRACTION EQUIPMENT HAS BEEN REVIEWED AND CERTIFIED BY A PROFESSIONAL ENGINEER OR CERTIFIED INDUSTRIAL HYGIENIST. Mr, Nice Guy will be sourcing all of the component cannabis products, rather than engaging in extraction. Proprietary & Confidential Information of Mr Nice Guy National City, LLC. Nof for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail SECTION A: Business Plan 2.4.F. DESCRIBE THE SANITATION PROCEDURES. Mr, Nice Guy will ensure equipment is maintained and cleaned at appropriate intervals to prevent malfunctions or contamination that would alter the safety, identity, strength, quality, or purity of the cannabis product beyond its established specifications, Mr, Nice Guy will ensure the cleaning and sanitizing of utensils and equipment is conducted in a manner that protects against allergen cross -contact and contamination of cannabis products or product components, cannabis product contact surfaces, or cannabis product -packaging materials. Mr. Nice Guy will ensure single -service articles (such as utensils intended for one-time use, paper cups, and paper towels) are stored, handled, and disposed of in a manner that protects against allergen cross -contact and contamination of cannabis product, cannabis product -contact surfaces, or cannabis product -packaging materials, Equipment, counters, and surfaces for processing will be food -grade and will not be made of substances known to react adversely with inputs being used. Mr. Nice Guy will ensure that all surfaces used for manufacturing/processing, packaging, or storing low -moisture cannabis products are maintained in a clean, dry, and sanitary condition before use. In order to maintain sanitary conditions of utensils and equipment at Mr, Nice Guy's facility, there will be: a) Enough space for placement of equipment and storage of materials at Mr, Nice Guy's facility as is needed. b) Adequate safety lighting in all areas where equipment or utensils are cleaned Furthermore, Mr, Nice Guy's equipment will be of appropriate design and adequate size for its intended use and for its cleaning and maintenance. The procedures defined herein will be adhered to daily/weekly by all manufacturing employees. All equipment and other utensils that come into contact with cannabis or cannabis products will be cleaned and sanitized at the end of the shift during which they are used, All sanitizers and disinfectants used to clean equipment and utensils at Mr. Nice Guy's facility will be registered with the Environmental Protection Agency and used in accordance with labeled instructions. It is the responsibility of the Facility Maintenance Manager, under the discretion of the Lab Manager, to ensure that the surfaces of: Equipment and utensils that have direct contact with cannabis products are clean to sight and touch Cooking equipment and pans that have direct contact with cannabis products are kept free of encrusted grease deposits and other soil accumulations Equipment that do not have direct contact with cannabis products are kept free of an accumulation of dust, dirt, residue and other debris Furthermore, all contact surfaces at Mr, Nice Guy's manufacturing facility will be: Smooth Free of breaks, open seams, cracks, chips, inclusions, pits, and similar imperfections Free of sharp internal angles, corners, and crevices Finished to have smooth welds and joints Mr, Nice Guy will create detailed descriptions of the methods and materials used for cleaning and the methods of disassembling and reassembling equipment to assure proper cleaning and will document all cleaning, sanitization, sterilization, and maintenance of equipment and utensils used at the facility. The Manager will conduct audits on equipment and utensil cleaning and maintenance and related documentation to ensure thorough and adequate cleaning of all equipment and utensils The specific SOP for equipment cleaning and maintenance to be performed by all manufacturing staff is as follows: After the completion of a production batch, manufacturing employees shall: Always wear appropriate personal protective equipment when cleaning and sanitizing equipment and utensils. Protect clean equipment prior to use, Inspect equipment for cleanliness prior to use. Determine if environmental testing of pathogen contamination on equipment and utensils is needed, Disassemble the equipment. Place the parts in the designated tubs, racks, etc. Note: Simple equipment and hand tools are cleaned and sanitized in the same manner, but they do not require disassembly and reassembly. Physically remove product debris by hand or with tools such as screwdrivers, pliers, open-end wrenches, and Allen wrenches, Inspect equipment for missing parts or surfaces that are warn to the extent that debris will accumulate and cause product contamination. Replace or repair parts/surfaces in accordance with the manufacturer's instructions, as applicable, and document what was done in the Equipment Sanitation and Maintenance Log. Apply EPA -registered sanitizers and disinfectants to parts and clean according to manufacturer's directions, Rinse the equipment parts with potable water, Check and reassemble the equipment. Properly store all cleaning and sanitizing chemicals separately from inventory and processing or prerolling areas. Store all cleaned and sanitized equipment, utensils, and single -service and single -use articles: In a clean, dry location In a covered or inverted manner that will protect product contact surfaces from allergen cross -contact and contamination In a self -draining position that allows air drying At least six inches off the ground Never store cleaned and sanitized equipment, utensils, and single -service and single -use articles: In employee break rooms In toilet rooms In rooms holding waste In mechanical rooms Under sewer lines that are not shielded to intercept potential drips Under leaking water lines including leaking automatic fire sprinkler heads or under lines on which water has condensed Under open stairwells Under other sources of contamination Proprietary & Confidential Information of Mr. Nice Guy National City. LLC Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE • - .. .. - .. . - - aid SECTION A: Business Plan Keep single -service and single -use articles in the original protective package until use, Document and record all equipment cleaning and maintenance in the Equipment Sanitation and Maintenance Log. The Manufacturing Manager shall ensure that all employees are performing this SOP on a routine basis, and shall perform a daily inspection of the Equipment Sanitation and Maintenance Log to ensure the fallowing are entered correctly: Equipment manufacturer information. The date the equipment was put into service, if known. The date and time of the cleaning/maintenance. A detailed description of the cleaninglmaintenance. Employee name and identification badge number. 2.4.G. HOW THE CANNABIS BUSINESS WILL CONFORM TO LOCAL AND STATE LAWS. SEE NCMC 9.60.310 AND TITLE 18, AS THEY PERTAIN TO MANUFACTURING. As described above throughout this Section 2.4, our manufacturing SOPs will conform to all State laws, Since we are not engaging in extraction, National City Municipal Code Section 9.60.310 does not apply to our operations. We will not be using any compressed gasses at our Facility. Mr, Nice Guy will create detailed descriptions of the methods and materials used for cleaning and the methods of disassembling and reassembling equipment to assure proper cleaning and will document all cleaning, sanitization, sterilization, and maintenance of equipment and utensils used at the facility. The Manager will conduct audits on equipment and utensil cleaning and maintenance and related documentation to ensure thorough and adequate cleaning of all equipment and utensils The specific SOP for equipment cleaning and maintenance to be performed by all manufacturing staff is as follows: After the completion of a production batch, manufacturing employees shall: Always wear appropriate personal protective equipment when cleaning and sanitizing equipment and utensils. Protect clean equipment priorto use, Inspect equipment for cleanliness priorto use. Determine if environmental testing of pathogen contamination on equipment and utensils is needed, Disassemble the equipment. Place the parts in the designated tubs, racks, etc, Note: Simple equipment and hand tools are cleaned and sanitized in the same manner, but they do not require disassembly and reassembly. Physically remove product debris by hand or with tools such as screwdrivers, pliers, open-end wrenches, and Allen wrenches. Inspect equipment for missing parts or surfaces that are worn to the extent that debris will accumulate and cause product contamination. Replace or repair parts/surfaces in accordance with the manufacturer's instructions, as applicable, and document what was done in the Equipment Sanitation and Maintenance Log. Apply EPA -registered sanitizers and disinfectants to parts and clean according to manufacturer's directions. Rinse the equipment parts with potable water. Check and reassemble the equipment. Properly store all cleaning and sanitizing chemicals separately from inventory and processing or prerolling areas. Store all cleaned and sanitized equipment, utensils, and single -service and single -use articles: In a clean, dry location In a covered or inverted manner that will protect product contact surfaces from allergen cross -contact and contamination In a self -draining position that allows air drying At least six inches off the ground Never store cleaned and sanitized equipment, utensils, and single -service and single -use articles: In employee break rooms In toilet rooms In rooms holding waste In mechanical rooms Under sewer lines that are not shielded to intercept potential drips Under leaking waterlines including leaking automatic fire sprinkler heads or under lines on which water has condensed Under open stairwells Under other sources of contamination Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Operating Requirements DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE •• - 11 • i SECTION C: Safety Plan C.1 SAFETY PLAN PREPARED Prepared by: Prepared by Thomas P. Johnson of Post Alarm Systems, Alarm Company Employee Registration No. 60712, licensed by the California Bureau of Security and Investigative Services. • Commercial Security Systems • Intrusion/ Burglar Systems • Fire Alarm Systems • Video Surveillance • Access Control Systems LTd NFPA® NATIONAL FIRE PROTECTION ASSN. Since 1956 ALARM SYSTEMS Please be advised that the following document is not a public record and is protected from disclosure pursuant to California Government Code § 6245(k). The Public Records Act ("PRA") provides that certain documents and records may be disclosed for public inspection, However, the PRA is not unlimited. Rather, certain record may be withheld, including those records, "...the disclosure of which L] is exempted or prohibited pursuant to federal or state law, including, but not limited to, provisions of the Evidence Code relating to privilege. "Copyright protection is incorporated into the Public Records Act via Government Code § 6254(k). In addition, trade secrets are considered privileged information under Evidence Code § 1060, which is incorporated into the PRA's exemptions through Government Code § 6254(k), The term "Trade secret" is defined as information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy," (Cal. Civ, Code § 3426,1(d),)The purpose of this privilege is to protect information that is essential to the continued operation of a business or industry from disclosure to the public, including but not limited to the business's competitors. The materials contained within the license application, including but not limited to the Standard Operating Procedures and Operating Plans for the operation of this Cannabis Facility are protected as privileged information and shall not be disclosed pursuant to Government Code § 6254(k). In the event there is a request to release the document to the public, please promptly notify the applicant and allow him or her the opportunity to defend the application from disclosure, at his or her own expense, before providing it to the public. Please feel free to contact our office with any additional questions. Exhibit C Stem of Security and fiivoingativ.8.eviae ICa Westdocremsbstes CA 86111114,202 02141131341160 ALARM COMPANY EMPLOYEE nora.Ihrml Po -spa i70Mly Firm NepiepOia+ No ACE80712 F.gri 08131y2018 THOMAS PATRiCK JOHNSON 21416 POPLMW OOO LAKE FOREST, CA 92630 i Post &L.Nlt SWUM Anne A..., ,V en Thomas P. Johnson Inlet Smutty Camaltaat olW 7/9 261 91.11 Cell 626 2.02 7621 IlohnSorv2,.Co�tciorm tom Cowan IONic 91 L k Um* St •!,cola. CA 9100e !Pita 011kc 1S0114.e .14,1 eu+Y!-0•Cam atm. W Sled PostAIann.com The system installation and monitoring service will be provided by a UL Listed and Accredited company, All formal Fire Plans to be submitted and approved by the local Fire Authority, Post Alarm is listed by Underwriters Laboratories as a certified company for: Protective Signaling Services: S5606-1 Mercantile Alarm Systems: BP8577-1 Police Station Connected Mercantile: BP4913-1 Post Alarm Systems California State Licenses Alarm license - AC01843 C-10/ C-7 License - 670585 Alarm Company Qualification - ACQ406 Post Alarm Systems -Additional Distinction for Optimal Security Every employee of Post Alarm Systems has to go through a rigorous background check during the hiring process that includes a polygraph, Post Alarm is the only known company in the security industry that requires a polygraph test in addition to the drug test, credit check, DMV check, and fingerprint check, Post Alarm is a member of: National Fire Prevention Association Southern California Fore Prevention Officers Association Foothill Fire Prevention Officers Association California Alarm Association California Automatic Fire Alarm Association Post Alarm Systems is one of few privately owned companies that has UL Listing for v Monitoring and installation of Fire Alarm Systems: UL Listing- UUFX.S5606. Proprietary & Confidential Information of Mr Nice Guy National Cily. LLC. Not for Publication Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION C: Safety Plan C.2 FIRE PREVENTION AND SUPPRESSION, FIRE EXTINGUISHER LOCATIONS, EVACUATION ROUTES AND ALARM SYSTEMS • .•'.:'.4.x+.Zrd.x.9C .uC/ N�:!..•2.wa.R.*L::w .. *Break Room 240 SF Retail Area 1,063 SF ty ATV/ ram// Public RR 67SF•• • FRONT CUSTOMER ENTRANCE VENDOR ENTRANCE/EMT WPM 1116MM S OFMUM' PROOIItr Proprietary & Confidential Information of Mr Nice Guy National City. LLC. Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749 460E-A1DF-66191394E 6C' _ _ _ ail SECTION C: Safety Plan C.2 FIRE PREVENTION AND SUPPRESSION, FIRE EXTINGUISHER LOCATIONS, EVACUATION ROUTES AND ALARM SYSTEMS Fire Life Safety Plan: This facility does have an existing sprinkler system, An Updated Fire Plan will be submitted to the City. ► Policies, Training and Procedures Incident Reporting ► No Hazardous Materials Stored 0n Site Ability to remain secure during power outage and ensure all access ► doors are not solely controlled by an electronic access panel that locks are not released during a power outage. ► Fire Alarm and monitoring system including name and contact for alarm company is identified ► Assessment of Facilities Fire & Safety Evacuation Plan and Emergency Egress APPLICABLE BUILDING CODES ► 2016 California Building Code (CBC) 2016 (Table 504.3, 504.4 and 506.2) ► California Fire Code (CFC) ► 2016 California Mechanical Code (CMC) ► 2016 California Plumbing Code (CPC) ► 2016 California Electrical Code (CEC) ► NFPA 72, NFPA 13, NFPA 48, NFPA 58 ► AB 276 SUMMARY OF MR. NICE GUY'S OPERATION AND BUILDING INFORMATION Business Name: Mr, Nice Guy National City, LLC Summary: Mr. Nice Guy is applying to operate as a distribution, infused preroll and storefront retail business, Storage of product will be supervised and secured as required by National City during business hours and within a vault inside a secured and monitored storage room outside of regular business hours. General Manager: Email: Phone: Business Address: 705 Civic Center Drive, National City, CA Property Type: Industrial/Manufacturing Building Size: Lot Size: 213,123 Construction Type: III (please ask architect if A or B) Fire Sprinklers: Yes Fire Alarm System: Yes HVAC: Packaged A/C Unit Occupancy: M Occupancy Number of Stories: 2 Maximum Height: Number of Exits: Major Intersection: Harbor x Civic Center Closest Fire Hydrant: Across McKinley approximately 80 feet from building There will be NO EXTRACTION. NO SOLVENTS, NO HAZARDOUS MATERIALS> NO HIGH PILE STORAGE, FIRE LIFE SAFETY PLAN: The existing building has a sprinkler system SUPPRESSION: Provide approved portable fire extinguishers readily available rated Class 2A located no further than 75-linear feet from each other. Provide a yearly fire inspection certification for each portable fire extinguisher. ' HVAC: Existing HVAC system is a 5-ton AC rooftop package unit serving the office area only. The rated CFM flow rate is found to be 2,000 CFM > that 2,000 CFM. A duct detector is required by the California Fire Code. ' Code Number - 907,2,13,1,2 Duct Smoke Detectors are required for HVAC units that are greater than 2000 CFM, ODOR CONTROL: Cannabis facilities will install and maintain appropriate ventilation and filtration systems to eliminate odor nuisance standards set forth by the City of NATIONAL CITY and governing jurisdiction. Generally, the standards may require that the odor of marijuana must not be perceptible at the exterior of the building, at the licensed premises or at any adjoining use of the property. Enhanced building security will not interfere with existing measures and will by no means impede egress for the facility's occupants or firefighters in the event of an emergency. ' Doors, windows, and roof hatches will remain secured but can be easily opened from the inside to allow exit in the event of an emergency. Electronic access control will not interfere with the existing components. All locking hardware on doors (interior or exterior) will meet the minimum requirements for exiting. EMPLOYEE FIRE SAFETY TRAINING New Employees will be screened, trained and evaluated to perform the essential functions of their specific job duties, Fire Safety Policies will be discussed with the employees, emphasizing fire safety is fundamental to the way the company conducts its operations. New Employees will be knowledgeable and well versed in Fire Safety rules and regulations, These regulations will be discussed at periodic safety meetings to ensure all employees are able to demonstrate the necessary Fire Safety knowledge. Emergency alarms will also be discussed such as the audible and visible, and shall be versed in handling alarm situations, Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION C: Safety Plan ASSESMENT OF FACILITY'S FIRE SAFETY Consider all possible fire, hazardous material, and inhalation issues /threats ► EXITS AND EXIT SIGNAGE, EGRESS ► Provide all exits shall be in accordance with Table 1006.2,1 and Table1006.3,2 (2) and Section 1017,2 of the CFC. The means of egress shall be clear and visible and cannot be concealed in any way. Exit egress doors are shall have the swing in of the door in the direction of egress travel. Provide illuminated exit signs that are readily visible from any direction of egress travel. Provide intermediary exit signs may also be required per Section 1013 of the CFC. Provide battery back light for the exit path of travel. Lighted path of travel must be illuminated at least 1-FC. ► Address; Visible from Street Emergency Lights: Provided and supplemented by shortterm temporary emergency backup system o Enhanced building security will not interfere with existing measures and will by no means impede egress for the facility's occupants or ► firefighters in the event of an emergency. Doors, windows, and roof hatches will remain secured but can be easily ► opened from the inside to allow exit in the event of an emergency. Electronic access control will not interfere with the existing components. All locking hardware on doors (interior or exterior) will meet the minimum requirements for exiting. EMERGENCY EVACUATION & FIRE EXTINGUISHERS iV MOUNTING Portable fire extinguishers other than wheeled types shall be securely installed on the hanger or in the bracket supplied or placed in cabinets or wall recesses. The hanger or bracket shall be securely and properly anchored to the mounting surface in accordance with the manufacturer's instructions, Wheeled -type fire extinguishers shall be located in a designated location. Fire extinguishers having a gross weight not exceeding 40 lbs (18,14kg) shall be installed so that the top of the fire extinguisher is not more than 5 ft, (153m) above the floor. Fire extinguishers having a gross weight greaterthan 40 lbs, (18,14kg) (except wheeled types) shall be so installed that the top of the fire extinguisher is not more than 3-1/2 ft (107 m) above the floor. In no case shall the clearance between the bottom of the extinguisher and the floor be less than 4 in, (10,2 cm), Extinguishers shall be installed on hangers, brackets or in cabinets unless the extinguishers are of the wheeled type, Cal Code Regs, tit, 19, §567..3 and §567.6 V. SERVICING Fire extinguishers shall be inspected at least monthly by the building owner, occupant, or his/her authorized agent.. Cal Code Regs., tit, 19, §574,1. Fire extinguishers shall be subjected to maintenance annually or immediately after use or when specifically indicated by an inspection oratthe time of hydrostatic test For purposes of maintenance, hydrostatic tests required during the same calendar year shall be performed at the time of the annual maintenance or recharge.. Cal Code Regs„ tit 19, §575,1 Every 6 years stored pressure dry chemical and dry powder fire extinguishers that require a 12 year hydrostatic test shall be discharged, emptied and subjected to the applicable maintenance procedures as specified by the manufacture's requirements.. Cal Code Regs„ tit, 19, §575.4 VITAGGING, MARKING AND LABELING Each fire extinguisher that has undergone annual maintenance shall have an Annual Maintenance Tag attached in accordance with Cal Code Regs., tit 19, §596, Each extinguisher that has undergone maintenance, which includes internal examination or has been recharged, shall have a Verification of Service Collar attached in accordance with Cal. Code Regs, tit, 19, §596. Exception, Cartridge/cylinder-operated fire extinguishers do not require a Verification of Service Collar All low pressure fire extinguishers successfully passing a hydrostatic test shall have a hydrostatic test label affixed For high pressure cylinders (le„ CO2) passing a hydrostatic test, the month and yearshall be stamped in accordance with the requirements set forth by D,O.T Recording (stamping) shall be placed only on the shoulder, top head, neck, or footring (when so provided) of the cylinder. FIRE EVACUATION ROUTES GENERAL EVACUATION PROCEDURES In the event of an emergency threatening the safety of employees and visitors at Mr. Nice Guy, a building evacuation may be necessary. All of Mr. Nice Guy staff will be apprised of the following evacuation procedures. Mr, Nice Guy fire evacuation plan consists of the following procedures, subjecttothe review and approval of the San Diego County or National City Fire Chief or designee. All Mr. Nice Guy staff should plan and discuss the following evacuation procedures; EMPLOYEE RESPONSIBILITIES Anyone that observes an emergency condition or situation should call 911. All regular staff will direct any temporary employees, contractors, vendors, or other visitors to the proper exits and routes to the meeting places. Staff will take the following evacuation actions: Take the proper evacuation routes, which are the shortest routes to the outside of the building. Identify two escape routes, since one exit might be blacked by fire, or other obstructions. Enact safety procedures unique to each area of the building; and After evacuating, proceed around the perimeters of the main building complex to the designated "Assembly Area.' Proprietary & Confidential information of Mr. Nice Guy National City. LLC. Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE -- - -.. -- SECTION C: Safety Plan MANAGER RESPONSIBILITIES ► Perform a sweep of the building prior to exiting the building to ensure that all personnel have safely evacuated. ► Confirm all perimeter doors are closed and locked, precluding unauthorized and unsafe entry by others; and ► Confirm that any occupant with a disability is safely assisted or removed from the building and taken to the Assembly Area, ASSEMBLY AREAS Primary Assembly Area: East exterior of the building in the parking lot Secondary Assembly Area:In the event the Primary Assembly Area is compromised, evacuees will be directed to assemble at a safe location and distance from the building. Upon arriving to the Assembly Area, immediately reportto the Manager who will: ► Cross check the "Emergency Evacuation Accountability Sheet" as well as the "Visitor Sign in Sheet" noting if all building occupants are accounted for. ► Write in the names of any visitors, temporary associates, or new employees that are not on the list. o Provide first aid assistance to anyone who was injured during the evacuation; and ► Monitor the incident and communicate with both the evacuees and emergency response personnel and await further direction before allowing the evacuees to leave the premises or re-enter the premises. FIRE EVACUATION PLAN Emergency Egress or Escape Routes The emergency egress and escape routes are indicated on the facility site plan (See below). If an evacuation is necessary during an emergency, all occupants will exit the building and assemble in the parking lot east of the building in a timely manner, If an emergency requires a "defend in place" response, all windows and doors will be closed, and the HVAC system will be turned off to prevent outside air from entering the building. Procedures for Employees Who Must Remain to Operate Critical Equipment Before Evacuating Since there is no extraction on site, no critical equipment requiring special attention by employees will be present in the building. Therefore, no employees will be required to remain inside to operate critical equipment before evacuating. Procedures for Assisted Rescue for Persons Unable to Use the General Means of Egress Unassisted - Assisted rescue of person(s) unable to use the general means of egress unassisted during an evacuation will be performed by the Manager or his designated employees. EVACUATION ROUTES AND PROCEDURES FOR ACCOUNTING FOR EMPLOYEES AND OCCUPANTS AFTER EVACUATION In the event of a building evacuation, the Manager will direct the occupants of the building to the closest exit and assemble in the parking lot east of the building. Once the evacuated occupants are assembled in the designated assembly area, the Manager, or his designated employees, will confirm that all building occupants are accounted for, PERSONNEL RESPONSIBLE FOR RESCUE OR EMERGENCY MEDICAL AID The Manager will be responsible for rescue and emergency medical aid, with the assistance of CPR and First Aid certified Security personnel. PREFERRED/ALTERNATIVE MEANS OF NOTIFYING OCCUPANTS OF A FIRE OR EMERGENCY The primary method of notifying both employees and customers of a fire or emergency will be through verbal communication as the space being occupied is quite small. An alternative means of notifying occupants of the building during a fire or emergency will be accomplished using cell phone calls and/or group text messages. A manual alarm will also sound Preferred and Alternative Means of Reporting Fires and Other Emergencies to Fire Department or Designated Emergency Response Organization The preferred means of reporting fires and other emergencies to the fire department will be through the inhouse landline 9-1-1 phone system. An alternate means of communicating a fire or emergency to the fire department will be using cell phones and dialing (619) 336-4550. Personnel Who Can Be Contacted for Further Information or Explanation of Duties Under the Plan The Manager will be the point of contact for further information or explanation of duties under the plan. DESCRIPTION OF EMERGENCY VOICE/ALARM COMMUNICATION SYSTEM ALERT TONE AND PREPROGRAMMED VOICE MESSAGES An emergency voice/alarm communication system with an alert tone with pre-programmed voice messages is not available at this facility. If required by the San Diego County or National City Fire Department as a condition of licensing approval, Mr. Nice Guy will install such a system. Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE . . . . . •.1 -• ail SECTION C: Safety Plan AISLES ► Provide clear aisles to facilitate rapid evacuation of occupants and provide emergency egress in the event of an emergency. Provide aisles with a minimum clear width of 36" and 44" wide where required as part of the accessible path for exit corridor and final review by the Building Officials. ► ELECTRICAL WIRING, EXTENSION CORDS, APPLIANCE, LIGHTING ► Provide sign at door of ELECTRICAL ROOM ► Provide warning safety signed in the areas of volatile storage cabinets and extraction pods, ► Electrical panels and electrical disconnect switches must be accessible at all times and with a clearance of 30 inches wide(wider for panels and equipment that exceeds 30 inches in width), 36 inches deep, and 78 inches high is required to be maintained free from storage. ► Provide good maintenance and repair of exposed wiring, open junction boxes, or damaged equipment that could present an electrical shock or fire hazard, ► Provide power strips with built-in over current protection ("circuit breakers") are allowed, provided they are plugged directly into a permanent electrical receptacle. Power strips may not be plugged into additional power strips (daisy chaining), A power strip's cord may not be run through walls, above ceilings, or under doors or floor coverings, ► If power strips show evidence of physical damage, they must be replaced, ► Extension cords may only be used to provide temporary power to portable electric appliances. Extension cords may not be used as a substitute for permanent wiring, and may not be affixed to structures, extended through walls, ceilings or floors, or under doors or floor coverings, Multi -outlet extension cords that do not have built-in over current protection ("circuit breakers") are not allowed, If extension cords show evidence of physical damage, they must be replaced immediately. ► Flammable solvents used for extraction will be stored outside and away from any electrical equipment. In the Extraction Booth all electrical components will be C1D1 rated for safety, PREMISE IDENTIFICATION Post address identification on the front of the Building per the Fire Department, EMERGENCY POWER SYSTEM 90-minute emergency lighting battery power inverters for ► emergency life safety exit lights Burglar Alarm will be sized to power for a minimum 24-hours after power failure. Access Doors: Are not Mag Locks (Magnetic Locks), ► In a power outage, all doors remain locked, and do not release. There is free egress for anyone inside. There is a Key Override, so that an Owner or Manager can gain access from the outside during power outage. And there is a Knox Box, for Fire to gain Access, FIRE DEPARTMENT ACCESS ► Buildings/facilities must have at least one all-weather road that is wide enough and strong enough to support the size and weight of fire department apparatus. Roads must extend close enough to buildings to allow for firefighting operations. Roads may have special requirements for "fire lane" signage to disallow parking. A means for turning fire department apparatus around may be required for roads that contain dead ends or no outlet, Gates or barricades that obstruct roads must be approved by the fire department ► All required exterior doors must remain operable for emergency access by firefighters. Eliminating the function of any exterior doors requires prior approval that cannot be granted in every circumstance, and where allowed,the door must be marked with a sign stating ► THIS DOOR BLOCKED, ► Certain equipment rooms contained within a building may require identifying signage to aid firefighters. Rooms containing fire protection equipment (fire alarm panels, fire sprinkler valves, etc,) Rooms containing controls for air-conditioning equipment Rooms containing utility equipment for gas or electrical service Fire Dept access for the facility is provided via CIVIC CENTER DRIVE with multiple access pathways FIRE HYDRANTS Located on: CIVIC CENTER DRIVE and MCKINLEYAVE 0 4 as 5' >osc;v;� Vari°oar Center pr rb 9 tY Cq 97 s0 • Civic Censer Dr. Civic Center Dr. 9 Proprietary & Confidential Information of Mr Nice Guy National City. LLC. Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE SECTION C: Safety Plan FIRE PREVENTION, SUPPRESSION, HVAC, ODOR CONTROL AND ALARM SYSTEM A Fire Sprinkler System Monitoring System is installed. Systems and will be monitored by Post Alarm Systems. ► New Fire Monitoring Plan will be submitted during Tenant Improvements. The facility will support the existing fire suppression system with a Fire Monitoring System: ► Panel ► Wireless Communicators New Fire Alarm Equipment List (1x) Silent Knight 6700 Addressable Fire Alarm Control Panel - To replace existing non working fire alarm panels in front closet (1x) NAPCO Fire Digital Cellular Radio Communicator: Required by Costa Mesa Fire Department - by Fire Alarm Control Panel. (1x) Silent Knight Addressable Smoke Detector by Fire Alarm Control Panel (1x) Silent Knight Remote Annunciator Keypad that is surface mounted and has a trim ring - front office entrance area (1x) Silent Knight Addressable Pull Station - By front entrance (ix) Horn Strobe - White Cover - by front office entrance (1x) Horne Strobe - Red Cover - Outdoor Model to replace existing Red Horn (Only) in the Rear of the building (2x) Silent Knight Addressable Mini Input Module • (1) Water -flow Connection - for Fire Riser Water -flow Switch • (1) OS&YTamper Connections - for OS&YTamper Switch to be installed by others (1x) Fire Device Wire Runs with Conduit as Needed - Plenum wire (1x) Scissor Lift Rental (1x) Guadalupe Fire Department Submittal Documentation with CAD Drawing based on Drawings provided October2020 by Architect, FIRE ALARM REMOTE ANNUNCIATOR HORNS & STROBES _at .,.a FIRE ALARM COMMUNICATOR REMOTE ANNUNCIATOR C.3 ACCIDENT AND INCIDENT REPORTING PROCEDURES Objective: The purpose of this standard operating procedure is to ensure that all employees are aware of the protocol for reporting workplace incidents (specifically, accidents, near misses, occupational diseases, and dangerous occurrences), and to conduct appropriate investigations to mitigate any potential workplace risks, Introduction: By reporting workplace mishaps, worker safety is improved. Additionally, the investigation reveals the necessary safety measures to be implemented to prevent such accidents from occurring in the future. Incident Reporting Procedures Respond Immediately- Employees should immediately tell their supervisors of any accidents or injuries. The supervisor's first obligation is to ensure that appropriate medical care or first aid is administered. Additionally, if the hazard remains, the supervisor must swiftly eliminate it. Discover the Facts - After the initial response has been finished, an investigation team should perform a full on -site accident investigation. This should occur shortly after the incident, when the situation is still fresh in the minds of individuals involved, The following items should be reviewed: Date, time, and specific location of incident Names, job titles and department of employees involved and immediate supervisors Names and accounts of witnesses Events leading up to incident What the employee was doing at the moment of the accident Environmental conditions (e.g, slippery floor, inadequate lighting, noise, etc.) Circumstances (including tasks, equipment, tools, materials, PPE, etc.) Specific injuries (including part(s) of body injured, nature and extent of injuries) Type of treatment for injuries Damage to equipment, materials, etc Analyze - Once you've established how, you must ascertain why. This is crucial for the development of an effective control strategy. Among the causes are the following: Primary causes (ex,, a spill on the floor that caused a slip and fall) Secondary causes (ex,, Employee not wearing appropriate work shoes or carrying a stack of material that blocked vision) Other contributing factors (e.g., burned out light bulb in the area) Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION C: Safety Plan Corrective Action Plan - Recommendations for corrective action may contain both immediate and long-term corrective actions, such as the following: ► Employee training on safe work practices ► Preventive maintenance activities that keep equipment in good operating condition ► Evaluation of job procedures with a recommendation for changes ► Conducting a job hazard analysis to evaluate the task for any other hazards and then train employees on these hazards ► Engineering changes that make the task safer or administrative changes that might include changing the way the task is performed. Reporting -Supervisors must complete 'Employers Report of Occupational Injury or Illness" and submit a completed copy to Human Resource, Human Resources shall next provide the Workers Compensation Provider with the Employers Report of Occupational Injury or Illness, lakki Hernandez, our Director of Compliance has also prepared a 20-page Injury, Illness and Prevention Plan in accordance with OSHA and Cal -OSHA, This IIPP includes the following topics and can be furnished to National City upon request: Responsibility: Management Commitment and Assignment Responsible Compliance Communication Safety Policy Statement and Roles Individual Cooperation Security Officer Duties Employee Responsibility Safety & Health Training General Workplace Security & Safety Safety Suggestions Periodic Safety Meetings Accident Prevention Policy Self Responsibility Safety Rules for All Employees Safety Meetings Hazard Assessments Hazard Identification and Classifications Hazard Inspections Safety Audits Corrective Action Records OSHA and Cal -OSHA Reporting Incident Investigations C.4 WASTE MANAGEMENT LOCATIONS & PROCEDURES CANNABIS WASTE MANAGEMENT Damaged Goods: Our inventory team will manually inspect every product to be sold at our store to ensure that no damaged or contaminated products are sold at our store. As an initial matter, our inventory team will review the Certificate of Analysis for each batch of products upon arrival. If there are any pesticides or contaminants discovered in the Certificate of Analysis, the shipment will be returned or destroyed after contacting the distributor or manufacturer of the products. After review of the Certificate of Analysis, our inventory team will then review the packaging of every single product to ensure that all of the products are properly packaged with the taping or adhesive still intact, Any products which have been tampered with or which no longer are in there proper packaging will be returned or destroyed, Many of the actual products to be consumed by our customers are not visible without breaking the packaging, Therefore, our inventory team will conduct spot checks on all the products delivered to us to ensure the products do not contain any contaminants or other foreign substances, The spot checks will be conducted via visual inspection (e.g,, for mold, leaks, cracks) and also sending products to our own third -party testing facilities. Any damaged or contaminated products will be destroyed and the distributor contacted immediately, LOCATION: Or store will dispose of cannabis waste in a manner that ensures it is unusable and not diverted, Cannabis waste will be disposed of and stored in the limited access section of the inventory room in a locked waste receptacle provided by our cannabis waste disposal vendor Cannabis Waste Solutions, The factthatthe (1) locked waste receptacle will be kept in a (2) locked area (3) within the limited access inventory room will mean that there are 3 levels of security to open up the waste receptacle. Non -cannabis waste and recyclable waste will be disposed of in a dumpster on -site, Waste receptacles are in each of the cannabis storage rooms as the waste bins cannot be shared amongst licensees per the DCC, CANNABIS GOODS SUBJECT TO DISPOSAL The following cannabis products will be disposed of according to our Standard Operating Procedure: Any returned cannabis flower or cannabis product including but not limited to edibles, pre -rolls, and topicals by a customer, Any empty or damaged packaging that is used to contain cannabis goods. Cannabis goods that have passed their expiration date. Cannabis goods that fell onto the floor or have been otherwise contaminated, Any cannabis good abandoned on the premises (left behind by a customer) may not be re -sold and must be disposed of as cannabis waste. Proprietary & Confidential Information of Mr, Nice Guy National City, LLC Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE SECTION C: Safety Plan DISPOSAL PROCEDURE The destruction of cannabis goods prior to disposal will be done in accordance with 16 CCR 5054 and recorded on video. First, prior to the destruction of any cannabis, a General Manager or Co -Manager will be notified for the reason for disposal. The manager will then record the batch number and product information from which the product came from in our Retail Cannabis Disposal Log. Then once approved for destruction, the cannabis goods intended for disposal will be destroyed, at a minimum, by removing the goods from any packaging or container and rendering them unrecognizable and unusable. Whenever practicable, we will use a destruction method that is environmentally friendly and will result in compostable cannabis waste, For example, cannabis flower will be rendered unusable by grinding the flower and incorporating it with yard waste so that the resulting mixture is at least 51% non -cannabis waste by volume. After initially rendering the waste unusable, the cannabis waste will be placed in a 20 gallon secure polyethylene container provided by Waste Vendor and placed within a locked area within the inventory room for later pickup by Waste Vendor, At the time of pickup, the Waste Vendor will spray a proprietary solution on the cannabis waste to further render the cannabis unusable. The non -toxic fluid is added to saturate the biomass material. Th is fluid changes the color, taste, and texture of the biomass and the chemical makeup of the biomass. The active ingredients are both water and solvent soluble making any re -extraction of any compounds of the cannabis waste impossible. The Waste Vendor will then inventory the cannabis which has been further rendered unusable and sign and leave a copy with the store. Cannabis Waste Solutions will then haul the waste receptacle through the delivery area and load empty receptacles to replace the receptacles which were picked up. The Waste Vendor will then email a receipt detailing the contents and weight of the destroyed materials WASTE SECURITY A GM or Co -manager will record on digital video all instances when cannabis product is being destroyed. All cannabis waste will be disposed of in the secure waste receptacle located in the limited -access area of the inventory room, Before disposing of the cannabis, the batch number and product information from which the cannabis waste came from must be noted in the Retail Cannabis Disposal Log along with other pertinent information, A co -manager or General Manager must review and initial the Retail Cannabis Disposal Log prior to disposition. After rendering the cannabis unusable as described below, the cannabis waste will be locked into a 20-gallon secure polyethylene container provided by Cannabis Waste Solutions)which will be further locked in the limited access section of the inventory room. Mr, Nice by contracts with GAIACA for its waste management needs, GAIACA has supplied us with the their own detailed waste management SOP to ensure proper collection, decomposition and documentation of our waste management practices. WASTE RECORDS We will account for destroyed cannabis goods in METRO and ourPoS. We will record the following within 24 hours of each cannabis waste destruction or disposal: (i) name and type of cannabis goods; (ii) DID of cannabis goods; (iii) amount of cannabis goods, by weight or count; (iv) date and time of destruction or disposal; (v) name of employee performing destruction or disposal; (vi) reason for destruction and disposal; and (vii) entity disposing of the cannabis waste. We will maintain cannabis waste destruction and disposal records for at least seven years per our record keeping procedures as pursuant to 16 CCR 5037(a)(7), Our waste management vendor, will pick up the secure containers every week from our secure inventory room and will transport it into its facilities, where waste will be either recycled into energy for California's power grid or made into various "new-gen" materials for the construction industry. We will obtain documentation from the waste facility evidencing the date and time of the facility's receipt of the cannabis waste and will maintain this documentation for at least seven years in compliance with 16 CCR 5037(a)(7). Proprietary & Confidential Information of Mr. Nice Guy National City. LLC. Not for Publication. Safety Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail Section D: Security Plan D.1 SECURITY PLAN PREPARED Prepared by Thomas P. Johnson of Post Alarm Systems, Alarm Company Employee Registration No, 80712, licensed by the California Bureau of Security and Investigative Services. Security System Installation and Monitoring Company: Post Alarm Systems • Commercial Security Systems • Intrusion/ Burglar Systems • Fire Alarm Systems • Video Surveillance • Access Control Systems NFPA® NATIONAL FIRE PROTECTION ASSN. ALARM SYSTEMS Please be advised that the following document is not a public record and is protected from disclosure pursuant to California Government Code § 6245(k), The Public Records Act ("PRA") provides that certain documents and records may be disclosed for public inspection. However, the PRA is not unlimited, Rather, certain record may be withheld, including those records,"...the disclosure of which L1 is exempted or prohibited pursuant to federal or state law, including, but not limited to, provisions of the Evidence Code relating to privilege. "Copyright protection is incorporated into the Public Records Act via Government Code § 6254(k), In addition, trade secrets are considered privileged information under Evidence Code § 1060, which is incorporated into the PRA's exemptions through Government Code § 6254(k). The term "Trade secret" is defined as information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." (Cal. Civ, Code § 3426,1(d),) The purpose of this privilege is to protect information that is essential to the continued operation of a business or industry from disclosure to the public, including but not limited to the business's competitors. The materials contained within the license application, including but not limited to the Standard Operating Procedures and Operating Plans for the operation of this Cannabis Facility are protected as privileged information and shall not be disclosed pursuant to Government Code § 6254(k), In the event there is a request to release the document to the public, please promptly notify the applicant and allow him or her the opportunity to defend the application from disclosure, at his or her own expense, before providing it to the public, Please feel free to contact our office with any additional questions, gllll'.lY of Secur ty and Immtigo a Sisvlo.. >.0..aa C41 11C cdca � .,Av�a 1724100 _ a,e 1 ALARM COMPANY EMPLOYEE wwwY1 P.ad, npr,..a V cs / rYOM, RMMroEa' un. ACE80712 Ewtr•& 08131r2018 TMMIAS PATRICK JOHNSON 21415 POPLARW000 LAKE FOREST. CA 92830 Post AUgY 1TITCY9 Thomas P. 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Conl The security system installation and monitoring service is by Post Alarm Systems (family owned and operated, established in 1956), which is certified by the Central Station Alarm Association (CSSA) as a Five Diamond Central Station Monitoring Company, the highest certification of profession excellence by the CSSA, Post Alarm is listed by Underwriters Laboratories as a certified company for: Protective Signaling Services: S5606-1 Mercantile Alarm Systems: BP8577-1 Police Station Connected Mercantile: BP4913-1 Past Alarm Systems California State Licenses Alarm License - AC01843 C-101 C-7 License - 670585 Alarm Company Qualification-AC0406 Post Alarm Systems - Additional Distinction for Optimal Security Every employee of Post Alarm Systems has to go through a rigorous background check during the hiring process that includes a polygraph, Post Alarm is the only known company in the security industry that requires a polygraph test in addition to the drug test, credit check, DMV check, and fingerprint check. A, The plan should demonstrate how the cannabis business wishes to develop the floor plan and address other security issues on the property. Topics are addressed throughout the Security Plan, such as: Fully Labeled & Compliant Floor Plan with several Diagrams: Standard Operating Procedures 1. Security Guard Training Proprietary & Confidential Information of National City Community Project, LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE Section D: Security Plan D.1.A. THE PLAN SHOULD DEMONSTRATE HOW THE CANNABIS BUSINESS WISHES TO DEVELOP THE FLOOR PLAN AND ADDRESS OTHER SECURITY ISSUES ON THE PROPERTY Mr NICE GUY- ZONE OVERVIEW The following sections describe in greater detail how the floor plan integrates with the security procedures. We have adopted a security -zoned approach to designating different levels of security and access required of each area on the floor plan below. StorageManurecturbs 2098F* '�F f rf N• / Stet��� RR 48 3F /�� / Distribution f!/ "V ,/ ,Y'; Office r�I/fi%!// f/� i . ?ll/r.//I/ 133 3F * a///!%/.1 1' /i//// • wromouur ;ire'G%/!i� �MO/ 783A'L' 8Y..• f�f f/� 034J.%///.. p %! !% r% ;- .�ilF1' Storege rr HY e,' /. 2nd Floor -Floor Plan Retail Area Ipe3 SF cunnsuMus Public RR 67 SF FRONT CUSTOMERENTRANCE 1st Floor - floor Plan VENDOR ENTRANCEIEXII Proprietary 8 Confidential Information of National City Community Project. LLC. Not for Publication. Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE • - - .. . - -- ail Section D: Security Plan PREMISES DIAGRAM STATE COMPLIANT PREMISE DIAGRAM PURSUANT TO19 CCR 15006 (FORMERLY 16 CCR 5006): PLEASE SEE FOLLOWING PAGES FOR PREMISES AND SITE DIAGRAMS, 0,2.A, THE DIAGRAM SHALL SHOW THE BOUNDARIES OF THE PROPERTY AND THE PROPOSED PREMISES TO BE LICENSED, SHOWING ALL BOUNDARIES, DIMENSIONS, ENTRANCES AND EXITS, INTERIOR PARTITIONS, WALLS, ROOMS, WINDOWS, AND DOORWAYS, AND SHALL INCLUDE A BRIEF STATEMENT OR DESCRIPTION OF THE PRINCIPAL ACTIVITY TO BE CONDUCTED THEREIN. SECURITY ZONES AT MR. NICE GUY NATIONAL CITY ZONE - RETAIL AREA: YELLOW Office is part of the Licensed Premise, but not part of the Limited Access Areas. This is where the administrative aspects of the business are conducted. This Area is where the Security Guard will have a home base, and will not require Visitor Protocols, 1, Customer Entrance & Exit All Customers enter through the dedicated customer entrance doors and go directly to Check In, No bulk cannabis enters, Customers Exit through a separate door, monitored by the Check In Desk. 2. Reception -Check In All Customers and Visitors Check in and present ID. Customers await direction to see a Sales Associate, Visitors are badged and await an Employee Escort. The ATM is located in this Zone. All City Permits and State licenses are posted in view and available for inspection. No one under 21 allowed within Premise. 3. Public Restroom 4. Retail Area - Point of Sale Customers make their product selections and pay for order, All sales entered into the Point of Sale System which simultaneously updates the State METRO, Customers orders are picked and packed and brought to the customer. Customers immediately leave the Retail Area. In addition to creating different security zones in the Facility, we intentionally secure our vaults and cannabis storage in the rooms farthest from an area where someone could enter or access the facility, For our retail operations that means completely opposite the customer and vendor entrances on the other side of the building, For distribution and manufacturing, it means placing the vaults in the room that are farthest from the stair case, ZONE :LIMITED ACCESS AREA -'DL'U This Area will be Limited Access. In this Zone Visitor Protocols will be in place as only Employees or Visitors escorted by Employees will enter. Badges are requiredtited Access has secure access doors to limit and control access. There is signage indicating where Limited Access areas are located, There are SOP's should an unauthorized person or customer enter this area outlining the process to remove unauthorized access, 5. Secure Storage Overnight Vault This room has diamond security mesh to reinforce the walls and ceiling, Solid core door, sell closing, self latching with commercial grade locks, This is the main cannabis product storage and where all cannabis will be stored overnight, It has an Inventory Cage for high value produce, The Safe is within the Cage. 6. Vendor Intake Vendors sign in at Reception and receive a badge, An Employee escorts the vendor to the Vendor Intake Room. All bulk - packaged cannabis goods delivered from a Licensed Distributor, will first enter this room where all orders are verified for accuracy and compliance. And then entered into the Track & Trace. Once this task ids complete, cannabis goods move to the SAFE ROOM, for Secure Storage, All deliveries will occurs am to 9 am, prior to Retail Store Opening. 7. OFFICE Manager and Administrative Functions. 8. BREAK ROOM: OPEN AREA - Pass through Area, No Cannabis Storage 9. DISTRIBUTION OFFICE Packaging Labeling Regulatory Compliance Testing 10. DISTRIBUTION STORAGE133 SF Storage of Cannabis or Cannabis Products 11. MANUFACTURING • 1,065 SF Extraction Infusion Cultivation Processing 12 MANUFACTURING STORAGE- 269 SF - Storage of Cannabis or Cannabis Products Proprietary & Confidential information of National City Community Project, LLC. Not for Publication. Security Plan DocuSign Envelope ID: 31 4F4623-2749-460E-A1DF-66191394E6CE Section D: Security Plan D.2.B. THE DIAGRAM SHALL SHOW AND IDENTIFY COMMERCIAL CANNABIS ACTIVITIES THAT WILL TAKE PLACE IN EACH AREA OF THE PREMISES, AND IDENTIFY LIMITED -ACCESS AREAS. COMMERCIAL CANNABIS ACTIVITIES THAT SHALL BE IDENTIFIED ON THE DIAGRAM INCLUDE THE FOLLOWING, IF APPLICABLE TO THE BUSINESS OPERATIONS: STORAGE, BATCH SAMPLING, LOADING OR UNLOADING OF SHIPMENTS, PACKAGING AND LABELING, CUSTOMER SALES, LOADING FOR DELIVERIES, EXTRACTION, INFUSION, CULTIVATION, AND PROCESSING. Please see following page for site plan reflecting the property boun 2ndFloor - Floor Plan 2NDFLOOR MANUFACTURING-1,065SF -Extraction -Infusion -Cultivation - Processing MANUFACTURING STORAGE-269SF -Storage of Cannabis or Cannabis Products DISTRIBUTION OFFICE• 133 SF - Packaging - Labeling - Regulatory Compliance Testing - Loading or Loading of Shipments DISTRIBUTION OFFICE• 133 SF -Storage of Cannabis ar Cannabis Products 1st Floor - Floor Plan BULK CANNABIS MOVEMENT LICENSED PREMISE SECURE CANNABIS STORAGE LIMITED ACCESS AREA RETAIL AREA '- CUSTOMERS • • •'► CANNABIS MOVEMENT SECURE ACCESS r--j EMERGENCY EGRESS CAMERAS WASTE 1ST FLOOR RETAIL AREA -1063 SF • Customer Sales RETAIL SAFE ROOM -98 SF -Storage of Cannabis or Cannabis Products BREAK ROOM - 240 SF -Shared Space - Open Area • Pass through Area • No Cannabis Storage VENDOR ROOM -98 SF - Loading or Loading of Shipments Proprietary & Confidential information of National City Community Project, LLC. Not for Publication. Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Civic Center Drive DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE all Section D: Security Plan 0.2.C. THE DIAGRAM SHALL SHOW WHERE ALL CAMERAS ARE LOCATED AND ASSIGN A NUMBER TO EACH CAMERA FOR IDENTIFICATION PURPOSES UNLESS THE PREMISES IS EXEMPT FROM THE VIDEO SURVEILLANCE REQUIREMENT PURSUANT TO SECTION 15315 OR SECTION 15044 OF THIS DIVISION. D.2.D. THE DIAGRAM SHALL BE TO SCALE (AT LEAST 114") Please see following page for site plan reflecting the property boundaries. Manioc-haco aft 81' AesF* opzerr ' ii ;.MEWS Pr *ROM Sale Room 98 8F staaeuaae woouaa.om w Retail Area 1A6S 8F Pubkc RR 67 8F FRONT CUSTOMER ENTRANCE Staff RR 67 8F fligner YEA66A ENIRANCEIEAR Proprietary & Confidential information of National City Community Project LLC. Not for Publication. Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE Section D: Security Plan D.3 Description of operational security, including but not limited to general security for access/visitor control, inventory control and cash handling procedures. SECURITY PROCEDURES / ACCESS CONTROL / GENERAL PROVISIONS We acknowledge that it is our responsibility to maintain the security of all cannabis items inside the premise. This includes our responsibility to ensure adequate safeguards against theft or diversion of cannabis items and required records. To offset this liability, the Security Director will designate internal managers and may utilize licensed security contractors to accomplish these goals. Any contracted security services and their agents that are utilized will be duly licensed and insured per the California Private Security Services Act requirements and in compliance with local regulations of private security services where applicable, The Security Director will ensure that all doors of the premise include commercial -grade door locks. Each interior and exterior door of the facility maintains an appropriate level of access control relative to the hierarchy of risk and access restrictions close to each facility area. We may incorporate a variety of access control measures as warranted bythe contents of each area. Access control measures we employ include the following: ► Keys marked as "Do Not Duplicate;' ► Electronic access control systems (cards/fobs) ► Coded doors ► Biometric security measures Padlocks maintained by the utility provider will secure the facility transformer, Externally accessible house power will be contained in padlocked panels, and internally accessible breaker boxes will remain secured with padlocks at all times. Only the owner and managers will have access to the keys relevant to our power infrastructure, The facility's surveillance, IP network, and alarm systems maintain emergency backup power supplies sufficient to maintain system operability in a power outage event for over 24 hours. All facility access keys or cards/fobs issued to employees will be managed through a written or digital sign -in/ sign -out log and audited daily by the security director or its designee. Only managers designated bythe security director will be permitted to take keys, access cards, or fobs off -site. Employees must secure keys, access control cards, and security codes at all times and may not provide access through any means to any other person. Only managers may grant temporary access to any employee, vendor, contractor, visitor, or regulatory inspector. All exterior entry points will always be maintained in a closed and locked state and attended by a manager or security officer during all operating hours of the business. All interior doors designated as high -security areas, such as product and currency storage vault, will remain closed and always locked, When the business is not operating, all interior and exterior doors will be closed, locked, and alarmed. All rooms that contain cannabis products, currency, and security system infrastructure will be equipped with a door that includes an automated re -locking device to prevent inadvertent exposure upon vacating. All finished products and/or currency kept on the premises will be secured in the vault or safe. Any safe on the premises will be commercial grade, made of metal, and be of a size capable of storing all the cannabis items anticipated to be on the premises, The safe will be securely anchored to a permanent structure and will meet or exceed the Underwriters' Laboratory, or UL, rating based on the value of its contents, We recognize that cyber threats may exist that could impact the facility, and will take precautions to ensure consumer privacy, protect sensitive financial records, and minimize the potential of unauthorized access or intrusion, As appropriate, the facility's network infrastructure will be encrypted and password protected. Only authorized personnel who have been trained in secure records management procedures will have access to facility data. Users of the system will have role -based authentication, and the sharing of logins will be strictly prohibited. The software will require security measures such as password lockouts, login timeouts, use of strong passwords, periodic required password changes, prohibitions of repeated use of a password, and the ability for administrators to disable user access, We will, as needed, hire a third -party Information Technology Mr, Nice Guy to ensure that digital record -keeping systems employed by the facility are secure. All electronic records will be stored on -site in short-term storage and off -site in long-term backup storage. In the case of cannabis items being present that may require refrigeration, our practice is to securely enclose such items in a refrigerator or freezer capable of being locked and securely anchored to a permanent structure of an enclosed area equipped as a vault (as described above). The model type and weight of any safe or storage refrigerator will be documented in our procedures upon implementation. Patron and general staff access into the facility will he limited to a door visible from the public thoroughfare. The access point will remain closed and locked at all times; a uniformed security officer will control ingress and egress. A manager will be on duty during all operational hours of the facility and provide breaks and meal period coverage for the uniformed security officer, Proprietary & Confidential Information of National City Community Project, LLC. Not for Publication. Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Section D: Security Plan Employees will conspicuously wear an employer -issued identification card while within the facility. The facility manager will control identification cards, issue them, and collect them daily to prevent unlawful duplication, replication, or counterfeiting. Identification badges will: Be laminated or plastic coated ► Include the (DBA) name and license number of the licensee ► First and last name of the employee ► Unique employee number assigned by the licensee Include a color photograph of the employee, which will adhere to the following: Display clearly the entire front of the employee's face ► Be at least1 inch in width and 1.5 inches in height Any pedestrian access points of the facility besides the lobby will be designated as and equipped for emergency -only exits, and shall have no exterior hardware, shall be equipped with crash bars for emergency exiting, and shall be maintained in an alarmed state. Any solid core exterior doors will be equipped with a 180-degree viewing device to screen persons before entry. ACCESS CONTROL DIAGRAM Should any unauthorized Visitor or Customer gain Access to the Limited Access Area, Staff & Security are trained to identify the incident, take action and communicate to resolve the issue by gaining compliance and vacation of the area, An Incident Report Captures the issues and identifies any areas for improvement. ACCESS CONTROL The access control system is the Alarm.com cloud based platform. Data security is extremely important. Alarm.com has 256-bit encryption and no ports need to be opened. The Alarm.com platform utilizes a proven secure cloud based technology, The Alarm.com cloud reduces the complexity of facility security by eliminating local servers and software by shifting operational workload to the cloud. This is a more secure solution because of high -availability services delivered from secure, redundant data centers. There are many advantages with the cloud: o There is no need to have available local IT staff employees on demand for access control system issues, ► Automatically receive product updates will ensure the access control system is always secure from the latest threats ► The cloud provides a quicker and improved situational awareness to manage the access of the facility, ► Remote access control and ID hedging provides quicker response to changes in employees access when needed at critical moments ► Rules -based email and text notifications ► Increased flexibility, reliability and resiliency, faster system deployment ► Future -proof functionality ► Remotely secure access control which can be managed anytime, anywhere The majority of the cannabis product inventory as well as the store safe are kept locked up in the security cage that does not allow general staff access. All retail store product is photographed every three hours and sent to corporate headquarters to ensure product quantities on the retail floor and display fixtures are in -keeping with accounting expectations. Each sales associate is assigned their own cash register, which they are only permitted to use, Each staff member must reconcile their sales and their ending cash total for their assigned register at the end of every shift. The store also conducts a months -end audit of all products in the building and reports the results to the corporate office, Sales associates are not permitted to purchase cannabis products while they are on duty, Staff lockers are not allowed to be locked and are subject to periodic searches by the store manager with a corporate witness to look for possible theft, An independent inventory representative will count specific product categories at each store on a regular rotation every week. This person reports directly to our corporate finance team and does not gain any assistance from the store manager or the sales assistants. Pre -Employment background checks conducted by an accredited member organization of the National Association of Professional Background Screeners (www.napbs,com) is another strategy we use to maintain the prevention of internal theft, From this background check, disqualifying history for employment will include: ► Current probation, parole status, or history of gang affiliation Convictions relating to theft, fraud, or conspiracy ► Convictions related to violent crime To ensure vigilance of these methods, Mr, Nice Guy also employs: Recurrent annual background checks on existing employee ► Prohibiting unnecessary visitors to the store Prohibiting any outside tools/supplies for use on the premises ACCESS CONTROL DESIGN FEATURES Mr. Nice Guy will ensure that all doors of the premise include commercial -grade door locks and that each interior and exterior door of the premises maintains an appropriate level of access control relevant to the area, ► All locks on the premises will comply with ANSI/BHMA standards for Grade 1 products or the equivalent; ► All limited access rooms and exterior doors will be equipped with a door that contains an automatic closing and re -locking device to prevent inadvertent exposure upon vacating of an authorized user, ► Locks that show evidence of wear or tampering will be replaced within 48 hours, or if an outside vendor needs to replace the locks, the vendor will be contacted within 24 hours of discovery; Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE Section D: Security Plan Locks that show evidence of wear or tampering will be replaced within 48 hours, or if an outside vendor needs to replace the locks, the vendor will be contacted within 24 hours of discovery; Replacement locks will be kept on the premises will be stored in a locked cabinet in the management office; Storage cabinets holding product or security components will be a minimum of 10-gauge steel and be secured to a permanent part of the building; Mr. Nice Guy's premises will be equipped to remain secure during a power outage and Mr. Nice Guy shall ensure that all access doors are not solely controlled by an electronic access panel to so that locks remain engaged and are not released during a power outage. Required exit doors shall be manually operable during a power outage to ensure safe egress as required by the California Building and Fire Codes, All doors accessing a limited access area (those areas containing cannabis, currency, business/labor records and security infrastructure) will be equipped with steel frames and solid core doors, All limited access areas will require a key or electronic access credentials to enter. Electronic credentials, where employed as indicated on the premise diagram included here, will be restricted to those employees with a business need to access the area, and only during those days and hours that the employee requires such access, KEY CONTROLS As used in this Security Plan, the term "key" shall pertain to hard keys, electronic access control cards, fobs or proximity sensors whether worn or carried, See premise diagram for designation of those areas requiring hard keys and electronic credentials. Any hard keys issued will be stamped numerically for tracking purposes and will be stamped "Do Not Duplicate'; Access control logs generated by visitor log procedures that follow and logs generated by the employment of electronic access control systems will be retained for no less than 90 days and will be made available for regulatory inspections/auditing upon request by National City or the Department of Cannabis Control. Only managers may take keys off premises. The manager on duty will be responsible for issuing and collecting keys from employees as they arrive/departfor shifts, breaks and meal periods, A log of all key issuance/return will be maintained by Mr. Nice Guy. Keys will be protected, may not be loaned to third parties and will never be left unattended. Employees must report any lost keys to a manager immediately upon discovery of the loss. Mr. Nice Guy will make a determination as to whether security has been compromised and whether re -keying will be necessary. It is against Mr. Nice Guy's policy for any employee to duplicate keys, share passwords, or share electronic credentials, When employment has been terminated, all keys and electronic credentials will be returned and recorded by Mr, Nice Guy. Failure to recover keys upon a termination of employment will require a core change at all locations where the unreturned key provides for access, Terminated employees or managers will be removed from any electronic access control system registries, alarm registries or surveillance software without delay and prior to the close of business on the date of the employee's or manager's termination, IMPAIRMENT ISSUES Our impairment practices are informed by years of experience in our cannabis businesses and stores, We have understood and refined the way we deal with intoxicated people, and in National City, as in our many facilities in California and Oregon, we will have in place the following policies to guarantee the safety of our employees, our customers, and the community at large: ► No services will be offered to consumers if their behavior, actions, and/or physical signs reasonably point to potential impairment ► Adherence to daily limits to customer sales as dictated by state law, and implementing sales refusals even below that legislated threshold should circumstances warrant it Inclusion of informational brochures on the dangers of impaired driving, stressing that there is no safe level of impairment for operating a motor vehicle ► Posting of signs that warn about the risks and penalties of driving while impaired ► Training of our staff on how to acutely and accurately spot impaired individuals The brochure shown on the above is an example of that which will be available at each point -of -sale area for consumers to take, The content of these brochures will be reviewed and vetted with cannabis advocacy organizations and a county agency, such as public health or law enforcement, Mr, Nice Guy also considers the impact of the consumption of cannabis in public generally, and the negative impacts that public impairment can cause. All of our customers shall be reminded thatthe consumption of cannabis should be limited to private spaces, and that consumption in public in any form is illegal. This includes anything from opening packages to consuming or smoking in public. In our National City location, we shall have posted signage that indicates that no consumption will be permitted on or about the premises by customers or otherwise. All customers will be reminded of these rules at check-out and will be told to keep purchased items in their exit packaging until they arrive at their private residence, Those that we will serve through delivery will also be instructed on the proper consumption spaces and limits, Proprietary & Confidential information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE it Section D: Security Plan We will also hold workshops for all interested parties (local administrators and the general public), that will discuss all that is mentioned above, available facts about cannabis, the dangers of overconsumption, proper use, safety concerns, and precautions for pets and children. This is standard across our current active retail licensed stores, and we shall continue these policies and procedures in National City. We believe that these straightforward educational and monitoring measures help to teach customers about the harm that public impairment can have on themselves, our retail business, the industry, and the community in general. We believe from experience that these methods help to reduce the incidents of improper cannabis consumption and we shall work with the county and law enforcement as needed to minimize any such incidents, and to evolve our strategies to rectify any deficiencies. The ultimate in High Security Protection - with Panic Button LOCATION DF SAFE - Within LimitedAccessArea, inside Secure Storage VISITOR SECURITY The Facility will have Controlled Access to the Office Area, Only Employees and Owners with current Badges will be allowed in "Limited Access" areas, and Visitor Access Protocols will be followed if authorized and accompanies to enter the Limited Access Areas. Visitors will be instructed prior to arrival that they are to park in certain areas, This instruction will ensure that the arrival, parking and approach to the facility will be captured on video surveillance. Employees or Security Agents will professionally greet and screen all visitors. Most visitors will come to the facility by appointment. All Visitors will be verified and a determination will be made as to what specific areas the Visitor may or may not have access to. Each Visitor is screened for who they will meet with and what areas accessed. Visitors with appointments will be asked to standby while appointments are confirmed. Drop in visitors (walk ins) will be asked to standby while authorization is confirmed, All areas of the facility will be clearly signed for Access Privileges Required. Office is different from Limited Access areas where Cannabis may be present. There will be elevated privilege with corresponding Badges. Office & Retail Area will not require a badge nor an Escort ° If a Visitor or Visitors seek to access the Limited Access Area: c Employees or Agents will ensure all guests have valid I.D. and proper credentials I Visitors will have all bags, backpacks, inspected. D Visitors will be signed in with name, Mr. Nice Guy name, date and time Visitors may be issued high visibility visitors badge. This will quickly distinguish visitors from employees as they walk around the facilities on the security monitors Visitors will be signed out by date and time as they exit ° There will be areas where visitors cannot have access to, like are of Safe, and other high value cannabis item areas c These areas will be clearly marked c Training will focus on denying access to these areas MR. NICE GUY has a comprehensive process to facilitate Visitor Security. Visitors are not allowed into the facility without first being identified at the front entrance. Every visitor and their vehicles are video recorded. The video is stored for 90 days. The Alarm.com access control system is able monitor who comes to the front entrance with smart phones using video for back up, The managers of MR NICE GUY can speak with the visitor to verify the visitor and then can release a door release button from their smart phone to allow the visitor to enter, The employees inside the facility will have anic buttons that can trigger the alarm for police. Once inside the facility, the visitor on camera and cannont enter into secure limited access areas because these rooms are protected with access control locking hardware. Proprietary & Confidential information of National City Community Project, LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Section D: Security Plan The interior of the MR. NICE GUY facility will be lit at all times and shall be divided into the main entrance, employee lockers and break room, bathrooms, general storage areas, and into segregated areas relating to the various operational areas ("access areas"). All access areas that house any cannabis products for any reason, and in any quantity, will be secured by an automatic locking device and shall have a sign posted at all entryways which shall be a minimum of 12 inches in height and 12 inches in length and shall state: Do Not Enter Limited Access Area Access Limited to Authorized Personnel Only RETAIL Do Not Enter Limited Access Area Access Limited to Authorized Personnel Only SECURE STORAGE EMPLOYEE AND VISITORS BADGES The only persons who may be on the premises are: o An employee o A Customer A person with appropriate authority and a visitor identification badge o A person inspecting Applicant's facility with proper government authority Any person other than those authorized to be at the premises must obtain a visitor identification badge from MR. NICE GUY at the time of entering the main entrance. All persons on or about the premises must visibly display proper identification at all times. Any lost or stolen agent card, or those that may need to be updated, must be immediately reported to the Security Manager and the Department. Only authorized employees may dispense visitor badges, and only upon verification of such person's valid state picture identification card (i.e. driver's license), completion of the visitor information form, and such person's signature thereon and on the visitor log. The visitor log shall indicate the date, time and duration of the visit as well as the escort responsible for the visitor, A person who obtains a visitor identification badge, including, without limitation, an outside vendor or contractor, if appropriate: Must be escorted and monitored by an agent at all times he or she is on the premises o Must visibly display his or her visitor identification badge at all times he or she is on the premises Must return the visitor identification badge to Applicant upon leaving the premises of the marijuana establishment and sign out VISITOR LOG Applicantshall maintain a visitor log that includes the name of the visitor and the date, time and purpose of each visit by a person other than those authorized to be on the premises as an Employee. Applicant shall make its visitor log available to the Division, SP and local law enforcement upon request. LOG HEADERS Date Badge d I. Name COMPANY Signature Escort Time Time OUT UNAUTHORIZED ACCESS If a Visitor or Customer does not follow Signage and enters an unauthorized Limited Access Area,and is not properly badged or escorted by an Employee, all Employees and Security Guards are trained on what to do: Provide a verbal communication: > That the Individual is in an Unauthorized Area > Instruct the Individual to exit the Unauthorized Area with specific directions to exit If possible and safe to do so, escort the Individual out of the Unauthorized Limited Access Area If compliance is not achieved, escalate to other Team Members > Alert Security Guard > Alert Manager Inhere is a serious breach or significant noncompliance: > Fill Out an Incident Report Discuss at Regular Meetings: > Initial Training > Ongoing Training > Regular Scheduled Team Meetings CASH MANAGMENT Mr, Nice Guy has secure, FDIC insured banking through Dama Financial, who provides armored transport at a nominal fee to its account holders, Not only has our attorney thoroughly vetted Dama and selected it as the only financial services provider who can show compliance with FINRA regulations, but the City of Los Angeles selected Dama as its financial services provider during the COVID19 pandemic to assist cannabis businesses with paying taxes in cash. Proprietary & Confidential information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Section D: Security Plan CASH HANDLING PROCEDURES Opening, mid -day, and closing procedures; whether cash will be stored an -site or off -site; and security measures for storing cash on the premises and during transportation While awaiting Federal Legalization, a large percentage of transactions with our storefront will inevitably be handled in cash dollars. Because of this, it is imperative to have strict plans in place for cash management, cash security and reduce opportunities for crime. Due to these risks, Mr. Nice Guy's cash management policies include: Having all cash on hand (beyond de minimus amounts) regularly picked up from stores by armored cars. These cars are placed on an alternating schedule not to establish any set time per day that cash is collected. o Each day, POS terminal cash drawers are pre -loaded with a small and fixed dollar amount of money to start each sales associate's work shift and to provide only the amount of money expected to handle changing of basic transactions. Each sales associate is assigned one exclusive register, and that register is not shared with anyone else. That sales associate is responsible for all cash in the register and must recap all sales for that shift. This provides a sense of personal responsibility for each person who manages cash as part of their day-to-day activities. Each sales associate must reconcile and recap sales for each cash register at shift change, detailing credit card sales and cash sales. These recap numbers are sent directly to the Director of Finance's office. Our internal systems immediately flag any discrepancies, and alerts are sent to management for investigation. Every 3 hours, all retail sales are reported to the Director of Finance. ► Store closing, all -cash that has not been released via armored vehicles is locked in a segregated safeforthe night pending future pick-up. o The Director of Finance recaps all sales each evening and atthattime also details any discrepancies regarding the sales recaps by the sales associate. The store manager is ultimately responsible for the reconciliation of any accounting errors. Anything that is not accounted for and explained by the end of day becomes elevated to our Director of Finance. If needed, video surveillance tapes will be reviewed across registers and the safe to attempt to locate the source of any unresolved discrepancies. Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Section D: Security Plan 0,4, DESCRIPTION OF PERIMETER SECURITY, ON -SITE SECURITY GUARDS, LIGHTING, AND PARKING We will have on site security guards roaming the property 24l7 This includes perimeter monitoring by the guards physically walking the perimeter of the property. On site outdoor lighting will be designed so that the beam illuminates the parking lot and buildings so as to light the areas where a person could be lying in wait or hiding. Additionally, the outdoor lighting will be designed so that the surveillance -system storage device or the cameras will be capable of being accessed through the Internet. Cameras will be low -light capable, but Mr, Nice Guy will ensure that all areas recorded by the video surveillance system will have adequate lighting to allow the surveillance cameras to effectively record images. Cameras must be immobile and in a permanent location, Indoor lighting also acts as a criminal deterrent. That is why turning on the lights in the Facility is part of the opening procedure, Our parking lot will be behind a fence and screened by trees, It will also be well lit at all times when customers or staff are present at the Facility. The security guards will routinely monitor and patrol the parking lot to ensure safety of our patrons and staff. Security guards will also monitorthe parking lotto ensure that customers are not loitering or using cannabis before they leave the premises or parking lot. PERIMETER VIDEO Video System: The optimal coverage of the exterior perimeter, and key areas outside the building. Burglar Alarm: All devices are UL Listed for Commercial Security. There is motion detection throughout the perimeter and in all key areas inside, Perimeter Lighting: Introduce Targeted Perimeter Lighting that achieves safety requirements and goals, yet prevents light pollution from spilling into neighboring properties or interferes with Newport Blvd SECURE LAYERED ONION This is a philosophy combined with tactics. It is also a method we can discuss our Security p[publicly without giving away critical elements of our specific plan, We start with the hardened perimeter, and introduce layers of security throughout the facility designed to slow down any intruders, to give people time to get to safety, or for police to arrive. This think represents our design, training and day to day operations Diagrams visually depict the Secure Layered Onion approach Lighting Standards: ► Equipped with and, at all times between sunset and sunrise, shall remain illuminated with fixtures of sufficient intensity and number to illuminate every portion of the property with an illumination level of not less than one foot-candle as measured at ground level, including but not limited to, landscaped areas, parking lots, driveways, walkways, entry areas and refuse storage areas EXTERIOR SECURITY AND LIGHTING Exterior led lighting will serve as a deterrent as well as to aid in monitoring of the CCTV system, Doors and windows will have contacts placed, if broken alarm and siren is activated, security and 24/7 monitoring Mr. Nice Guy notified, Lighting will be commercial grade to lumen allowed by City Code, and shielded to protect light pollution and quiet enjoyment of neighboring properties. Facility lighting will conform to National City Cannabis & Municipal Codes All facility entrances and all window areas will be illuminated during evening hours o Standards will meet city requirements: Fixture Types c. Wattage Illumination Levels, shielding t) Any necessary approvals or permits will be obtained Lighting will be shielded to eliminate or minimize any light pollution Additional Perimeter Lighting will be installed, with motion detectors, as a deterrent, to assist onsite Guards in threat detection assessment or addressing any security issues after dark, and assisting camera coverage and quality. All aspects will be highlighted at and called out in Building Plans submitted, The Asset will be hardened. The Perimeter will have commercial grade lighting as a security deterrent, of sufficient lumen to support night time camera coverage, while protecting against light spillage into neighboring properties, Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Section D: Security Plan CAMERA LOCATIONS - Exterior and Interior VIDEO SYSTEM The camera system is a full perimeter video system with Hunt video brand camera components, networks video management software and hardware, The Hunt video system provides excellent detail needed for identification and verification of irrefutable evidence. All cameras will be of adequate quality, color rendition, night vision and resolution to identify all individuals on property or adjacent to the exterior of the property. Cameras will record 24/7, daily, Cameras recording system will be able to play back quality suitable for viewing up 3 months, 90 days, No objects will be placed to obstruct camera's view, Recording system will be serviced and inspected every quarter. Camera monitors will be reviewed and inspected daily for any camera malfunctions by Managers and security. NETWORK VIDEO REORDER (NVR): The NVR will be installed inside the security room which is a restricted access room and a secure location within the Limited Access Area, The NVR video recording system will be housed in a designed, locked and secured room where only authorized employees with access cards can enter, The NVR will also be installed inside a locked rack mount storage unit inside this office, A sign in sheet with date and time will be completed and maintained when recording room is entered by service personnel. The security alarm system and motion detector will protect the NVR. VIDEO DATA STORAGE Video will be captured 24/7 with continuous recording ( not only with motion activation) atl5fps and stored for a minimum of 90 days VIDEO COVERAGE AREAS Cameras will be placed strategically on the exterior of building to view and record all ingress and egress of all cannabis delivery vehicles, staff and visitors, Cameras will be placed to view and record all activity in parking lots, Cameras will be placed inside building to record and identify all personnel in warehouse and rooms, Post Alarm will install 24-hour security surveillance cameras of HD quality to monitor all entrances and exits, to and from the premises, and all interior spaces within the commercial cannabis business which are open and accessible to the public. The entire outside perimeter and interior of the premise will have video coverage, The exterior perimeter cameras are positioned to protect each other from outside vandal attack, All perimeter doors and openings are covered by video both inside and outside, Camera coverage will include all interior spaces where cannabis, cash or currency is being stored for any period of time, on a regular basis. , Video coverage will include interior spaces where diversion or inversion of cannabis could reasonably occur, Coverage will include of all interior spaces within the commercial cannabis business which are open to the public, Coverage of all interior spaces within the Limited Access Areas where cannabis, cash or currency is being stored for any period of time on a regular basis, POINT OF SALE STATIONS We plan to implement Point of Sale (PoS) locations behind our Retail Counters. Each PoS location, when open, will be staffed by a Sales Associate. Each Point of Sale will have dedicated surveillance cameras to record the transaction. Cameras will be cover other additional retail sales floor store space to record any space where cannabis goods are displayed for sale. Video Surveillance Cameras will be placed throughout the Retail Sales Area for full saturation. These cameras are available to he monitored in real time by Security, Managers and remotely by Managers and Ownership, Video Surveillance Cameras will be placed throughout the Retail Sales Area for full saturation, These cameras are available to be monitored in real time by Security, Managers and remotely by Managers and Ownership. VIDEO ACCESS FOR VERIFICATION Security camera footage is available in real time live access, is remotely accessible and can be made available to the Police Department within 24 hours of notice, The combination of quality cameras and quality video storage will provide video footage that will be of sufficient quality for effective prosecution of any crime found to have occurred on the site of the commercial cannabis business, VIDEO SURVEILLANCE SIGNAGE Signs 12x12x1 stating "THESE PREMISES ARE BEING DIGITALLY RECORDED', will be posted on all exterior building walls, parking lots, entrances, Propersignagewill be visibly placed throughout the Retail Sales Area. Proprietary & Confidential information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE • - -. • . . - - ail Section D: Security Plan SECURITY MEASURES FOR DOORS AND WINDOWS Doors and Windows will be protected by our Layered Onion approach of a Hard Outer Layer, Secure Access Doors are solid core, self -closing, self -latching with commercial grade locks, On the exterior, we have Perimeter Cameras and Security Lighting. In the evening, the gates will be closed establishing a protected layer around the entire facility. The front Office glass will be monitored and protected by full saturation Motion Detectors that have both motion and heat capabilities, If the glass breaks or someone penetrates from the roof or someone moves within the facility, detectors will alert, sirens and strobes will activate, GLASS AREA ALL Glass will be secured by commercial Security Window Film to a 16 mm thickness. Security Window Film and impact protection adhesive slows entry by up to 2 minutes, giving the police time to respond to a security event, This Security Window Film also provides a solution to prevent any cannabis from being visible from the exterior. There will be no exterior evidence of cannabis except for any compliant signage authorized, OVERALL PERIMETER SECURITY - GLASS PROTECTION The Perimeter will have full surveillance coverage with commercial lighting that prevents light pollution into neighboring properties, All exterior glass is protected by commercial Security Window Film, LAYERED ONION SECURITY PLAN A Plan not a System, an integrated weave of Security HARD EXTERIOR , Sr © ynalma a M viM drr tk ' WM r-wa0YMn • Uatr Moo IYdr • Ardilaeral shy PEOPLE - •Nscsonry pmendhawtlaa • Flwnaa Urn LAYERS= • Mab Ynatrib s Alum © •HwiwM7mMw1.*y.lhb • r.rear •Metln o.ru n •..rrdVika>'w•ro • 100%Cnnr.Mr ammo, • Perk "mar • rwaa Mat COMMIS • Sob II *nit anbm • Watt Girth • Koh Snaty Ion hnatls •Swan WF.rlaa © DEFEND VALUABLES. •• omoidA. •CA / \/ Harden Asset Scissor Doors on Wits* ManTrsp Trutkr ap 19111 , Lnbt cwn Card Readers Secure Access rALARM 73ecureCabinet 6 Months Storage Video Surveillance BULLET •tAIAOT 360 Degree r Proprietary 8 Confidenfial information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail Section D: Security Plan All cannabis and cannabis products secured in locked location, kept to prevent diversion, theft and loss. This facility has a tiered and escalated security plan for all cannabis and cannabis products. Our policies and procedures are designed around "Just in Time" Principles to be institutionally aware of all product in general and high value product in specific, to make sure it is protected at all times while spending the least amount of time in the facility. Most Cannabis has a shelf life and freshness requirement to further necessitate a quick in, quick out process. Tier 1: Secure Layered Onion provides layers of Security to slow down and deter potential threats The entire facility is treated as a high -risk facility with perimeter and interior crime prevention security and surveillance with monitored alarms. METRC is located within the Secure Storage Room. Employees training covers Track & Trace and Anti Diversion and Inversion, as outlined in other sections. Tier 2: Secure Storage rooms for high value products that have additional controlled access and dedicated surveillance. This room will require dedicated access that has both prevention and chain of custody elements. This Secure Storage Room has reinforced walls and ceilings, with diamond security mesh under the dry wall, and a cage system for the highest value cannabis items that will hold the Safe for Cash. The Doors are solid core, self -closing, self -latching, with commercial grade locks Secure Access: is protected by a door with door contacts and HID or Fob Access Control Doors to ensure management grants access and can track access via the cloud., As described above, the facility will have a UL listed TL -30 Safe for all cash. The Safe is secured by panic button and safe contact for door, with a vibration sensor. ON -SITE SECURITY GUARDS Our management and ownership team bear the ultimate responsibility for the security of the premises, and as such they are the ones that will manage and delegate security duties to the Security Director, Additional information on responsibilities associated with the Security Director are outlined further below and throughout the security plan. We employ a 24-hour armed guard service, with at least one guard on duty at all times. Multiple guards will be on duty during shift changes at coincidental times such as the store opening, mid -day, and store closing. The guard Mr. Nice Guy we use prefers to hire military veterans, and all guards are required to carry guns and wear protective vests. (Mr, Nice Guy currently employs military veterans at all of our locations across both California and Oregon), Interior Guard is stationed at the store entrance to examine valid ID, check customer temperature, maintain customer traffic control, and ensure that Covid masks are being worn by every customer that enters the store, To serve our customers that may have forgotten their masks, we have car service available as long as no minors are present in the vehicle. Interior Guard is stationed at the store entrance to examine valid ID, check customer temperature, maintain customer traffic control, and ensure that Covid masks are being worn by every customer that enters the store. To serve our customers that may have forgotten their masks, we have car service available as long as no minors are present in the vehicle. Day Guards will inspect the entire exterior property at the shift change, mid -day, and store closing when there are two guards on hand. The night guard will regularly walk the entire property every hour throughout the night. Security Director is responsible for all aspects of this security plan, including management of all security technology, transportation security, access control to facilities, training of employees/ten- ants/visitors, and contracting and supervising licensed security officers. The Security Director is also responsible for theft prevention, plan auditing, systems testing, and ensuring that minors do not enter the premises. Overnight Guards Mr, Nice Guy will provide regulatory agencies and all businesses and residences located within a 100-foot radius of the facility with the name, telephone number, and e-mail address of the Security Director. They will serve as the security liaison with whom regulators or inspectors can provide notice if there are security concerns associated with the facility or to whom regulators may refer members of the public who may have any concerns or complaints regarding the security of the cannabis facility. This is to ensure that the Security Director will be reasonably available to meet with regulators or their designees regarding any security -related concerns or operational matters. Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE ail Section D: Security Plan Security personnel will be licensed by the State of California Bureau of Security and Investigative Services, PRIOR SERVICE SECURITY is properly licensed with the DCA, Bureau of Security and Investigative Services, PRIVATE License No. PPO 120329 Receipt No. 6850 PRIOR SERVICE SECURITY 1100 W TOWN AND COUNTRY RD STE 1250 ORANGE, CA 92868-4633 bump el Snippily aria Inve_benlim Sonoma PO eo0889002 West Sacramento, CA 957984002 t910) 322d000 PA'RQ'-OP ERA TOR VOW Until: 08542022 in pcccrdsnca with InrpfcvhWene of ai.lsicn $, C1lsple, 1/ 501 Me 9usinua MOO Pr.4.p10110 000e. Me company named 'Perm: -.Is ii1y00 a W,.ele Peiv, Operator ti49ei. Renewal. ---- NON -TRANSFERABLE - • - POST IN PUBLIC VIEW Security guards are employed by licensed Private Patrol Operators or private security employers to protect persons or property or prevent theft as defined in Business and Professions Code (BPC) Section 7582.1. Security guard register through the Bureau of Security and Investigative Service (BSIS or Bureau), and must: Be at least18 years old (BPC Section 7582,8) ° Undergo a criminal history background check through the California Department ofJustice (DM) and the Federal Bureau of Investigation (FBI) (BPC Sections 7581 and 7583,9) and ° Complete the Power to Arrest training (see "Training Requirements"") Training Requirements ° The power to arrest training must be completed priortothe issuance of a Security Guard Registration (BPC Sections 7583,6 and 7583.8), ° The thirty-two (32) hours of training in security officer skills must be completed within the first six (6) months of registration. Eight (8) hours of continuing training must be completed annually (BPC 7583.6 and California Code of Regulations (CCR) Section 643), The training may be administered by a Private Patrol Operator, a Bureau -certified training facility, or by a Bureau -approved provider All registered security guards are required to maintain their certificate of completion of the required training for not less than two years from the date the training was completed (BOC 7583.6). Employers are required to maintain records for a minimum of two years; however, registrants may need to provide subsequent employers or BSIS with training records, SECURITY SOP's - Partial Sample - Full SOP's available upon request STANDARD OPERATING PROCEDURES & GENERAL ORDERS * * * * >~ Introduction PSS CONTINUING TO SERVE As an employee of the Company It Is your responsibility to read and become familiar with these Standard Operating Guidelines. The PresldenUCEO has the authority to amend or revoke any Standard Operating Guideline and to create any additional Standard Operating Guidelines from time to time, as the circumstances for the good of the Company may require. Employees subject to these Standard Operating Guidelines must understand that, no set Standard Operating Guideline can be established which will completely cover all cases arising In the discharge of their duties. Necessarily, some matters must be left to the intelligence and discretion of the individual. However, It must be understood If discretion Is used in a reckless or unreasonable manner, which is determined to be detrimental to the image of the Company or its Clients and which sound public opinion recognizes as injurious to the ability of the Company to serve its Clients, that individual who violates or attempts to violate these Standard Operating Guidelines will be subject to Disciplinary Action, up to and Including Termination from the Company. Code of Ethics In recognition of the significant contribution of the Company to Crime Prevention and Reduction, as an Officer, I pledge: To accept the responsibilities and fulfill the obligation of my role. protecting life and properly; preventing and reducing comes against the Company and its Clients, upholding the law: and respecting the constitutional rights of persons. To conduct myself with honesty and mtegnty and to adhere to the highest moral principles in the performance of my assigned duties To be faithful. diligent. and dependable in discharging my duties. and to uphold at all times the laws, policies. and procedures that protect the rights of others. To observe the precepts of truth, accuracy, and prudence. without allowing personal feelings. prejudices animosities. or friendships to influence my judgments To report to my Immediate Supervisor. without hesitation. any violation of the law or the Company's or its Clients regulations To respect and protect the confidential and privileged information of the Company or its Clients beyond the term of my employment, except where their interests are contrary to law or to this Code of Ethics. To cooperate with all recognized and responsible laW enforcement and government agencies in matters within their jurisdiction. To accept no compensation, commission, gratuity, or other advantage without the knowledge and consent of the Company To conduct myself professionally at all times. and to perform my duties in a manner that reflects credit upon me, the Company, and Its Clients. To stnve continually to improve my performance by seeking training and educational opportunities that will better prepare me for my duties and responsibilities As a Supervisor of the Company and its Employees, I pledge; 2 Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE all Section D: Security Plan SECURITY SOP's - Partial Sample - Full SOP's available upon request To recognize that my principal responsibilities are, in the service of the Company and its Clients, to protect life and property as well as to prevent and reduce crime against the Company, industry, or other organizations and institutions: and in the public interest, to uphold the law and to respect the constitutional rights of all persons. To be guided by a sense of integrity, honor, justice, and morality in the conduct of business; in all personnel matters: in relationships with government agencies, the Company, and its Clients; and in responsibilities to the general public. To strive faithfully to render services of the highest quality and to work continuously to Improve my knowledge and skills and thereby improve the overall effectiveness of the Company. To uphold the trust of the Company, its Clients. and the public by performing my functions within the law, not ordering or condoning violations of law; and ensuring that all personnel conduct their assigned duties lawfully and with proper regard for the rights of others. To respect the reputation and practice of others in the industry, but to expose to the proper authorities any conduct that is unethical or unlawful. To apply uniform and equitable standards of employment in recruiting and selecting personnel regardless of any protected status, and in providing salaries commensurate with job responsibilities and with training, education, and experience To cooperate with recognized and responsible law enforcement and other criminal justice agencies; to comply with state licensing and registration laws and other statutory requirements that pertain to the Company To respect and protect the confidential and privileged information of the Company and its Clients beyond the term of my employment, except where their interests are contrary to law or to this Code of Ethics. To maintain a professional posture in all business relationships with the Company and its Clients, with others in the industry, and with members of other professions. and to Insist that all personnel adhere to the highest standards of professional conduct. To encourage the professional advancement of all personnel by assisting them to acquire appropriate Industry knowledge. education. and training. Index General Rules & Regulations Use of Force Entry Access Control Operations Patrol Operations Harassment & Sexual Harassment Illegal Drugs & Alcohol Abuse Civilian Complaints Sleeping On Duty & Breaks Authorized Break Periods Employee Issued Keys Company & Client Radios Report Procedures Emergency Contacts Page 5 Page 10 Page 13 Page 14 Page 16 Page 18 Page 20 Page 25 Page 26 Page 27 Page 27 Page 28 Page 30 A plan to demonstrate how the private security guard(s) and business personnel shall monitor the premises to ensure; In general, everything we do is designed to facilitate these outcomes. From our facility design, to perimeter lighting, to signage, to training, to roles and responsibilities to coordinate with our Security Guards. We have Security Guards and Managers that monitor video coverage of the facility and are trained to take necessary action to mitigate issues safely. Our Team is in constant verbal contact to communicate and coordinate, We are trained to handle issues safety, For Grand Openings and for First Time Customers, we reinforce the necessity to take their time shopping, but there is a requirement to exit the property once they have made their selections. Our Check In Receptionist communicates this, our BudTenders communicate this. And our Managers and Security Guards give verbal warnings and directions to potential customers who do not comply. This is reinforced by signage on the interior and exterior, And video surveillance monitors customer's behaviors to alert management and Security of potential issues and provide visibility on how to mitigate, Security conducts routine interior and exterior security sweeps to monitor the facility and premises. Should any customer breach the Limited Access Areas, verbal warnings are given, Specific direction on how to exit is provided. Failure to comply is escalated to Security and Management, Same as above. In the routine security sweeps, our Security Guards implement our good neighbor policy by not only addressing customers loitering, but also address any homeless issues, pick up trash and talkto our neighbors as a liaison. In our stores, we make the neighborhood safer and are recognized by our neighbors for doing so. Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail Section D.5 - TRANSPORTATION TECHNIQUES D.5. Identify transportation techniques and security procedures. RECEIVING AND CANNABIS MOVEMENT Deliveries from a Licensed Distributor will occur 6 am to 8am, prior to Store Opening. Cannabis Customers No Cannabis Finished Goods will enter when Retail Store is Open. Only age verified Customers will enter, check in and proceed to make their cannabis purchase. No one under 21 is allowed within Premise, as Customers or Employees. All orders will be placed in opaque packing. Customers will enter and exit from the front and side, dedicated entrance and exit for customers. All Finished Packaged Goods will be received in the dedicated side entrance of the Licensed Premise, All Receiving Deliveries will be by a California Licensed Distribution by the Mr, Nice Guy owned or third party Distributors. All deliveries will be by appointment at specific but random times. All Cannabis Deliveries will coordinate with the on -site Guards who will review perimeter security cameras and oversee the delivery from a security perspective. The Cannabis Deliveries will quickly enter the facility into the "Vendor Room, a Secure Storage Area. Here, all goods will be checked and verified against the Distributor's Manifest for count, size, batch information, quantity, etc. All incoming received Cannabis Products will be entered into the Store's Track & Trace System for one of the Secure Storage Locations of the Vendor Room, for backstock, or the Safe Room for active Sales Floor Inventory where customer orders and picked and packed. Cannabis Product will be moved from the Safe Room to the Sales Floor to meet the demand of Customer's Orders, All Cannabis from the Sales Floor (limited Cannabis on the Sales Floor during hours of Operation) will be moved back into the Safe Room for Secure Storage overnight. TRANSPORTATION TECHNIQUES AND SECURITY PROCEDURES All incoming distribution transportation drivers are required to notify our onsite staff of imminent arrivals of goods. Our staff knows to monitor the area in anticipation, and if they observe any suspicious behavior, they will notify the distribution driver to delay the delivery until the coast is clear of concern. Deliveries occur only during regular business hours on staggered delivery schedules. All staff that are assigned to assist in the receipt of goods area are fully trained in the rules and regulations pertinent to transportation compliance and to report any suspicious activity to the police or management as appropriate. For safety reasons, the door for deliveries will be located as far as possible from the public entrance to our retail storefront. Once a delivery driver arrives, he/she will be directed to back up as close as possible to the door in one of the designated parking spaces for the deliveries, The driver is then escorted by a uniformed security guard to the receiving area with the products. Once the delivery is completed, the driver must wait to be cleared for departure by security to ensure safety upon leaving. Once a product delivery reaches the facility, store managers will check the accuracy of the delivery by reviewing the invoice presented by the distribution driver. Managers then account for the products received by cross checking them into the track -and -trace software, along with inputs to track and trace as to our receipt. By doing this, they will be cross referencing the packaging information on the product, labeling, previous and current sales of cannabis goods through that specific license, and the Certificate of Analysis to verify required testing. A uniformed security guard will monitor all transfers and will call the police as well as place the facility on lockdown if any suspicious activity occurs, Once the product passes the verification process, the fulfillment manager inputs the following information into the track -and -trace system, as required by California law: Driver's license number of the person transporting the cannabis goods and the make, model, and license plate number of the vehicle used for transport, Our name, licensee number, and premises address as the destination licensee that received the cannabis goods. The name, license number, and premises address of the originating licensee and address of the person transporting the cannabis goods, Name and license number of other licensees involved in the activity ortransaction, Date and time of the activity ortransaction from the distribution licensee. Name and type of the cannabis goods received. Unique identifier of the cannabis goods received. Amount of the cannabis goods, by weight or count, received, Once an item is accepted, a description of each item, the price paid for the products, and the expiration date will be logged, If there are any differences in the amount received and the quantity in the invoiced amount, it is the duty of the managers to input the error in the track -and -trace software, This process of recording in the track -and -trace system helps us accurately perform our weekly inventory and is required by law, Once accepted, the product is then moved through our exclusive delivery door and into the inventory room, Managers will catalog, sort, and store the incoming products into secured safes. This inventory area is secured and has secure limited access that requires a code or key card for entry. Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE Section D: Security Plan D.6. Description of Employee training and general securities policies Employee specific policies, training, sample written operational policies and procedures. Full copy of RETAIL SOP's available on request, Table of Contents provided as a reference, Description This document contains the Standard Operating Procedures for MR NICE GUY who specializes in Dispensing Adult -Use and Medical Cannabis. Mr. Nice Guy (Standard Operating Procedures (SOPs) Gxca Cnand: 0/16/2021 EXPECTATIONS & SECURITY TRAINING Each successful employee applicant shall undergo safety, security training before beginning work. As a part of the employee orientation process, and as an ongoing regimen, all employees will be provided with a copy of the Employee Handbook, the Security Plan, as well as security and safety training. Security and safety training shall consist of examination and discussion of the Security Plan, premises orientation, emergency training, and situational training. Situational training consists of instruction related to particular employees' job duties, Annual Formal Training will occur in January. Quarterly meeting will have a focus on Safety and Security, Monthly meetings will reinforce Safety and Security. All incidents will have a formal follow up meeting. Refresher training will be provided to each employee on a consistent basis and intermittently as necessary. Initial employee safety and security training shall include; Building orientation and access authority which includes; The proper use of employee's access badge for entry into the premises and building entrance; The proper use of employee's access badge for entry into employee's authorized access areas; t> Employee's authorized entry and exit points; r> Employee's locker; and Restroom and sink facilities. b Track & Trace training and reinforcement of the necessity to record Measures and controls for the prevention of diversion, theft or loss of cannabis which includes; Necessity of keeping all facility doors locked and secure at all times Prohibited activities such as entrance into unauthorized access areas Awareness of video monitoring Training for the tracking of all product -related activities and information i) Requirement to report any unusual activity, security concern, or loitering Proprietary & Confidential Information of National City Community Project, LLC. Not for Publication. Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail Section D: Security Plan EMPLOYEE TRAINING AND GENERAL SECURITY POLICIES EMPLOYEE TRAINING PLAN - PRODUCT TRAINING Please also see our employee training plan at page _ To provide the best customer experience possible, we expect our staff to proactively educate our customers as appropriate on the variety of cannabis products, categories, recommendations for usage, potency, and expected effects of the products they purchase. We conduct staff training on products of each item by category along with role-playing exercises to best deliver that information and educational experience to our consumers. Staff training lasts for two full weeks and is taught by on -site managers, staff from other locations who have extensive cannabis sales experience, and our Director of Retail. We also give study handouts during training that break down the various elements of cannabis products, such as explanations of various terpenes and cannabinoids (molecules that provide odor, taste, potential medical benefits, etc,), Employees always have these handouts to refer back to, Vendors who visit our store with their products typically discuss their items, the background of their Mr. Nice Guy, and various selling points with our employees to keep communication open and transparent between our suppliers and our retail staff. This process also ensures that our employees have a chance to converse about new and different items or any questions they might have about those items with the vendor. Conversations discussing how the staff feels about the items they have tried and the vendor's products are also covered during vendor visits. With this type of first-hand experience, we can communicate with our customers about what will work best for them. Employee Training Plan — TRACK-ANDTRACETRAINING (METRC) Mr. Nice Guy's management and owners spearhead all operational leadership, oversee all employees, ensure proper execution of regulatory requirements, maintain industry best practices, and ensure safety and security protocols. The owners, general managers, and fulfillment managers will complete, pass, and be certified for the state -mandated track and trace training. Having multiple high-level employees complete this training minimizes potentially costly errors and ensures all requirements are met. ► Software user interface, operability, and functionality ► Reporting requirements ► Required information updates ► Movement ► Review for information updates, accuracy, and completeness ► Fixing errors ► Troubleshooting Employee Training Plan -- RETAIL OPERATIONS TRAINING When it comes to retail sales, employees will be trained on the most important aspects of customer service and public information. To ensure this, the following protocol will be adhered to: ► New staff will shadow the manager on duty for two (2)weeks. ► All staff has on -going product education with one-on-one product training directly from vendors and sales technique training ► We regularly offer store security training to role-play our procedures in emergencies such as robbery, theft, earthquake training, active shooter training, first aid, facility operations problems, HR situations ► We train additional inventory awareness procedures each time we do our monthly full store product audit inventories ► California METRC compliance training is on -going regarding inventory control and compliance ► We enroll key management staff into state OSHA safety training, as those training opportunities are offered on the seasonal calendar Owners and managers will walk all employees through the proper procedures for every part of their duties and the duties of others. This includes, but is not limited to: ► How and whereto safely store product ► Track and trace logging ► Limited access area logging procedures ► Who can be granted access to what areas and when ► Spotting and handling impaired/intoxicated customers ► Performing point -of -sale transactions and checkouts ► Proper exit packaging procedures Additionally, all retail employees will be trained to understand product types, strains, effects, histories, properties, and origins. Staff will also be trained on how to interact with customers and provide them with necessary information, such as: ► Product effects and strength such as, Sativa vs, Indica vs. Hybrid, THC vs. CBD, percentages, and ratios ► Proper dosage for effect meaning, measurable units of each product, serving size breakdowns, and corresponding effects with increasing dosage, etc, ► Speed of product effect, for instance, immediate vs. delayed ► Duration of effect meaning, two to three hours vs, eight hours or more, strength of effects across time, and safety of additional dosages across time ► Differences in consumption methods such as, the effects of ingestion like raw flower in a bong vs. a pipe or joint, edibles vs, inhalation, and limits/effects across methods Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication Section D: Security Plan DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE Section D: Security Plan EMPLOYEE LOG For the safety and security of the premises surrounding the building, the building, its occupants, Cannabis Flower & Oil, and Cannabis products, the Facility will keep a current and accessible roster of all employees and ensure that both all employees are aware of terminations or duty reassignments as they occur. All terminated employees or those not having valid agent cards shall be prohibited from being in, on or about the Facility. EMPLOYEE TERMINATION Upon termination of any employee, whether it be voluntary or involuntary, Applicant shall ensure that terminated employee's keys, uniform, tools and access codes and cards are returned, and ensure that such codes and access points are altered so as to prevent the terminated employees' access. Applicant shall notify the City within ten (10) days after a marijuana establishment agent ceases to be employed by at the cultivation facility, EMPLOYEE PROCEDURES DURING ROBBERY Don't resist ► Criminals want to avoid conflict and use fear ► Imperative to explicitly follow the robber's instructions, ► Remain calm ► Aim to get the robbers out of the facility as quickly as possible by being fully cooperative. ► Includes giving in quickly, following their directions, and not trying to intervene. Even an attempt to contact police or activate a hold up alarm could aggravate the robbers and lead to an even more dangerous situation. ° Take mental notes discreetly ► Do not stare down the intruders in an attempt to memorize them or their vehicle. Such action is easily noticeable and could anger them. ► Any observations you can make with regard the appearance of the robbers for later identification can only be done when and if it safe for you to do so. ► Do Not follow the robbers after they leave ► Do not attempt to follow the escape as that action could escalate into a more dangerous situation, Wait to ensure intruders have completely vacated the premises entirely Only then should you proceed to lock all doors and call the police, ► Afterwards, confirm the wellbeing of others, addressing any injuries that may haveoccurred. Expect to remain scared and in disbelief of what just happened, but try to focus your energyon recounting the mental notes that you took and getting othersto document their observations • When police arrive, give them as much accurate information as possible and let them track down the criminals — not you or another person at the scene of the crime, PREVENTING A ROBBERY OPENING & CLOSING ► The most dangerous and vulnerable times for operations. Open and close with at least two people so one can open while the other watches from a safe distance with cell phone on alert ► When opening, keep the doors locked, remove cannabis from safes and vaults, and ready for operations. ► Keep any Cannabis not in packaging or distribution process in a safe and controlled area of storage. At the close of the day, clear the store of all visitors and lock the door before you remove merchandise. ► Store as much Cannabis as possible in safes or vaults. Do not open your doors to anyone who is not an employee while you are preparing to open or after you have closed, Robbers may dress as employees of delivery companies or repair ► Most robberies are preceded by a casing during which the thieves check out your facility's security and plan their attack. This is the best opportunity to prevent a robbery. AFTER ROBBERY Notify law enforcement immediately Lock the doors, ► Do not let anyone into the crime scene until law enforcement arrive Do not talk to others about what just happened. Keep observations unique and pure While awaiting police, make notes while memory is fresh, including clothing, weapon, physical description etc. ► Do not disrupt the crime scene -- leave everything as it was CASINGS Any prevention is best to prevent Robbery Clues that your store is being cased: Likely to be professional in disguising intent. Yet, after thefts occur, most operators can recall a suspicious situation that might have tipped them off, o Be wary if a visitor; Appears nervous or fidgety Asks unusual questions, such as how many employees are working or the location of your safe or alarm panel ► Doesn't want to give his or her name • Is vague about what he or she is looking for Looks around the facility, and doesn't make eye contact Asks to use the bathroom Is outside your normal customer profile ► Is dressed to disguise appearance (bulky clothes, sunglasses, wig) DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE Section D: Security Plan Employee Safety Education All employees of will be required to complete introductory training relating to facility security, prior to their engaging in any occupancy on the premises. Training will include the following: o Operation of security equipment within the scope of staffs designated roles o Inspecting and monitoring security equipment o Emergency notifications and their meanings ► Response and reporting procedures ► Effective patrolling of the facility ► Identifying opportunities for diversion ► Securing of the premises and assigned work areas ► Critical incidents, situational policies, and procedures ► The proper method for securing cannabis, cannabis products, as well as cash and other inventory at the end of each workday Employee specific policies, training, sample written operational policies and procedures Employees are only allowed to enter the property at specific hours, Employees that are authorized to disarm the alarm system are limited by a schedule of when they can disarm. Notifications of late to arm and disarm are recorded and sent via text messages to manager (s). There is an ongoing log of all alarm system issues stored secured in the cloud, The Mr. Nice Guy 's manager(s) can remotely manage the access to the facility off site with the ability to add and delete users immediately. Only designated employees will have access to certain areas at certain times. The safe is located in a secure cage area and will only be accessible to certain employees for specified times, Employees will only be provided with access control cards when they arrive for work , The managers will provide access control cards at the beginning of the shift and will collect these before employees leave for the day. The employee access control cards will be locked awayforthe night. Office, Limited and Restricted Access are noted in Diagrams. No one will enter Limited Access Areas unless the employee or visitor security protocol is followed. Each new employee receives security training. The Mr. Nice Guy has ongoing training and event review meetings should a security issue arise, There are formal quarterly security meetings with employees, security vendors, local operators, Owner's Association and the City. All invited to participate. In addition to the daily SOP's that were previously mentioned in the operations plan, these other security directives will be implemented regularly as listed below: Weekly Inspections: • • • D ► Perimeter fences and doors for operability and security Exterior and interior doors for proper function and security Exterior lighting for outages or impositions by vegetation/debris Intrusion detection system, test monitoring communications Surveillance system: firmware, software, and operating system Surveillance system: viewing angles, cleanliness, operability Key control logs for anomalies/missing keys o Property for impositions to natural surveillance (abandoned cars) Signage to ensure it remains posted in accordance with the plan Test battery backup systems relied upon by alarms and surveillance Director of Stores inspects every property and the facility with minimum ► Weekly store visits ► Landscapers generally maintain the exterior of the retail properties that may have yard space P Each store is required to power wash the exterior of the building and the parking area • ► ► Monthly Inspections: P Inspect vegetation, ensuring 24-inch shrub limits and canopy limits Audit employee files, determine those due for background investigations Quarterly Inspections: ► P • ► P Meetings will take place with employees. Employees will date and sign in on a sheet to ensure that all employees were present and understand all policies. All employees will receive training on verifying other staff by a visible City provided photo identification badge to be worn by all staff, Employees will be informed of fire extinguisher/first aid kit locations. Physical drills will be conducted for emergency evacuations. A secret code will be used to notify security of suspicious activity. All deliveries, vendors and visitors shall sign in with date and time with security and provide photo identification. Posting of phone numbers and address to nearest Police, Fire Dept. and Hospital. Quarterly meetings with key stakeholders to share information, transfer knowledge and best practices and receive collective input: Facilitation of discussion of recent events and threats List of Partial Invitees > City Staff c Group of Operators Police Department Fire Department p Alarm & Guard Companies DocuSign Envelope ID: 314F4623-2749-460E-A1DF-66191394E6CE ail Section D.6 - INSPECTIONS TERRITORIAL REINFORCEMENT Territorial reinforcement promotes social control through the increased definition of space and improved proprietary concern. An environment designed to delineate private space does two things. First, it creates a sense of ownership. Owners have a vested interest and are more likely to challenge intruders or report them to security or law enforcement personnel. Second, the sense of owned space creates an environment where "strangers" or "intruders" stand out and are easily identified. Territorial reinforcement uses buildings, fences, pavement, signs, lighting, and landscape strategically to express ownership, which defines public, semi-public, and private space. The parking lot and perimeter landscape of our property will be meticulously maintained to communicate that an alert and active presence occupies the space. This includes the following: Private areas, meaning all areas of the structure and access points, will be posted with signage and equipped with overt security features Uniformed security officers assigned to the premises will perform frequent patrols of the parking lot, structure, and perimeters, providing an overt security presence EMPLOYEE HIRING & VENDOR SELECTION Security is enhanced by the selection of qualified personnel to assist with the operation of the business. To promote public perception and the security interests of Mr. Nice Guy , all prospective employees and vendors shall be stringently vetted during the application process. Each employment candidate shall undergo a thorough background check and character assessment and review. Only the most desirable candidates will be selected. Criteria for Non Hire: Has been convicted of a felony offense; Does not meet or exceed City and State Regulations No LiveScan and Background checked prior to employment, or failure Is less than 21 years of age Employees shall, at all times during employment, display their valid City badge. An employee needing to update or report a lost agent card must report the same to Management. See Employee Handbook for specific procedure to be followed in the event of the loss of either the State -issued ID card or the Applicant -issued ID card. Employee shall not be permitted to report to work until they obtain a corrected or replacement State -issued card. Valid issued badges will assist in building safety in that only authorized and trained personnel shall be allowed into the facility VENDORS All vendors shall have all necessary licenses and legal authority to operate its business. Facility will keep paperwork on site to verify Vendor's credentials and necessary permits EMPLOYEE THEFT REDUCTION MEASURES New hires for the retail team must be screened through the LiveScan process and approved by the city/local police to work in the cannabis store. They are fingerprinted with a background check to eventually receive an ID issued by the city/local police. No one is allowed on the retail space without wearing a LiveScan ID that has been issued by the local city/local police department. New hire training includes education on our product handling policies that are helpful in deterring employee and customer theft. Some aspects of this policy will be reviewed in this section. Our armed security guards watch the staff to identify problems as they are handling products or registers. Sales transactions are reviewed every night by the corporate finance team looking for discrepancies and sales associate mistakes, and store sales are reported for reach cash register every three hours to corporate finance. Security cameras are also strategically placed above each cash register and are located all over the building to monitor movement and activities, Proprietary & Confidential Information of National City Community Project. LLC. Not for Publication. Section D: Security Plan