HomeMy WebLinkAbout2023 CON E7 LA LLC - 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 E7 LA LLC, a California LLC doing business as Element 7 National
City ("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 3101
Hoover Avenue, National City, CA 91950, also known as San Diego County APN 562-220-40
(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:
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1. Incorporation of Recitals.
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.
4.1 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.
4.2 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.
6. Operating Requirements.
6.1 Operating Requirements. In addition to any other applicable requirements,
Licensee shall at all times operate the Business in accordance with the operating procedures
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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
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.
6.2 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.
6.3 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.
6.4 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.
7. 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.
7.1 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
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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
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.
7.2 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`h 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.
7.3 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
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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;
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.
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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.
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.
7.4 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
governmental 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.
8. Location Change & Transfer
8.1 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.
8.2 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.
8.3 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
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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,
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.
9. 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.
10. 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.
11. 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.
12. 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.
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13. 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
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 : , e each initia this Section to
further indicate their awareness and acceptance of each a . every pr •
CITY'S INITIALS
i 4. Liability.
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
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City has accepted Conditions nor forfeit City's right to have Conditions corrected at a future
date.
15. Defaults.
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.
16. Termination.
16.1 By Mutual Consent. This Agreement may be terminated in whole or in part by
the mutual written consent of all the Parties.
16.2 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.
16.3 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.
16.4 Surrender or Revocation of Commercial Cannabis Permit. If Licensee
voluntarily surrenders their Permit, or if Licensee's Permit is revoked by City, Licensee shall
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immediately cease all operations at the Business, and this Agreement shall terminate
automatically, without further action required by either Party.
16.5 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.
16.6 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.
17. 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 terms 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.
18. 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
19. 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
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with copies to:
CITY OF NATIONAL CITY
Attn: City Attorney
1243 National City Blvd
National City, CA 91950
Notice to Licensee shall be addressed as follows:
E7 LA LLC
Attn: Roseann Jasso / Robert DiVito
PO Box 388, San Francisco, CA 94104
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.
20. Severability.
If any term, 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).
21. 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.
22. 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.
23. 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.
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24. 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.
25. No Agency, Joint Venture, or Partnership.
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.
26. 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]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates set
forth below.
CITY OF NATIONAL CITY, a municipal E7 LA LLC, a California Limited Liability
corporation
Dated: 7/(Pid=3
Attest:
,-DocuSigned by:
sOkla.
6Zi5'Jif /ti4�JC.if14UY...
City Clerk
Approved as to form:
000A7 cJ
doidc—
City Attorney
5212884.2
Company
ame:
Its: C_F U
Dated: t/ /3
2_oZ5
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 firearms or tasers.
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 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.
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Exhibit B
ELEMENT 7: BUSINESS PLAN
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Daily Construction Project Reports Are Produced for Management Oversight
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2. Daily Operations
Daily operations are guided by four documents produced by Element 7 for all operations — an
Employee Handbook, Distribution SOP Handbook, Manufacturing SOP Handbook, and
a Retail SOP Guide. These documents are continuously updated by our HR team and Retail
Operations department. A 'suggestion box' is kept in the staff room at each location, and at
the head office, to continuously capture feedback while staff are operating the business. In
addition, a Slack Channel used by all staff is further used to capture new ideas and areas for
improvement — in turn, the Employee Handbook, Distribution SOP Handbook, Manufacturing
Handbook, and a Retail SOP Guide are then updated with all relevant suggestions from staff
once a quarter, and then these guides are re -printed and sent to each store with the updates
so that each site always has the most up-to-date materials on hand for operations. In addition,
'Operational Updates' are captured in a cover letter that is distributed to all staff electronically
and by hand so that they are fully aware of any changes to policy.
Staff are encouraged to visit competitive dispensaries so that they can capture additional best
practices and ideas, and they are further incentivised to contribute to the development of the
company through quarterly cash incentives — over 85% of staff participated in this program in
the last 3 months making a suggestion to improve the business. For the Distribution and
Manufacturing operations, best practices are largely gathered from new team members joining
the Element 7 business, and from adjacent industries like fast-moving consumer goods
(Element 7's COO formerly spent 12 years working for PepsiCo managing multi -market
manufacturing and distribution operations).
Best practices are continuously reviewed and adopted by the business and a Monthly
Management Meeting allows our Distribution Team and Store Managers to share new ideas
internally and learn from each other. Element 7 is focused on building a diverse workforce, not
only across the demographics of people we hire, but where we hire them from — over 60% of
our staff are hired from outside the cannabis industry which we believe is a competitive
advantage as we are hiring highly competent retail staff and managers from companies like
Starbucks, Whole Foods, Target, Walmart, Chipotle, and 7-Eleven.
Daily Opening and Closing Procedures
Opening Procedures: The Managers for the businesses (distribution, manufacturing and
retail) will be accompanied by a security guard when unlocking and entering the business (a
guard will be at the premises 30-minutes before operations commence each day and 30-
minutes after operations end each day). Upon entering the building, the Manager will disarm
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ELEMENT 7: BUSINESS PLAN
the alarm (three separate alarm systems for each business use) and turn on all lights and
check the phone for messages. Additional employees will be scheduled to arrive approximately
15 minutes after the Manager. Once the employees arrive, they will be responsible for
completing their assigned tasks, such as reviewing inventory levels, checking overnight orders
received, launch point -of -sale systems, and assemble registers.
Mid -Day Procedures: Throughout the workday, the manager may conduct the following
tasks:
1. Reconcile cash from the previous days operations — cash is stored in an overnight
vault.
2. Assist employees with processing orders and ensuring that they are properly
designated/assigned.
3. Update the track -and -trace system (and METRC), as necessary.
4. Receive shipments with the assistance of another employee.,
5. Manage all City and State reporting and compliance measures.
6. Review staff performance and implement training programs where deficiencies are in
place.
7. Liaise with Element 7 head office teams across critical business operations.
8. Meet with City officials, partners, and key stakeholders to continuously improve
operations and advance Element 7's footprint in the local community.
9. Review marketing plans and meet with vendors and suppliers to ensure we are
optimizing media spend and driving sales growth with partners and partner brands.
Salespersons will be responsible for providing excellent customer service and processing
orders through the day in full City and State compliance. Each person is responsible for
keeping their sales counter clean and orderly,
Closing Procedures: Upon the closure of business each day:
• The Manager will lock all doors.
• The Manager and Inventory Specialists will reconcile the track -and -trace system and
cash.
• The Manager will ensure that all cannabis and cannabis products are securely stored.
• The facility be dusted, swept, mopped, etc. as needed.
• The Manager will ensure that all doors, safes, and vaults are locked and secured.
• All surfaces will be cleaned and wiped. All equipment will be turned off (is necessary)
and cleaned.
• All non -cannabis trash will be taken to the dumpster and sorted for recycling.
• All non -security lights will be shut off.
• The Manager will activate the alarm and lock and exit the building.
• The Manager will be accompanied by a security guard when locking and exiting the
retail store. The security guard will escort the General Manager to their car.
MICROBUSINESS Operations
E7
The proposed three (3) Microbusiness operations are essentially co -managed with regards to
legal entities and reporting; however, each business will have its own Lead with reporting lines
into separate divisions within the company. The next four (4) sections of this section of the
Application will describe in detail how Element 7 will manage day-to-day operations for:
A. Retail Operations (Section 2.1 A-H)
B. Distribution Operations (Section 2.3 A-E)
C. Manufacturing Operations (Section 2.4 A-G)
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D. Microbusiness Operations (Section 2.6)
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RETAIL
2.1A Customer Check -In Procedures
The Customer Intake Process begins when a new, or returning customer, enters the
dispensary and provides their government issued identification to security at the reception area
— all customers enter the premises through the same door and are received in the secured
man -trap lobby:
1. Customers will be greeted by a security personnel at the front door of the property. The
customer's identification card will be checked by the guard at the door for validity and
legitimacy.
2. The customers ID Card is then scanned by the receptionist inside the lobby in order to
verify that the customer is 21 years of age or older — this is done by scanning the card
into the TREEZ POS system and through a secondary visual inspection to ensure that
the person presenting the ID is the same person shown on the ID card.
3. After a short process, customers will then be admitted to the dispensary after the
system retains all information from the customer in the TREEZ system. The customer
will be shown in the system as being 'In Queue' and within the store.
4. If a patient presents a valid physician's recommendation and is at least 18 years of
age, the employee will review the customer's physician's recommendation. A Manager
will be called to double-check any recommendations for medical patients aged 18-21.
5. In the case of a primary caregiver, valid written documentation containing the signature
and the printed name of the medical patient designating the individual as a primary
caregiver is required.
6. After relevant checks are completed, recommendations are scanned into the system
and the patient or primary caregiver will be admitted entry to the retail dispensary.
7. All customers must be 'buzzed -in' using a small button on the base of the check -in
reception desk. A panic button is also installed at this desk for any duress situations.
Secure Man -Trap Lobby: Customers Admitted Entry After ID Checks at Element 7
We implement three primary methods of verifying the validity of a customer's doctor's
recommendation:
1. We compile a list of reputable and compliant medical providers with a sample of a valid
recommendation provided to us by the issuing provider. When a customer provides us
with a doctor's recommendation from our list of verified providers, our staff will review
the recommendation to verify its validity;
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ELEMENT 7: BUSINESS PLAN
2. We verify the doctor's recommendations by contacting the issuing provider by phone if
the recommendation does not appear to be valid.
3. We use https://cannabisverify.com/ to verify the validity of the card presented.
Element 7 will have a man -trap lobby, similar to those shown above from Element 7's
operations in Fort Bragg and Marina — this man -trap lobby ensures that anyone attempting to
enter the retail store must first have their ID card checked before they can enter the retail
shopping area. The lobby has a separate door for entry into the dispensary and another for
exiting the dispensary. The glass used in this lobby is bullet-proof and doors are access
controlled. All camera footage clearly shows the customers face, are recorded in 4K video
format, and are stored for 7 years. There are 5 cameras used in the lobby area and 2 additional
cameras used on the front exterior capturing footage of all persons entering the facility. A
License Plate reader is also installed at the front driveway.
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2.1 B Identification of Location and Procedures for Receiving Deliveries
During business hours, shipments of cannabis goods shall not enter the premises through an
entrance or exit that is available for use by the public. Element 7 proposes to make the
necessary modifications to create access to the facility for the loading and unloading of
deliveries at the rear of the facility which allows for deliveries to be made safely and securely.
Security guards will be notified of all deliveries and are required to be present during any
loading or unloading to oversee the secure transportation of the delivery into the facility. The
loading/unloading area will be under constant video surveillance and properly illuminated. This
loading and unloading area allows for the safe and secure delivery of goods without any
disruption to our retail operations.
Element 7 will 'self -distribute' products to its National City store. All orders will be consolidated
in National City which ensures that a single distribution entity owned and operated by Element
7 will serve Element 7 in National City on arms -length terms and under full State Type 11
License regulations. This significantly reduces public safety risks and ensures that a single
vehicle will deliver all required products to the National City store every 5-7 days (or as needed
based on sales). All deliveries are made between 10am and 5pm. This also allows us to hold
significantly less inventory in each store which reduces the risk of theft and robbery.
Prior to arriving at the facility, the distribution employee delivering shipments will contact the
Element 7 General Manager to inform them when they are 30 minutes away from arriving at
the facility. Upon receiving the 30-minute notification, security guards will conduct a security
sweep of the premises and parking lot within 10-minutes of the vehicle arriving. This includes
inspecting the perimeter of the facility, as well as the loading and unloading area. Upon
clearance, the loading/unloading area will be prepped to receive the shipment. On arrival, the
driver will lock the vehicle and notify reception they have arrived — they will be directed to park
their vehicle at the rear of the facility and to wait for security. The delivering employee will
provide the Security Guard and Inventory Control Manager with a copy of the company's
business license and shipping manifest as a measure to verify that we are permitting an
authorized shipment onto our premises. Simultaneously, we will request to view the
employee's identification badge, a copy of which will already be on file for verification purposes.
The driver will be instructed to reverse their vehicle (small sprinter vehicle) so that goods can
be removed from the rear of the vehicle and immediately transferred to the secured Quarantine
Storage Room. All drivers are required to log -in and sign -in as a visitor and will only be allowed
to visit this one single receiving area for shipments.
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Upon receipt of a shipment, the Inventory Control Manager shall verify that all products have
not exceeded their expiration or sell -by date. If any products have exceeded their expiration or
sell -by date, employee shall notify management and the delivering employee. We shall not
accept any products that have exceeded their expiration or sell -by date. We will return the
expired goods and request that the expired goods be exchanged for sellable goods. If it is
discovered that any product that was purchased is defective, we may return the product in
exchange for a non -defective version of the same product, for product of equal value, or for a
refund (if payment for the shipment has already been paid or transferred).
Additionally, we will not accept cannabis goods unless they are appropriately packaged and
labeled as they will be sold at final sale (note: we shall not package or label cannabis goods
as this is done by State Licensed manufacturers). All items will be inspected to ensure that
they are compliantly packaged and labeled. A packaging, labeling and documentation "cheat -
sheet" (composed of relevant regulations and company policies) will be readily available and
used to inspect every shipment to ensure that we are accepting a compliant shipment and
being provided the required/requested documentation.
Upon receipt of cannabis goods, we will 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, we will record
and document the discrepancy in the track and trace system and any relevant business record
and notify the distribution company immediately. We will not accept any cannabis goods that
are not included on the shipping manifest. The Inventory Manager (IM) will ensure that all
records related to the acquisition of cannabis and cannabis -infused products will include the
following information:
• Strain Type
• Quantity and Variety
• Batch Number
• Name and Registry Identification Number of the licensed operator supplying the
shipment of cannabis and/or cannabis -infused products
• Name and Registry Identification Number of the licensed operator delivering the
shipment of cannabis and/or cannabis -infused products
• Name and Registry Identification Number of the Dispensary Agent receiving the
shipment of cannabis and/or cannabis -infused products
• Date of Acquisition of cannabis and/or cannabis -infused products
As goods are delivered, they shall be immediately transferred to the Quarantine Storage
Room so that the COA Testing Certificate can be verified by the Inventory Control Manager,
and METRC tags applied to products prior to being transferred to the Ambient Storage or Cold
Storage rooms. This room is climate controlled and products should not be left in this room for
more than 24 hours. In addition to verifying the COA, the Inventory Control Manager will also
verify all packaging and labelling is compliant with State Laws. All METRC tags are kept with
the manifest and COA for each order which is compliant with DCC Regulations (and has been
audited by the DCC at other Element 7 locations).
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2.1C Identification of Point -of -Sale System and POS Locations
Element 7's preferred point -of -sale system (POS) is TREEZ which we utilize across all our
licensed dispensaries in California. Within Element 7 National City we have provided for4 POS
Stations initially, with the ability to add 2 more as customer traffic robustly expands. TREEZ
is a point -of -sale system that hosts and maintains the servers, databases and code that
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ELEMENT 7: BUSINESS PLAN
constitutes the point -of -sale system. A number of product experts sit within our team including
our Retail Operations Director, Lake Montalvo, who regularly consults to TREEZ on product
development improvements, Nick Tsambazis, our General Manager for Element 7 Marina, and
Steven Centeno, our Inventory Lead for Element 7 Port Hueneme. This core group are charged
with continuously training existing and new staff on the use of TREEZ within Element 7 stores.
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Each POS Station includes a secured cash drawer, barcode scanner, Microsoft Surface Pro
7 mounted and secured to the POS station, Epson Printer, and spare printing paper. Cash
drawers are locked when not in use and are stored under the POS Station for security
purposes. Each POS Station is continuously monitored by an overhead 4K camera as shown
below so that the product being sold and cash are clearly displayed for each transaction.
4K Video Cameras Record Every Transaction Processed by Element 7
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2.1 D Estimated Number of Customers to be Served per Hour and Day
With a potential customer base of over 25,000 cannabis consumers living within the City and
nearby municipalities, Element 7 knows it would see over 550 customers a day at maturity (30-
50 customers per hour). We believe in a market like National City that 70% of these
customers are looking for 'value' which Element 7 is very well positioned to deliver given our
market scale and vertical integration which allows us to beat most competitors on our product
cost base which we pass on to consumers.
With a retail sales area of 800 square feet, we would have a maximum occupancy of 25
customers at any one time (based on the California Building Code for Retail Sales Stores on
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ELEMENT7: BUSINESS PLAN
Basement or Ground Levels at 30 square feet per customer). With a 50% load factor applied
to this (for customer comfort), we would have a maximum desired occupancy of 12
customers at any one time. With an average customer visit time of 6 minutes, the store
could handle a maximum of 120 customers an hour.
With an estimate of up to 550 customers a day, and operations from 9am to 9pm (12 hours),
we do not forecast any significant issues with customer flow within the store.
Based on our experience in Marina, Rio Dell, Port Hueneme, Firebaugh and Fort Bragg, our
marketing program `smooths out' sales over different days of the week, and hours of the day.
For example, on Mondays which are typically our slowest days of the week, we offer incentives
and discounts to loyal local customers to bundle and save. This activity allows us to increase
sales on what would otherwise be the slowest day of the week.
2.1E Proposed Product Line and Estimates for the Percentage of Sales
Once inside the Dispensary, a range of shopping options from quick -serve grab -and -go,
through to customized shopping guidance will be available. Our facility will sell flower,
concentrates, edibles, topicals and lotions, tinctures, pre -rolls, and accessories (a wide range
of topicals will be sold for elderly and retired locals).
In compliance with state regulations and industry best practices, our product offerings will only
be sourced from licensed and compliant distributors. Our product mix represents cannabis
products that are commonly purchased at retail dispensaries. Based on our experience, we
anticipate selling:
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• Concentrates: 10%
• Edibles: 15%
• Flower: 40%
• Pre -rolls: 15%
• Vape Products: 15%
• Beverages: 5%
Element 7 will stock a range of industry -leading branded products from across California as
demonstrated on the image to the left. We have relationships in place with a number of leading
distributors including Nabis, Herbl, KSS, Humboldt Brands, Falcon, Mammoth, and other
smaller brands — we have negotiated terms with all of these suppliers and a centralized buying
team that manage the relationships across all Element 7 stores.
Major product categories sold by Element 7 will include:
1. Pre -packaged Flower - Pre -packaged Flower products are loose flower buds that
have passed mandatory product testing and are pre -packaged in compliant packaging.
Flower is considered a combustible product that is typically smoked using a pipe or
bong and can be rolled into cone -like cannabis cigarettes.
1. Pre -packaged Pre -Rolls - Pre -Rolls are loose flower buds that have passed
mandatory product testing and are rolled into cone -like cannabis cigarettes.
2. Vaporizer Pens, Cartridges and Batteries - Cannabis concentrate is placed into
cartridges and attached to a vaporizing device that is typically the size of a ballpoint
pen.
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ELEMENT 7: BUSINESS PLAN
4. Concentrates - Cannabis concentrates are proven to have a higher percentage of
cannabinoids due to the extraction process and are typically 'dabbed' which requires
the product to be heated and inhaled.
5. Cannabis -infused Edibles - Ingestion of cannabis -infused food products is an
alternative, non-combustible form of consumption. Typical consumer -grade cannabis -
infused edible products include gummies, chocolates, cookies, and brownies.
6. Tinctures, Topicals, Balms, Ointments, and Creams - These products are infused
with cannabis concentrate that has passed mandatory product testing. Topicals and
ointments are usually sold at dispensaries as cannabis -infused lotions, massage oils,
transdermal patches, lubricants, balms and ointments.
We will have a preference for small / craft cultivators, manufacturers, and distributors located
in San Diego County. Our existing best -practice product procurement plans in Element 7 stores
include clearly defined commercial terms, template supply agreements, vendor risk
management assessments (i.e., are they a stable supplier), cost expectations, defined vendor
management plans, and annual KPI's set for each vendor to ensure shelf space is maximized.
All vendors are subject to our Preferred Vendor Program which scores existing and potential
vendors on a 100-point scale, taking into account their compliance, sustainability, product
quality, reliability, and brand innovation. All vendors are required to be tested by State Licensed
Testing Labs and Element 7 also maintains its own internal Quality Control Program ensuring
packaging, labeling, product materials, ingredients, and claims are substantiated and correct,
and that consumers are getting what they expect — trusted and consistent brands.
Our expected `first order' will be approximately $152,000 based on our market experience
($380,000 retail sales value). We expect to replenish stock weekly and continuously monitor
market trends to ensure we are offering our customers the best products on the market.
Element 7 has a medium -term goal of 30% of the store shelf being Element 7 'owned -brands'.
We have launched 3 brands owned and controlled by Element 7 in 2021 and 2022. These
products are currently grown in Humboldt, Monterey County, and Santa Barbara.
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2.1F Delivery Service Vehicles and Product Security During Transportation
Anticipated Number of Vehicles
Initially, Element 7 anticipates having five (5) delivery vehicles which will start operations 30
days after the dispensary first opens. Element 7 is conscious of its greenhouse gas emissions,
particularly from any vehicles used in day-to-day operations. Our preferred vehicle models are
hybrid vehicles as we need the ability, for safety and security purposes, to operate a vehicle
that runs on both electric and fuel options (Le., in the event of an empty battery, the vehicle will
also have fuel). Our preferred choice is the Hyundai loniq Hybrid Vehicle as it returns 58 miles
per gallon in combined city/highway driving. Further, the vehicle is built with eco-friendly
materials, user-friendly technology, and delivers great handling capability. It comes with plenty
of cargo space, which allows us to install lockboxes to store cannabis products during
transportation. Element 7 will install EV-Charging Stations in the parking lot at the proposed
location which can be used by the general public visiting our store.
Delivery Service Procedures
Delivery Request
Element 7 will prepare both a hard copy and an electronic delivery request receipt for each
delivery of cannabis goods. The delivery request receipt will contain the following information:
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our name and address; the name and employee number of the employee who delivered the
order; the name and employee number of the employee who prepared the order for delivery;
the name of the customer and the customer's assigned identification number that placed the
order; the date and time the delivery request was made; the delivery address; a description of
the cannabis goods requested for delivery, including the weight, volume, or any other accurate
measure of the amount of all cannabis goods requested; 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; and upon delivery, the date and time the delivery was made, and the handwritten
or electronic signature of the customer who received the delivery. At the time of the delivery,
the delivery employee shall provide the customer with copy of the delivery request receipt. The
delivery employee shall retain a copy of the signed delivery request receipt.
Verifvino Identity of Customer
Cannabis goods will only be delivered to the customer named on the delivery request receipt
by the customer. Upon arrival, the driver must review the customer's government -issued
identification and physician's recommendation (if applicable); the driver will verify that the
documents provided in person match the customer's online profile. A mobile 1D Checker (CAV-
3200 VIAGE Model approved for use in California) will be carried by each Driver to check ID's
as required (cloud based).
Element 7 will verify first time customer's physician's recommendation before delivering
cannabis goods. Element 7 will implement two primary methods of verifying the validity of a
customer's doctor's recommendation.
1. Element 7 will compile a list of reputable and compliance providers with a sample of a
valid recommendation provided to us by the issuing company. When a customer
provides us with a doctor's recommendation from our list of verified providers, our staff
will review the recommendation to verify its validity.
2. Element 7 will verify the doctor's recommendations by contacting the issuing provider.
Further, Element 7 will vet every new provider to ensure their credentials and
legitimacy.
Element 7 will attempt to verify the physician's recommendation immediately upon begin
notified that a first-time customer requesting a medicinal delivery. If we are unable to verify the
physician's recommendation within 24-hours we will notify the medicinal customer that we are
unable to fulfill their order because their physician's recommendation could not be verified.
Additionally, upon creating an online customer account, customers will be notified on the
registration page that physician's recommendations will have to be verified before any
cannabis goods will be delivered by Element 7 and that verification can take up to 24-hours.
Delivery Vehicle Insurance
Element 7 will obtain commercial automobile insurance for all company vehicles. The
commercial automobile insurance policy will over the following coverage: At fault accidents,
including coverage for injuries and damages for third parties; Comprehensive and collision
coverage; Accidents involving uninsured motorist; Medical expenses; Legal expenses; etc.
Temperature Control
All vehicles will be equipped with heating/cooling temperature controls to ensure the
preservation and quality of perishable cannabis products. Additionally, any perishable
cannabis products that are required or recommended to be maintained at a refrigerated
temperature will be placed in an insulated cooler tote bag.
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Exterior of Vehicle
Any company vehicle used in the delivery of cannabis goods will not have any marking or other
indications on the exterior of the vehicle that may indicate that the delivery employee is carrying
cannabis goods for delivery.
Delivery Technology
Inventory Tracking
OnFleet is Element 7's preferred online ordering platform with the easiest design for
consumers to purchase cannabis products from dispensaries for pickup or delivery. The
intuitive OnFleet delivery technology platform will allow our delivery team to track and record
information for every online transaction. OnFleet has features to enable us to accept online
orders for pick-up and delivery, fulfill orders, dispatch drivers, and manage inventory,
transactions, and deliveries.
OnFleet seamlessly integrates with our TREEZ platform and automatically pulls our inventory
in real-time to ensure our online menu is always up to date. The OnFleet software simplifies
our inventory from vendor intake to consumer sale. We are able to manage manifests,
packages, and products in real-time. Once the order is accepted the quantity will automatically
be deducted from the inventory. Dispatchers are able to view the courier's current inventory
and amount of each product for even faster delivery times.
Receiving Orders
Upon notification that an order has been placed online, the dispatcher will prepare and assign
orders directly to drivers on the road, and if a driver is carrying unassigned inventory, the
dispatcher will be able to see what products the drivers have on board in real-time. The
software will automatically suggest which driver each order should be assigned to the order
based on the distance to the customer and how many active orders that driver has in his/her
queue. It will also show ETA from the driver's location to the delivery drop-off location.
Customer Identification
First time online customers will be required to create an account before submitting an order.
Customers will be required to create a password protected customer account by
providing/uploading the following information:
• First and Last name
• Contact Information
• Government -Issued Identification
• Physician's Recommendation Letter
Couriers can quickly access customer profiles upon arrival to check their physician's
recommendation expiration (if applicable), any delivery specifications noted, and a copy of
government -issued identification to ensure that the delivery is being completed with the
appropriate customer. Element 7 will verify first time customer's physician's recommendation
by contacting the issuing physician or comparing it with our list of confirmed physicians sample
recommendations on file.
Online Menu
At the focal point of its website, Element 7 showcases all its products in a manner that's easy
for customers to navigate. Additionally, Element 7 will ensure that the menu provides beneficial
information to customers so they can make an educated choice before purchasing any
cannabis and/or cannabis product. For in-store customers our CURA-Al platform uses
machine -based learning and artificial intelligence to match a physician's recommendation with
products in stock and peer -reviewed research and logged customer feedback to recommend
a cannabis profile to a customer, based on real data and collected evidence. CURA-A1 was
developed by MIT graduates partnering with US Government health officials in 2019. Through
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the OnFleet platform, Element 7 will be able to receive detailed delivery analytics of gross
sales, sales by product, tax reporting, and more. The OnFleet platform integrates with TREEZ.
Location
Dispatch is notified when an order is placed, and again when the order is out for delivery. Once
the delivery is complete, dispatch receives a push -notification from each drop-off location once
the transaction is completed. The software permits us to track drivers and their mobile
inventory across geofences, optimize delivery routes, and maximize delivery efficiency.
Product Security During Transport
Element 7 will strictly adhere to all rules, requirements, and regulations regarding
transportation of cannabis within the State of California. No deviation from those rules will be
tolerated or allowed. The Head of Security will implement additional measures beyond the
minimum requirements.
Element 7's delivery process begins when the delivery employee leaves the facility with the
cannabis goods for delivery. The delivery process ends when the delivery employee returns to
the facility after delivering the cannabis goods or attempting to deliver the cannabis goods to
the patient or customer(s). At no time will an Element 7 delivery employee engage in any
activities except for cannabis goods delivery and necessary rest, fuel, or vehicle repair stops.
In the event that an employee leaves the vehicle unattended, he/she will ensure that the vehicle
is locked and equipped with an active vehicle alarm system. All deliveries will be fulfilled at the
rear of the premises.
The order fulfilment boxes containing cannabis to be delivered to patients and customers will
be verified, recorded and sealed. Once sealed they will be loaded into the secure lock boxes
in the rear of the delivery vehicle. No order fulfillment boxes, lockboxes, or cannabis goods will
be visible to the public or accessible through the vehicle. Cannabis goods will be locked in a
fully enclosed box, container, or cage that is secured to the inside of the vehicle. No portion of
the enclosed box, container, or cage shall be comprised of any part of the body of the vehicle
or trailer.
All Element 7 vehicles will be outfitted with a dedicated Global Positioning System (GPS)
device for identifying the geographic location of the delivery vehicle and recording a history of
all locations travelled to by the delivery employee while engaged in delivery. The GPS device
will be owned by Element 7 and used for delivery only. The device will be either permanently
or temporarily affixed to the delivery vehicle and will always remain active and inside of the
delivery vehicle during delivery. At all times, Element 7 will be able to identify the geographic
location of all delivery vehicles that are making deliveries and document the history of all
locations travelled to and by a delivery employee while engaged in delivery.
E 7
2.1 G Conformance with Local and State Laws
Our systems, processes, and operational policies have been developed using best -practices
from our operational dispensaries in Fort Bragg, Rio Dell, Marina, Port Hueneme, Firebaugh,
and South San Francisco (delivery business). Employees are extensively educated on all of
these policies and procedures prior to starting employment at Element 7 (minimum of 80 hours
training), and then on an ongoing annual basis (yearly refresher training). In addition, the
General Manager and Shift Managers will work in an Element 7 dispensary for 2-4 weeks prior
to commencing operations at Element 7 National City — this on-the-job training program
ensures that Element 7 is able to deliver consistent standards and processes across all of its
dispensaries in California.
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ELEMENT 7: BUSINESS PLAN
Element 7's Chief Compliance Officer, Amber Norwood, has developed a Quarterly Audit
Scorecard that scores the retail operations on over 80 checklist items. Stores are scored using
a point and traffic -light scorecard with mandatory and minimum KPI's that must be met. This
process ensures that operations are compliant, consistent, and controlled. The image below
demonstrates some of the items on the Quarterly Audit Scorecard and includes access
controls, operating hours, sale and return of cannabis goods, packaging and labelling,
inventory management, storage, security measures, records management and retention,
waste, transfers, and other day to day operational procedures.
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If an audit is performed and there are either failures or significant 'misses' on performance
standards, a range of 'triggers' may be issued including training, management changes, and
advisory notices to City and State regulatory bodies. Element 7 desires to be the most taxed,
trusted, tested, controlled, and compliant partner that the City of National City could identify
for a cannabis permit. In addition, Element 7 will address the following issues proactively as
we build a sustainable cannabis business in National City.
The following additional standards are in place within the business to ensure full
compliance with the City & State Regulations as they pertain to retail establishments
in the City of National City:
Licensing
Element 7 will apply for (and maintain in full force) a valid Business License from National
City prior to any operations commencing, including the payment of all taxes and fees.
Element 7 will comply with all provisions of the National City Zoning Ordinance.
Element 7 will apply for (and maintain in full force) a valid Type-10 Cannabis License, as
issued by the Department of Cannabis Control. All applicable State Laws will be strictly
adhered to and followed.
No Owner from Element 7 National City will be involved in any other cannabis business
within the City of National City.
No owner shall have been convicted, cited, fined, or penalized by the State or any city,
county, or city and county, or enjoined by any court of law, in the five (5) years
immediately preceding the application for a cannabis business permit or cannabis
business permit renewal, for any unauthorized, unpermitted, or unlawful cannabis
activities.
Element 7 shall procure and provide evidence of insurance which provides the coverage
that the City's Risk Manager determines to be necessary and adequate under the
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circumstances. Element 7 understands that this may require the applicant to provide
commercial general liability, property damage, and automobile insurance, as well as
evidence of worker's compensation insurance, with endorsements as may be
appropriate.
Element 7 shall execute the appropriate legal documents that release the City, its
boards and commissions, officers, officials, employees, and agents from any and all
claims, injuries, damages, or liabilities of any kind arising from: (1) any repeal or
amendment of this Division or any provision of the Zoning Ordinance relating to
commercial cannabis activity; or (2) any arrest or prosecution of applicant or its
officers, managers, employees or agents for violation of state or federal laws.
Element 7 shall execute the appropriate legal documents that indemnifies, defends,
and holds harmless to the fullest extent permitted by law the City, its boards and
commissions, officers, officials, employees and agents from and against 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
related to, the City's issuance of a cannabis business permit, the process used by the
City in making its decision, or the applicant's operations, except such liability caused
by the sole negligence or wilful misconduct of the City.
Element 7 acknowledges that a cannabis business permit issued under this Division is
valid only as to the permittee and approved premises and is therefore non -transferable
to other persons or locations unless such transfer is approved in writing by the City
Manager or his or her designee pursuant to applicable City Manager regulations. No
cannabis business permit may be sold, transferred or assigned by a permittee, or by
operation of law, to any other person or entity without the City Manager's or his or her
designee's written approval. Any sale, transfer, or assignment, or attempted sale,
transfer, or assignment without such approval shall be deemed to constitute a voluntary
surrender of such cannabis business permit and such permit shall thereafter be null and
void.
Element 7 is aware that cannabis business permits must be renewed on an annual basis
prior to expiration by filing the cannabis business permit renewal application form
approved by the City Manager and a renewal fee in an amount set forth by separate
resolution of the City Council, which amount is calculated to recover the City's full cost
of reviewing, issuing, and administering said application.
Security
The premises shall be equipped with, and always be monitored by, a web -based, closed-
circuit television for security purposes and have separate fire and burglar alarm systems.
Exterior lighting on the premises and parking area lighting for the location shall be
balanced and shall not result in glare on adjoining properties, shall complement the
security systems required to ensure that all areas of the premises and parking area are
visible, and shall provide increased lighting at all entrances to the premises, The lighting
shall be turned on from dusk to dawn.
Cannabis and cannabis product shall be stored in buildings that are completely
enclosed, and in a locked vault or safe or other secured storage structure which is bolted
to the floor or structure of the premises.
Windows and roof hatches of the premises shall be secured from the inside with effective
means so as to prevent unauthorized entry and shall be equipped with latches or a
similar mechanism that may be released quickly from the inside to allow exit in the event
of emergency in compliance with all applicable building code provisions.
Exterior doors to the premises shall remain locked from the inside to prevent
unauthorized ingress to the premises. Ingress shall be allowed by means of a remote
release operated from within the premises of the cannabis business. In all cases, doors
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shall remain openable from the inside to allow egress without the use of a key or special
knowledge.
No person shall be in possession of any firearm while on the premises without having
first obtained a license from the appropriate state or local agency authorizing the person
to be in possession of such firearm.
All sales and transfers of cannabis and cannabis products by a cannabis business shall
be fully documented, by an approved point of sale software, authorized by the Police
Chief or their designee, at the time of the sale or transfer. All such records shall be
maintained for a minimum of seven (7) years, pursuant to Title 16, Section 5037 of the
California Code of Regulations.
Element 7 shall identify a designated security representative/liaison to the City, who shall
be reasonably available to meet with the City Manager or his or her designee regarding
any security related measures or and operational issues.
Element 7 shall establish limited access areas and permit only authorized individuals to
enter the limited access areas. Authorized individuals include individuals employed by
the storefront 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 (21) years of age,
and if not employed by the storefront retailer, shall be always escorted by an employee
of the storefront retailer. Element 7 shall 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 Police Chief, or his or her designee, upon request.
Restroom facilities on the premises, if they are made available to customers, shall
remain locked and under the control of management.
Element 7 shall record point -of -sale areas and areas where cannabis goods are
displayed for sale on the video surveillance system. At each point -of -sale location,
camera placement must allow for the recording of the facial features of any person
purchasing or selling cannabis goods, or any person in the retail area, with sufficient
clarity to determine identity.
Element 7 shall hire or contract for security personnel who are at least twenty-one (21)
years of age to provide security services for the licensed premises. All security personnel
hired or contracted for by the storefront retailer shall be licensed by the Department of
Cannabis Control of Security and Investigative Services and shall comply with Chapters
11.4 and 11.5 of Division 3 of the Business and Professions Code.
Any security personnel must wear a uniform bearing the term "SECURITY" on the front
and back of the outermost garments.
Element 7 shall contract with a licensed armored car company to facilitate the secure
movement of cash off -site to a financial institution.
No owner, manager, or employee of Element 7 shall fail to make a report to the Police
Chief, or his or her designee, immediately upon discovery of any conduct which raises
a reasonable suspicion that a misdemeanour or felony crime under the laws of the state
has been committed on the premises.
No owner, manager, or employee of Element 7 shall fail to report any conduct which
raises a reasonable suspicion of a violation of this Division to the Police Chief, or his or
her designee, within twenty-four (24) hours of its discovery.
Neighborhood and Nuisance Management
- Element 7 shall maintain a log of any public nuisance activity on the premises or within
three hundred (300) feet of the premises. The log shall include any information required
by the Police Chief, or his or her designee, including but not limited to the date and time
of the occurrence; the type of activity; the circumstances surrounding the activity; the
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identity of any persons involved in the activity if known; the corrective action taken by
Element 7; and the Police Chief case number if applicable.
Element 7 shall operate in a manner such that the storage of cannabis does not
adversely affect the health or safety of nearby properties through creation of mold,
mildew, dust, glare, heat, noise, noxious gasses, odor, smoke, traffic, vibration, or other
impacts.
Element 7 shall utilize appropriate air purification systems and air scrubbers wherever
cannabis is stored, cultivated, processed, or sold so as to prevent the odor of cannabis
from emanating beyond the walls of the premises.
All cannabis and cannabis products sold by Element 7 must be stored and sold in strict
accordance with state cannabis laws, this Division, and all other applicable regulations.
Element 7 shall not cause or permit the sale or consumption of alcoholic beverages or
tobacco products at the premises or in the parking area for the premises.
Cannabis and cannabis products may not be inhaled, smoked, eaten, ingested, vaped,
or otherwise used or consumed at the premises, in the parking areas of the premises,
within three hundred (300) feet of the premises on the public right-of-way, or in those
areas restricted under the provisions of California Health and Safety Code Section
11362.79.
Element 7 shall operate and maintain an on -site twenty -four-hour landline telephone
number at the premises for receiving complaints and other inquiries regarding the
cannabis business. A person engaged in the management of the business shall be
responsible for receiving, logging, and responding to these complaints and other inquires
on a daily basis. The log shall be maintained accurately.
A sign shall be posted in a conspicuous location inside the premises advising, in English
and Spanish, the following: "Both the sales of cannabis and the diversion of cannabis to
persons under age twenty-one (21) are violations of state law unless that person is at
least eighteen (18) years of age and has a valid physician's cannabis recommendation.
The use of cannabis may impair a person's ability to operate a motor vehicle or heavy
machinery. Loitering at the location of a cannabis business for an illegal purpose is
prohibited by California Penal Code Section 647(h). This cannabis business is registered
in accordance with the laws of the City of National City."
Financial and Sales Management
Monetary contributions or payments to the City shall be made by cashier's check or wire.
No cannabis products shall be sold to a person under the age of twenty-one (21), unless
Element 7 is authorized to sell medicinal cannabis or medicinal cannabis products and
the customer is at least eighteen (18) years of age and has a valid physician's cannabis
recommendation or valid state identification card.
Prior to selling or transferring cannabis or cannabis product to any person, an electronic
age verification device shall be used to determine the age of the person attempting to
obtain cannabis or cannabis products. The electronic age verification device may be
mobile or fixed and must be able to retain a log of all scans that includes the following
information: date, time and age. This log shall be kept for a minimum of one hundred
eighty (180) days.
Element 7 shall have an accounting software system in place to provide point of sale
data as well as audit trails for both product and cash, where applicable. In addition, the
cannabis business shall have a track -and -trace system in place capable of tracking
product movement in compliance with state standards, including compatibility of the
software with METRC, the state track -and -trace system.
Access to the premises shall be limited to individuals who are at least twenty-one (21)
years of age. Notwithstanding, individuals who are at least eighteen (18) years of age
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and in possession of a valid physician's recommendation shall be granted access to the
premises for the sole purpose of purchasing cannabis for medicinal purposes consistent
with the physician's recommendation.
Waste Disposal
All cannabis waste shall be properly disposed. All cannabis waste shall be rendered
unusable and unrecognizable through mixing the waste with a non -consumable medium
so that the resulting mixture is at least fifty (50) percent non -cannabis waste.
Element 7 will work with GAIACA to manage all waste management requirements.
Retail Operations Management
- Element 7 shall only serve customers who are within the licensed premises, or if
deliveries are part of the business model, at a delivery address that meets the
requirements of the City and State.
- The sale and delivery of cannabis goods shall not occur through a pass -through window
or a slide -out tray to the exterior of the premises.
- Element 7 shall not operate as or with a drive-in or drive -through at which cannabis
goods are sold to persons within or about a motor vehicle.
- No cannabis goods shall be sold and/or delivered by any means or method to any person
within a motor vehicle.
- While at the business premises, each owner, manager, and employee shall, at all times
while engaged in the duties of his or her positions, wear in plain sight, on his or her
person and at chest level, a valid identification badge, issued by the Police Chief, or his
or her designee, and containing such information, including a suitable photograph, as
the Police Chief, or his or her designee, may require.
While engaged in the duties of his or her position, but not at the business premises, each
owner, manager, and employee shall at all times have in his or her possession a valid
identification badge, issued by the Police Chief, or his or her designee, and containing
such information, including a suitable photograph, as the Police Chief, or his or her
designee, may require, and upon request by the Police Chief, or his or her designee, or
any other City official charged with enforcing the provisions of these regulations, or any
state official charged with enforcing state law pertaining to commercial cannabis activity,
produce such valid identification badge for inspection.
- No owner, manager, or employee shall engage in any activities on behalf of the cannabis
business without first obtaining a valid identification badge.
- Identification badges shall expire one (1) year after issuance.
- Element 7 acknowledges that identification badges are the property of the City of
National City and shall be immediately collected by the cannabis businesses within
twenty-four (24) hours of their expirations or within twenty-four (24) hours of the
termination of the cannabis business' relationship with the owner, manager, or
employee.
- Identification badges collected by Element 7 shall be provided to the Police Chief, or his
or her designee, within seventy-two (72) hours of their expirations or the termination of
the business' relationship with the owner, manager, or employee.
- Identification badges shall remain at the business premises when not in use. Owners,
managers, and employees shall not take identification badges home or off -premises,
except in the case of traveling off -premises on official business of the cannabis business,
including delivery of cannabis or cannabis products.
Element 7 shall ban, prohibit, or otherwise refuse entry to any person violating the
provisions of this Division. Element 7 shall maintain a log of persons banned, prohibited,
or otherwise refused entry for violating the provisions of this Division. The log shall
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ELEMENT7: BUSINESS PLAN
include any information required by the Police Chief, or his or her designee, including
but not limited to the name (if available), brief description (if name is not available), date
and time of the incident(s), section(s) of this Division violated, and the date the person
was banned, prohibited, or otherwise refused entry.
Element 7 shall designate an on -site representative who shall be present during all hours
of the cannabis business' operations.
Packaging and Labeling
All cannabis and cannabis products shall be packaged in an opaque, tamper -evident,
child -resistant package which is required to maintain the child -resistant properties
appropriate with the intended number of uses of the product. All cannabis packaging
shall be in accordance with Section 26120 of the Business and Professions Code and
any other applicable state law or regulation. For the purposes of child resistant
packaging, a product containing ten (10) milligrams or less of THC is considered a single
use product. For the purposes of child resistant packaging, a product containing more
than ten (10) milligrams of THC is considered a multiple use product.
Single use products can be dispensed in a package that is child -resistant for one (1)
use. As an alternative, single use product may be dispensed in a package that is child -
resistant across multiple uses.
Multiple use products must be dispensed in a container that is child -resistant across
multiple uses. Multiple use products shall not be dispensed in a package that is child -
resistant for one (1) use.
Opaque package shall mean packaging that is constructed or coated in such a manner
as to ensure the contents inside are shielded from view.
Delivery Procedures
Prior to delivering cannabis or cannabis products, and at any time during normal
business hours, each delivery vehicle must pass an inspection and be approved by the
Police Chief, or his or her designee.
Orders for delivery shall be made to Element 7 and cannot be made directly to the driver
of the delivery vehicle.
The cannabis and/or cannabis product transferred through delivery is subject to all other
applicable restrictions and requirements of state cannabis,laws and the Municipal Code,
including being subject to all applicable state and local taxes.
No cannabis or cannabis product shall be visible from outside of the delivery vehicle.
Deliveries shall only be made to customers between 9:00 a.m. and 9:00 p.m.
No cannabis or cannabis products shall be delivered to a person who is under twenty-
one (21) years of age unless medicinal cannabis is being delivered to a person who is
at least eighteen (18) years of age and has a valid physician's cannabis
recommendation.
Prior to transfer of medicinal cannabis or medicinal cannabis products, Element 7 shall
verify the receiving individual's identity and the doctor's recommendation for medicinal
cannabis and/or medicinal cannabis product.
Prior to transfer of cannabis or cannabis product to the customer, all cannabis orders
shall meet all packaging and labeling requirements required by local and state law.
Deliveries of cannabis or cannabis products within the City may only be made to a
physical address.
Every delivery driver shall meet the following requirements:
0 Be an employee of Element 7.
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a Been issued an ID badge by the Police Chief, or his or her designee, in accordance
with these regulations indicating that he or she is an approved delivery driver.
o A delivery driver shall only conduct deliveries on behalf of one (1) retailer per shift.
o Hold a valid California Driver's License appropriate for the class of vehicle he or she
will be driving.
a Have completed a background investigation by the Police Chief, or his or her
designee, that includes a driver's license review.
o Have in his or her possession while conducting deliveries, and present to any peace
officer or City official enforcing these regulations upon request:
• California Driver's License;
• Police Department issued -ID badge indicating that he or she is an approved
delivery driver;
• Vehicle's registration and proof of required insurance;
• A copy of the retailer's cannabis business permit and the delivery manifest.
The delivery driver shall at all times during deliveries carry an operating cell phone to
connect with Element 7 or emergency services as needed.
Any vehicle accident resulting in injury to any person shall be reported to the Police Chief
/ local police where the incident occurred, a manager of Element 7 immediately, and to
the Police Chief, or his or her designee, within twenty-four (24) hours by email including
the date, time, location, involved vehicle and driver, circumstances and local police
department case number.
For any vehicle accident resulting in property damage only, the delivery driver shall
exchange driver, vehicle, and insurance information with all involved parties, and the
accident may be reported to the local police department where the incident occurred, a
manager of the retailer immediately, and the Police Chief, or his or her designee, within
twenty-four (24) hours by email including the date, time, location, involved vehicle and
driver, circumstances, and local police department case number, as applicable.
Any loss of cannabis, cannabis product, or money shall be reported to the local police
department where the incident occurred and a manager of the retailer immediately, and
to the Police Chief, or his or her designee, within twenty-four (24) hours by emailing local
law enforcement including the date, time, location, involved vehicle and driver,
circumstances and local police department case number. Any theft of cannabis,
cannabis product, or money during the delivery process shall be immediately reported
to the local police department where the incident occurred and a cannabis manager
immediately, and, if the incident did not occur within the investigative jurisdiction of the
Riverside County Police Chief.
All cannabis and cannabis product shall be placed in a secure container located within
the delivery vehicle. No cannabis or cannabis product shall be removed from the secure
container until it is being transferred to the intended customer or returned to the cannabis
business.
All money received by the delivery driver shall be promptly stored in the delivery vehicle's
secure container.
The receiving customer shall sign a receipt, delivery log, or other document confirming
that he or she received his or her order.
Element 7 is required to complete a daily delivery log for each delivery vehicle deployed
that day and maintain the delivery log in accordance with all other record keeping
requirements.
Element 7 is required to complete a delivery manifest for each delivery vehicle deployed
that day and maintain the delivery manifest in accordance with all other record keeping
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requirements. During delivery, a delivery manifest shall accompany the driver for the
duration of the delivery and shall be made available upon request to the Police Chief, or
his or her designee, and any other City official charged with enforcing this division.
Upon returning to the business premises, the delivery driver and a manager shall
reconcile the delivery manifest, delivery log, remaining inventory, and all money
received.
Prior to the close of business for the day, a manager shall ensure that all delivery
information is entered into the cannabis business' records in accordance with this
division.
Delivery drivers are not allowed to engage in other forms of commerce using the delivery
vehicle until all cannabis and/or cannabis products and receipts from sales have been
reconciled by the cannabis business at the conclusion of the work period.
In addition to the delivery log and delivery manifest, Element 7 shall maintain detailed
records of transfers of cannabis and cannabis products.
Element 7 shall not deliver cannabis or cannabis product to any jurisdiction that prohibits
deliveries.
Inspections
The Police Chief, or his or her designee, any other City official charged with enforcing
this Division, or any state official charged with enforcing state law regarding commercial
cannabis activity, may enter the cannabis business' premises at any time during the
hours of operation without notice and inspect the premises of any cannabis business as
well as the recordings and records.
Element 7 acknowledges that it is unlawful for any owner, landlord, lessee, manager, or
any other person having any responsibility over the operation of the cannabis business
to refuse to allow, impede, obstruct or interfere with an inspection, or the review or
copying of records and closed-circuit monitoring authorized and required under these
regulations, including but not limited to the concealment, destruction, and falsification of
any recordings, records, or monitoring.
Records Management
Element 7 shall maintain all records and documents required by this Division and any
City Manager regulations.
All records shall be maintained by Element 7 for a period of five (5) years and shall be
made available upon request to the City Manager, any City official charged with
enforcing the provisions of these regulations, or any state official charged with
enforcing state law regarding commercial cannabis activity.
At the request of the City Manager, any City official charged with enforcing this
Division, or any state official charged with enforcing state law regarding commercial
cannabis activity, all records required by this Section shall be made available in
standard electronic format which shall be compatible with Microsoft Office programs
and which can easily be imported into either Excel, Access, or any other contemporary
software program designated by the City Manager.
All records shall be stored by Element 7 at the location in a printed format in a fire-
proof safe or in an unalterable electronic format with a documented system for regular
information backup that is satisfactory to the City Manager.
No later than September 30th of every year, Element 7 shall file with the City Manager
an audit of its financial operations for the previous calendar year, completed and
certified by an independent certified public accountant in accordance with generally
accepted auditing and accounting principles. The audit shall include but not be limited
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to a discussion, analysis, and verification of each of the records required to be
maintained in this Division. The information contained in the audit shall be made
available in standard electronic format which shall be compatible with Microsoft Office
programs and which can easily be imported into either Excel, Access, or any other
contemporary software program designated by the City Manager.
Permit Revocation
Element 7 is aware and acknowledges that a cannabis permit may be revoked for any of the
following reasons:
Element 7 has violated any of the requirements of the Municipal Code including the
operating conditions set forth in this Division or any applicable City Manager regulations.
Element 7 is being operated in a manner that constitutes a public nuisance, as defined
in the Municipal Code or Sections 3479 and 3480 of the California Civil Code, on or
within three hundred (300) feet of the premises.
Element 7 has ceased to operate for thirty (30) consecutive days or more.
Element 7, and/or an owner, manager, and/or employee, has been convicted of an
offense.
Element 7 has been convicted, cited, fined, or penalized by the State or any city, county,
or city and county, or enjoined by any court of law for any unauthorized, unpermitted, or
unlawful cannabis activities.
Element 7 has been convicted, cited, fined, or penalized by the State or any city, county,
or city and county, or enjoined by any court of law for cultivation or production of a
controlled substance on public or private lands.
Element 7 is being operated in a manner which conflicts with or violates state cannabis
laws.
Element 7's cannabis use permit issued has been terminated or revoked.
Element 7's state license has been suspended, terminated, or revoked.
The City Manager determines that Element 7's application contained a material
falsehood or misrepresentation and/or omission of information required by these
regulations, any applicable City Manager regulations, and/or the approved application
form.
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2.1 H Track and Trace, and Diversion Prevention
Element 7's preferred point -of -sale system (POS) is TREEZ, which we utilize across all our
licensed dispensaries in California. TREEZ is a point -of -sale system that hosts and maintains
the servers, databases and code that constitutes the point -of -sale system. The system is
customizable and compliant with local and state laws and regulations and has an API
integration key with METRC which is managed by our Head of Technology. The POS provides
intuitive, reliable and scalable solutions for Element 7.
We ensure cannabis products are not diverted through the following policies:
We only purchase products frorn State Licensed Distributors
2. All products are brought into the dispensary using METRC and TREEZ.
3. All products are tagged with a METRC compliant tag.
4. Access to storage rooms is highly restricted and controlled through an access control
system.
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5. All access to restricted rooms is controlled by the access control system integrating
with the HIK camera system — unauthorized use of another employee's access control
card creates a `flag' in the system.
6. Inventory counts are conducted bi-weekly and monthly.
7. All discrepancies are reported to the City and DCC.
TREEZ has streamlined data entry, inventory management and reporting by developing
Stash, a mobile inventory management application that requires the use of a handheld
scanning device that easily identifies, records and manages inventory. In a highly regulated
industry that depends on accurate reporting, being able to utilize state-of-the-art technology
that can push/pull data, in real time, towards the State's mandated track and trace system,
METRC, is a powerful tool that ensures compliance and success. Records pertaining to
customer transactions, denials of sale, inventory acquisitions, management, movement,
cannabis waste disposal, incident reports and corrective actions can be migrated from
electronic devices that are used to perform functions through the POS onto our secure and
encrypted cloud -based data system via file migration, which is facilitated by our data system.
All Inventory Associates and Managers will hold their own Login for METRC and undergo
mandatory training. These employees will also be trained across all METRC functions at
Element 7's Marina store by Nick Tsambazis who is Element 7's product knowledge expert on
METRC and TREEZ. Element 7 regularly complies with any DCC directives as they are
received.
We recently completed an un-announced visit and audit from the DCC in February 2022 and
passed that audit with no issues. The DCC inspected all intake, customer management,
inventory, security, and compliance requirements which are the same SOP's we use across
all Element 7 stores in California.
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DISTRIBUTION
Element 7 have proposed operating an A -Type and M-Type State Distribution License at the
Facility, which is required for picking up and transporting raw materials for our manufacturing
operations and selling finished packaged products to Element 7's dispensaries in the State of
California. Element 7 will strictly adhere to all rules, requirements, and regulations regarding
shipment of adult -use and medical cannabis to licensed manufacturers, dispensaries and
delivery operations (non -storefront retailers) within the State of California as they are created
and modified by City and State legislators. No deviation from those rules will be tolerated or
allowed.
Transportation Procedures
The following requirements apply when transporting cannabis goods between licensees or
licensed premises:
• All vehicles transporting cannabis goods will be required to have a motor carrier
permit.
• Transportation by means of aircraft, watercraft, drone, rail, human powered vehicle,
and unmanned vehicle is prohibited.
• In no circumstances will non -cannabis goods be transported with cannabis goods.
• Vehicles and trailers transporting cannabis goods are subject to inspection by the
❑epartment of Cannabis Control at any licensed premises or during transport at any
time.
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2.3A Delivery Drivers, Hours of Delivery, and Vehicles to be Used
• No person under the age of 21 years old will be in a commercial vehicle or trailer
transporting cannabis goods.
• One (1) driver will be employed by Element 7 — two other persons within the
❑istribution business will be cross -trained for all driving operations required so that in
the event of injury or illness, the business can continue to operate.
• Only employees of Element 7, and/or security personnel, will be in a vehicle while
transporting cannabis goods.
• An employee will, during deliveries, carry a copy of Element 7's License, the
employee's driver's license, a physical copy of the shipping manifest, the COA's for
the products, METRC Tags for each product, and an employer provided badge
containing a picture and the name ofthe delivery employee.
• Employees will not consume cannabis goods or be under the influence of any
substance that impairs the ability of the employee while delivering cannabis goods.
• Element 7 will use small sprinter vans for all deliveries. Element 7's preferred vehicle
is a small Ford Transit Connect vehicle with a DEA cage fitted at the rear of the cargo
hold (vehicle shown below).
• All deliveries will be made between 8am and 5pm daily. All vehicles must return to the
Distribution Hub at the end of each day.
Ford Transit Connect Distribution Vehicle
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2.3B Transportation Security Procedures
• Cannabis goods will only be transported inside of a vehicle or trailer and will not be
visible or identifiable from outside of the vehicle or trailer.
• A DEA cage will be installed inside of the delivery vehicle.
• A vehicle used for the transportation of cannabis goods will be outfitted with a
dedicated Global Positioning System (GPS) device for identifying the geographic
location of the delivery vehicle. A dedicated GPS device does not include a phone or
tablet. The device will be either permanently or temporarily affixed to the delivery
vehicle and will remain active and inside of the delivery vehicle at all times during
delivery. At all times, Element 7 will be able to identify the geographic location of all
delivery vehicles that are making deliveries for Element 7 and will provide that
information to the City upon request.
• Cannabis goods will be locked in a DEA cage that is secured to the inside of the
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vehicle cargo hold.
• While left unattended, vehicles will be locked and secured.
• Element 7 will not leave a vehicle containing cannabis goods unattended in a
residential area or parked overnight in a residential area.
• Element 7 will have a vehicle alarm system on all transport vehicles and trailers.
Motion detectors, pressure switches, duress, panic, and hold-up alarms will also be
used by the driver in the event of duress or panic.
• Packages or containers holding cannabis goods will not be tampered with, or opened,
during transport.
• Element 7 will only travel between its shipping or receiving cannabis goods and its
own licensed premises when engaged in the transportation of cannabis goods.
Element 7 may transport multiple shipments of cannabis goods at once in accordance
with applicable laws.
• Employee transporting cannabis goods will only travel between licensees shipping or
receiving cannabis goods and its own licensed premises when engaged in the
transportation of cannabis goods. The distributor may transport multiple shipments of
cannabis goods at once in accordance with applicable laws. A distributor will not
deviate from the travel requirements described in this section, except for necessary
rest, fuel, or vehicle repair stops.
• All delivery drivers will be Live Scanned and Background Checked prior to full-time
employment with Element 7.
• Where possible, all pick-ups and deliveries would be made within a sally -port facility.
• The Driver will call the Element 7 store 30-minutes and 10-minutes before each
delivery so that the store may secure the premises as needed.
• All deliveries will be made between 8am and 5pm Monday to Friday.
• Drivers will call the Distribution Hub at least once an hour to check -in. Calls will also
be made after each successful pick-up or delivery.
• All Drivers will also undergo BSIS Guard Card Training for extra vigilance and training.
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2.3C Inventory Receipt, Processing, Storage, and Security
• Prior to transporting cannabis goods, Element 7 will generate a shipping manifest
through the track and trace system for the following activities:
(a) Testing and sampling of any products as per latest DCC Regulations which
were amended in Q1 2022;
(b) Sale of cannabis goods to a licensee;
(c) Destruction or disposal of cannabis goods; and
(d) Any other activity, as required pursuant to this division, or by any other
licensing authority.
• Element 7 will securely transmit the manifest to the Department of Cannabis Control
and the licensee thatwill receive the cannabis goods prior to transporting the cannabis
goods.
• Element 7 will ensure and verify that the cannabis goods being taken into possession
for transport at the originating licensed premises are as described and accurately
reflected in the shipping manifest.
• Element 7 will not take into possession or transport:
(a) Any cannabis goods that are not on the shipping manifest; or
(b) Any cannabis goods that are less than or greater than the amount reflected on
the shipping manifest.
• Element 7 is responsible for any discrepancies between the shipping manifest and the
cannabis goods in its possession during transport, and subject to any enforcement or
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disciplinary action related to such discrepancy.
• Element 7 will not void or change a shipping manifest during transport, or after
departing from the originating licensed premises.
• A shipping manifest will accompany every transport of cannabis goods.
• The licensee receiving the shipment will maintain each electronic shipping manifest.
Upon receipt of the transported shipment, the licensee receiving the shipment will
submit to the licensing authority a record verifying receipt of the shipment and the
details of the shipment.
• All deliveries will be managed through METRC and DISTRU — Element Ts preferred
software for managing cannabis distribution.
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2.3D Quality Control Procedures for Packaging, Labeling, and Testing
Product quality, consumer and employee safety are of critical importance to Element 7 and
are the foundations on which we have built our business. The steps that will be taken to ensure
the cannabis products are safe, pure, free from contaminants and consistent in terms of our
quality standards are as follows:
1. Cannabis Products will only be purchased from a State Licensed Distributor. Once
a potential State -Licensed Distributor is identified, we will obtain licenses from the
Distributor and confirm the validity of those licenses with the State of California
cannabis licensing databases.
2. Once confirmed, a list of products will be reviewed to determine what products best
meet our client's holistic wellness needs.
3. Upon selecting the desired products, we will obtain from distributors the names of the
cultivators and manufacturers responsible for production of selected products and
confirm proper and valid licensing for these operators as well.
4. All Products must be certified as being valid by a Licensed State Approved Testing
Company (this process will be managed by the Distributor and checked for
compliance by Element 7 at two points - by the Head of Compliance and the Head of
Inventory).
5. All products must be packaged and labelled according to State Regulations regarding
the packaging, quality and product safety of such products (this process will be
managed by the Distributor and checked for compliance by Element 7).
6. Must be sold by the 'Use By' date on the product packaging.
7. Must be stored in either an ambient, cold or walk-in safe room with humidity, light and
temperature controls at Element 7.
8. Triggers will be keyed into the Inventory Management Software (DISTRU) to ensure
that alerts are continuously sent to the General Manager and Head of Inventory within
each retail outlet so that the business is constantly aware of the Use By and Best By
dates for all products in its handling.
9. Testing Certificates will be centrally stored online for both business and customer
access. QR Codes will be attached to every receipt issued by Element 7 that will
enable any patient or customer to scan the QR Code and see the individual test
results for every product they purchased on one convenient and easy to use platform.
Product Recalls
Cannabis may be returned for several reasons:
• It is no longer needed by the patient or customer;
• It is found to be defective by the patient or customer; or
It has been recalled due to quality concerns with the associated batch - either by the
Manufacturer, Distributor or Retailer.
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Product No Longer Needed
If cannabis is returned because it is no longer needed and the product is still sealed, pending
verification that it was in fact dispensed or sold by Element 7, the patient or customer will
receive a receipt indicating the type, date, and amount of returned cannabis, and their
purchase will be refunded in full. Products no longer needed by patients and customers must
be returned within 7-days of purchase and must be accompanied by the original receipt.
Products that are opened or partially consumed will only be refunded in the product is
defective. Element 7 will return and destroy all such products at the Distribution hub.
Product Returned as Defective
Element 7 believes that a patient -friendly return policy is essential to all aspects of our
operation. We would like to be made aware as soon as possible of any product safety issues
that have escaped our screening process so that we can promptly analyze and correct the
problem. An unaccepting attitude toward product returns will only discourage reporting of
quality concerns and encourage diversion for monetary gain. We will serve our mission better
by supporting the return of products that patients find unsatisfactory. Our goal is to implement
a policy that neither discourages nor incentivizes returns.
Any products returned for quality reasons are weighed and sent for inspection and analysis.
If evidence of pests, contamination, or other defects is found, the inventory tracking system
will identify all products derived from the same plant or batch (regardless whether they are still
in our possession or have been dispensed to consumers), allowing us to do wider testing and
remediate, protect, or dispose of inventory as needed and recall products when necessary.
Customers and Patients will be informed of our return policies and rules both verbally and in
writing when making a purchase. We will make sure patients understand that:
• Cannabis damaged by improper storage by the patient may be returned, but shall not
be replaced,
• The cannabis must have in fact been purchased at our facility and have been the most
recent purchase made by the patient.
Product Returned for Product Quality Issues
The General Manager at the Facility will institute the Product Recall Program should any of
the cannabis products be shown to be, or potentially be, defective or have a reasonable
probability that their use or exposure to the product will cause adverse health consequences.
This Product Recall Program includes the method of identification of the products involved;
notification to the distributor that supplied the product and then associated steps for recovering
and destroying the product.
Element 7 will have all of information necessary for any product recall which is stored within
the Facility Data Management System. All information concerning the product, the unique
serial number and the batch number will all be readily available within such System.
Accordingly, Element 7 will not need to undertake any extraordinary measures to gather and
disseminate the necessary information.
Should a product recall be warranted the notice will include the following information:
• The reason for the recall and product failure;
• Identifying information for the cultivation center involved;
• Identifying information about each patient that received any of the recalled medical
cannabis;
• Product(s) involved;
• Batch numbers;
• Unique serial number tying the product to the cultivation center and batch number; and
• Date that the product was sold to the customer or patient.
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With the relevant procedures in place at the point of manufacture and distribution, and State -
Licensed Testing in place for every gram and product purchased by Element 7, Element 7
would not expect the need to ever require a Product Recall, however, if the need did arise, it
would absolutely by ready, willing and able to manage such requirements.
The Employee Training Program built for and managed at the Facility would run employees
through `simulated product recall scenarios' so that they are properly trained and ready, if ever
the situation requires.
Such forward thinking planning and training would put Element 7 at the forefront of the industry
in terms of both product quality and product management.
Maintaining Product Quality and Destruction of Products
1. Unusable marijuana inventory will include a description of and reason for the marijuana
being disposed of, date of disposal, the method of disposal and the name and registry
ID number of the employee responsible for the disposal,
2. Element 7 will destroy and dispose of any outdated, damaged, deteriorated,
misbranded or adulterated cannabis along with all cannabis waste. Once said
cannabis has been identified, tagged, weighed and logged into the tracking system, it
will be moved by General Manager to the disposal areas.
3. The process of destruction is to verify the weight of medical cannabis materials, run all
waste and unusable medical cannabis materials through a wood chipper thus chopping
it into the smallest of fragments, then mixing it in a turn style tumbler with a 50% by
volume of soil rendering it useless.
4. Upon taking the useless soil and cannabis mix from the tumbler the mixture will be
bagged in black 3 ml thick contractor trash bags and taken by the General Manager to
a locked dumpster held in the secured loading zone until a licensed landfill operator
picks it up for transport to the landfill. This dumpster is never unlocked and never
outside of the locked loading zone except when being emptied by the licensed landfill
operator.
5. GAIACA will collect all cannabis waste materials which will be stored on -site in a
dedicated room.
Labelling and Packaging
• Any edible cannabis or edible cannabis products sold on our website shall be labelled
and placed in tamper -evident packaging which meets the requirements of California
Business and Professions Code (Section 19347), as the same may be amended from
time -to -time or superseded or replaced by subsequent State legislation or by any
department or division of the State of California.
• All items to be sold or distributed shall be individually wrapped at the original point of
preparation by the business permitted as a commercial cannabis manufacturer.
Labelling must include a warning if nuts or other known allergens are used and must
include the total weight (in ounces or grams) of cannabis in the package.
• A warning that the item is a medication and not a food will be clearly legible on the
front of the package and/or must comply with state packing requirements.
• The package will have a label warning that the product is to be kept away from children.
The label will also state that the product contains cannabis and must specify the date
of manufacture.
• Any edible cannabis product that is made to resemble a typical food product must be
in a properly labelled opaque (non -see -through) package before it leaves the
commercial cannabis manufacturing business.
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Labelling Specifications
To comply with the Medicinal and Adult -Use Cannabis Regulation and Safety Act
(MAUCRSA), all packaging labels will contain the following information, prominently displayed
and in a clear and legible font:
• The cultivation and manufacture date and source of medical cannabis;
• The statement, "SCHEDULE I CONTROLLED SUBSTANCE";
• The statement, "KEEP OUT OF REACH OF CHILDREN AND ANIMALS" in bold print;
• The statement, "THE INTOXICATING EFFECTS OF THIS PRODUCT MAY BE
DELAYED BY UP TO TWO HOURS" for any edibles.
• The statement, "THIS PRODUCT MAY IMPAIR THE ABILITY TO DRIVE OR
OPERATE MACHINERY. PLEASE USE EXTREME CAUTION" where relevant.
• The statement, "WARNING: This product contains a chemical known to the State of
California to cause cancer."
• For packages containing only dried flower, the net weight of medical cannabis in the
package;
• A warning if nuts or known allergens are used in the manufacturing of the medical
cannabis products;
• A list of ingredients and pharmacologically active ingredients, including but not limited
to, tetrahydrocannabinol (THC), cannabidiol (CBD), and other cannabinoid content,
the THC, CBD, and other cannabinoid amount in milligrams per serving, servings per
package, and the THC, CBD, and other cannabinoid amount in milligrams for the
package total.
▪ A clear indication, in bold type, that the product contains medical cannabis;
• Any other requirement set by the Department or the California Department of Public
Health; and
• Information associated with the unique identifier issued by the California Department
of Food and Agriculture pursuant to Section 11362.777 of the Health and Safety Code.
Each package of medical cannabis will include a patient educational -safety insert. The insert
will advise patients on the following:
Method or methods of administering individual doses of medical cannabis;
• Any potential dangers stemming from the use of medical cannabis;
How to recognize what may be problematic usage of medical cannabis and how to
obtain treatment for problematic usage;
The side effects and contraindications associated with medical cannabis, if any, which
may cause harm to the patient; and
How to prevent or deter the misuse of medical cannabis by children.
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2.3E Conformance with Local and State Laws
Element 7 will comply with the following operating requirements:
• A cannabis distribution facility will only procure, sell, or transport cannabis or adult-
use/medical cannabis products that are packaged and sealed in tamper -evident
packaging that uses a unique identifier, such as a batch and lot number or barcode,
to identify and track the cannabis or cannabis products.
• A cannabis distribution facility will maintain a database and provide a list of the
individuals and vehicles authorized to conduct transportation on behalf of the
cannabis distribution facility to the City Manager or designee.
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•
•
•
•
•
Individuals authorized to conduct transportation on behalf of the cannabis distribution
facility will have a valid California Driver's License.
Individuals authorized to conduct transportation on behalf of the cannabis distribution
facility will undergo a fingerprint -based criminal history records check conducted by
the City Police Department and will not have been convicted of an offense listed in
the Municipal Ordinance.
Individuals transporting cannabis or cannabis products on behalf of the cannabis
distribution facility will maintain a physical copy of the transportation request (and/or
invoice) and will make it available upon request of agents or employees of the City
requesting documentation.
During transportation, the individual conducting transportation on behalf of the
cannabis distribution facility will maintain a copy of the cannabis distribution facility's
cannabis facility regulatory permit and will make it available upon request of agents
or employees of the City requesting documentation.
A cannabis distribution facility will only transport cannabis or cannabis products in a
vehicle that is (a) insured at or above the legal requirement in California, (b) capable
of securing (locking) the cannabis or cannabis products during transportation, and (c)
capable of being temperature controlled if perishable cannabis or cannabis products
are being transported.
Required Transport Vehicle Information
• Element 7 will provide the following information to the Department of Cannabis Control:
(a) Proof of ownership or a valid lease for any and all vehicles and trailers that will
be used to transport cannabis goods;
(b) The year, make, model, license plate number, and numerical Vehicle
Identification Number (VIN) for any and all vehicles and trailers that will be used
to transport cannabis goods; and
Proof of insurance for each vehicle and trailer used to transport cannabis
goods.
• Element 7 will provide the ❑epartment of Cannabis Control with the required transport
vehicle information in writing for any new vehicle or trailer that will be used to transport
cannabis goods prior to using the vehicle or trailer to transport cannabis goods.
• Element 7 will provide the Department of Cannabis Control with any changes to the
information required by this section in writing within 30 calendar days.
(c)
Deliveries
• Upon delivering cannabis goods to another licensee, Element 7 will verify that the
delivery is consistent with the shipping manifest.
• Element 7 may verify that the cannabis goods are accurately reflected in the shipping
manifest by confirming that the number of boxes of cannabis goods, type of cannabis
goods, wright and/or units of cannabis goods, matches the label on the boxes
containing the cannabis goods.
Vehicle Maintenance and Inspections
• Element 7 will regularly inspect vehicles for damage and necessary repairs.
• Element 7 will regularly maintenance all vehicles to ensure their safe operation
including, but not limited to, oil changes, wheel aliments, flushing the engine, etc.
• A maintenance and inspection log will be maintained by Element 7 and updated
whenever any vehicles are maintained or inspected.
Vehicle Accidents and Breakdowns
• If possible, the driver of a vehicle transporting cannabis or cannabis goods will secure
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the vehicle and ensure the storage compartment remains locked whenever:
(a) The delivery vehicle has been involved in a vehicular accident; or
(b) The delivery vehicle suffers from a mechanical problem during transportation.
• The delivery employee will immediately report any vehicle incident to management.
• The delivery employee will not leave the accident or breakdown area, expect for a
medical emergency or safety concerns.
• Management will draft a written report about the incident and enter it into the track and
trace system. The report must include:
(a) The date and approximate time of the incident;
(b) The name of the employee involved;
(c) A description of the event, including a statement from the employee; and
(d) Any injuries or property damage incurred.
In addition, in conformance with 9.60.290 of the National City Regulations:
No non -cannabis goods or accessories will be stored at the Property that are to be
sold to another party on any licensed premises.
All cannabis `batches' received shall be tested at an approved and licensed Testing
Lab. Testing Labs shall select the representative samples.
All cannabis goods shall be distinctly and separately stored at the Property from other
cannabis goods.
The distributor shall 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.
A distributor or an employee of the distributor shall 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 one hundred eighty days, pursuant to Title 16, Section 5305 of the
California Code of Regulations.
A distributor shall 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.
MANUFACTURING
Element 7 manufactures a range of cannabis products and brands to meet the growing demand
for these goods from patients and consumers in California. Manufactured extracts, edibles and
topicals are the fastest growing categories in the industry and Element 7 produces a range of
in-house cannabis brands to meet this demand.
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2.4A Manufactured Cannabis Products
Element 7 will manufacture, and package finished cannabis products in the form of extracts /
concentrates, edibles, tinctures, and creams/ lotions. Our product range, branding, and pricing
will largely be determined by analyzing industry data, consumer trends, consumer need -state
analysis and a range of other data and insights to create the optimal go -to -market product and
packaging mix. Manufactured products will either be produced and packaged as single extracts
and concentrates or combined with holistically natural and organic ingredients to create a
homogenized material with a consistent cannabinoid profiles and potency.
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Concentrates and Extracts
Element 7 is not planning to conduct large-scale extraction at the site as the cost of production
and the Capital Investment is not feasible versus the cost that we can currently purchase
distillate and resin on the market. In some cases, our projections show that we can source this
from other manufacturers at a cheaper price than we could deliver through our own extraction
operations. Rather, we will focus our efforts on using these raw materials to infuse, process,
and package into a range of branded finished goods for sale at Element 7 stores across
California. Element 7 would plan to produce hash and rosin at the facility which are non-volatile
extraction methods (hash uses ice water extraction methods, and rosin uses hand -controlled
presses to extract the oils from the cannabis plant).
Edibles
Manufacturing Technicians will combine sustainably sourced, organic fruits, grains, sugars,
nuts, seeds, chocolates, and other ingredients with cannabis oils to create a spectrum of
palatable edibles under the Element 7 brand.
Topicals
Element 7 will produce finished cannabis products in the form of topical applications, including
lotions, creams, salves, balms, and/or moisturizers.
Tinctures
Element 7 will manufacture tinctures in a variety of cannabinoid profiles and flavors available to
enhance product diversity and therapeutic options for its customer base. Element 7 will also
produce finished medical cannabis products in the form of semi -viscous liquid tinctures.
Tinctures will be vegetable glycerin -based and may be applied by a glass and rubber self-
contained liquid dropper. Tinctures will have consistent cannabinoid profiles. Processing
Technicians will bottle tinctures in accordance with industry best practices. Technicians will
produce tinctures from medical cannabis oil that contains activated cannabinoids and add
material to food -grade glycerin and other natural or organic sweeteners and/or flavors to
enhance the palatability of the finished product. Agave nectar will be a desired sweetener for its
low viscosity at room temperature.
Pre -Rolls and Joints
Pre -Rolls and joints will be made from a range of flower -grade products sourced from the
market, using pre- roll machinery equipment that produces up to 2,000 pre -rolls an hour.
Packaged Flower
Element 7 will produce 8ths, '/'ers and full ounce packages of flower sourced from indoor,
outdoor, and mixed -light cultivators across the State.
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2,4B Quality Control Procedures
Each unique formulation of cannabis -derived product to be produced will have a standard
manufacturing protocol. The manufacturing protocol will be developed by the Head of
Manufacturing and include the following, as applicable:
• Identity of the product.
• For each formulation of product:
(i) The nominal batch size;
(ii) Identity of each component to be used in the batch;
(iii) Weight or measure of each component to be used in the batch, including the unit
of measure and a statement of any range or variation in the weight or measure;
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(iv) A statement of any intentional overage amount of a component; and
(v) Name and amount of each ingredient that will be declared on the product's
labeling.
• A statement of theoretical yield for each significant process step and at the end of
manufacture, including the acceptable maximum and minimum percentages of
theoretical yield.
• Written instructions or cross references to standard procedures for the following
(i) The execution of each process step;
(ii) Production process specifications;
(iii) Monitoring of production process specifications;
(iv) In -process material specifications;
(v) In -process material sampling, testing, and/or examination;
(vi) Cannabis -derived product sampling, testing, and/or examination; and
(vii) Additional applicable procedures to be followed, if any.
• Manufacturing protocols will be written with the intent to provide not less than 100
percent of the labeled or specified amount of cannabis and any other ingredient for which
a quantitative label claim is made, throughout the shelf life of the product.
• The production process described in the manufacturing protocol will ensure that
cannabis -derived product specifications are consistently met.
Quality Control
The Head of Manufacturing and Compliance Manager will randomly select finished, packaged
samples and test them for potency and the presence of microbial contaminants. A
representative sample of each batch or lot of component, cannabis, or cannabis -derived product
will be collected by removing and compositing portions of material or units from throughout the
containers in the batch or lot to be given to a licensed Distributor.
Cannabis -Derived Product Specifications
Manufacturing operations will establish specifications for the identity, purity, strength, and
composition of each cannabis -derived product manufactured by the operation. Manufacturing
operations which receive cannabis -derived product for further processing must establish
specifications to provide sufficient assurance that the product received is adequately identified
and is consistent with the purchase order.
For every batch or lot, or for a subset of cannabis -derived product batches or lots identified
through sound statistical sampling plan, the operation will verify that the batch or lot meets
product specifications for identity, purity, strength, and composition, to the extent that
scientifically valid test methods exist for these specifications via a state -licensed testing
laboratory.
Product Discrepancies
Any unexplained occurrence or discrepancy, and any failure of the cannabis -derived product to
meet its specifications or requirements, must be documented and investigated. The
investigation must extend to any related batches that may have been associated with the same
specific failure, discrepancy, or problem; this May include, but is not limited to, batches of the
same cannabis -derived product, other batches processed on the same equipment or during the
same time period, and other batches produced using the same Tots of components.
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2.4C Inventory Control Procedures
The facility will have separate or defined areas, or other control systems such as computerized
inventory controls or automated systems of separation, to prevent cross -contamination and
mix-ups of components:
o Receipt, identification, storage, and withholding from use of quarantined
components;
o Storage of approved components, packaging components, cannabis, or
cannabis -derived products;
o Storage of rejected components and cannabis waste pending return to their
supplier or destruction;
o Storage of in -process materials pending normal further processing;
o Storage of components pending reprocessing;
o Manufacturing operations;
o Packaging and labeling operations;
o Separation of the manufacturing, packaging, labeling, and holding of different
product types including different types of cannabis or cannabis -derived
products and other products handled in the same physical facility; and
o Performance of laboratory analyses and storage of laboratory supplies and
samples, as applicable.
Ali inventory will be managed and tracked through CANIX, a seed -to -sale program specifically
built for cannabis manufacturing operations.
2.4D Extraction Processes
Element 7 is not planning to extract cannabis oils at the facility using solvents or flammable
gases such as butane, ethanol or alcohol. Instead, we will focus on non -solvent (solventless)
Extraction products including kief, bubble hash, dry sift, and rosin. Non -solvent extraction
methods have been done for centuries, especially in areas of the world such as Pakistan,
Morocco, Egypt, and Afghanistan.
Dry sifting is another non -solvent extraction method that entails using sieves of various sizes
to sift the plant material and break the trichomes away from the plant material.
Kief is created via a non-solventless method by breaking away the white trichomes from the
plant material by grinding the marijuana plant's resin glands.
Rosin is made by applying heat to the plant material to squeeze and extract the cannabinoid-
rich oils.
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2,4E Extraction Equipment Certification
More than a dozen U.S.-based manufacturers provide the equipment Element 7 will require and
Element 7's team of industry experts will employ machinery that suits expected demand.
Element 7 may select an extraction machine from one of the following companies:
• APEKS
• Supercritical Fluid Technologies
Druk Engineering
• HighTech Extracts
NuAxon Biosciences
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All equipment will be certified under relevant manufacturing guidelines as dictated by the city,
State, and Department of Cannabis Control.
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2.4F Sanitation Procedures
Adequate and convenient hand -washing facilities will be provided that are:
• Provided with running water of suitable temperature;
• Provided with effective hand cleaning and/or sanitizing preparations and single use
paper towels or other drying devices;
• Located at points in the facility where good sanitary practices require personnel to wash
their hands;
• Prohibited from being used for activities that support production operations, such as
cleaning of production equipment or utensils.
The grounds of the Facility will be kept in a condition that protects against the contamination of
components, packaging components, in -process materials, cannabis, cannabis -derived
products, or contact surfaces. The methods for adequate ground maintenance include:
• Properly storing equipment, removing litter and waste, and cutting weeds or grass
within the immediate vicinity of the facility so that it does not attract pests, harbor pests,
or provide pests a place for breeding;
• Maintaining roads, yards, and parking lots so that they do not constitute a source of
contamination in areas where components, packaging components, in -process
materials, cannabis, cannabis -derived products, or contact surfaces are exposed;
• Adequately draining areas that may contribute to the contamination of components,
packaging components, in -process materials, cannabis or cannabis -derived products,
or contact surfaces by seepage, filth or any other extraneous materials, or by providing
a breeding place for pests;
• Adequately operating systems for waste treatment and disposal so that they do not
constitute a source of contamination in areas where components, packaging
components, in -process materials, cannabis or cannabis -derived products, or contact
surfaces are exposed; and
• If the plant grounds are bordered by grounds not under the operation's control, and if
those other grounds are not maintained in the manner described in this section, care
should be exercised in the plant by inspection, extermination, or other means to
exclude pests, dirt, and filth or any other extraneous materials that may be a source of
contamination.
• Cleaning compounds, sanitizing agents, pesticides, and other toxic materials will be
appropriately stored, handled, and controlled.
o Cleaning compounds and sanitizing agents must be free from microorganisms of
public health significance and be safe and adequate under the conditions of use.
o Toxic materials must not be used or held in the facility in which components,
packaging components, in -process materials, cannabis, cannabis -derived
products, or contact surfaces are manufactured or exposed, unless those
materials are necessary as follows:
(i) To maintain clean and sanitary conditions;
(ii) For use in laboratory testing procedures, where applicable;
(iii) For maintaining or operating the facility or equipment; or
(iv) For use in the facility's operations.
Cleaning compounds, sanitizing agents, pesticides, pesticide chemicals, and other toxic
materials must be identified, stored, and used in a manner that protects against contamination
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of components, packaging components, in -process materials, cannabis, cannabis -derived
products, or contact surfaces.
Adequate pest control will be provided.
o Animals or pests will not be allowed in any area of the facility, except that guard
or guide dogs may be allowed in some areas of the facility if the presence of the
dogs will not result in contamination of components, packaging components or
contact surfaces;
o Effective measures will be taken to exclude pests from the facility and to protect
against contamination of components and contact surfaces on the premises by
pests; and
o insecticides, fungicides, or rodenticides must not be used in or around the facility,
unless they are registered with EPA and used in accordance with the label
instructions, and effective precautions are taken to protect against the
contamination of components or contact surfaces.
• Trash will be regularly conveyed, stored, and disposed in order to:
o Minimize the development of odors;
o Minimize the potential for the trash to attract, harbor, or become a breeding place
for pests;
o Protect against contamination of components, any contact surface, water
supplies, and grounds surrounding the facility; and
o Control hazardous waste to prevent contamination of components and contact
surfaces.
• A schedule will be developed for sanitation that includes:
o Responsibility for sanitation;
o Detailed description of the cleaning schedules, methods, equipment, and
materials to be used in cleaning the grounds and buildings; and
o Records of cleaning and sanitation.
2.4G Conformance with Local and State Laws
Controlling and Tracking Component Requirements
• Element 7 manufacturing operations will have written procedures describing in sufficient
detail the receipt, identification, storage, handling, sampling, review, and approval or
rejection of components.
• Each container or grouping of containers for components will be identified with a
distinctive code (Le. lot or control number) for each lot in each shipment received, which
allows the lot to be traced backward to the supplier, the date received, and the name of
the component; and forward to the cannabis -derived product batches manufactured or
distributed using the lot.
• Specifications for each component will be established as follows, to the extent they are
necessary to ensure that manufactured batches of cannabis -derived product meet
specifications.
o An identity specification for the component must be established;
o Specifications for the strength and composition of the component must be
established as necessary to ensure the strength and composition of cannabis -
derived products manufactured with the component;
o Specifications for the purity of the component must be established as necessary
to ensure the purity of cannabis -derived products manufactured with the
component, including limits on those types of contamination that may adulterate
or may lead to adulteration of cannabis -derived products manufactured with the
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component, such as filth, insect infestation, microbiological contamination, or
other contaminants,
• Components must be received and stored pending approval as follows:
o Upon receipt and before acceptance, each container or grouping of containers
must be examined visually for appropriate labeling as to contents, container
damage or broken seals, and contamination, to determine whether the container
condition may have resulted in contamination or deterioration of the components.
o The supplier's documentation for each shipment must be examined to ensure the
components are consistent with what was ordered.
o Components must be stored under quarantine until they have been sampled,
reviewed, and approved or rejected by quality control personnel.
• Components must be approved or rejected as follows:
o Each lot of components will be withheld from use until the lot has been sampled,
reviewed, and released for use by the quality control personnel.
o Compliance of the lot with established specifications will be ensured either
through review of the supplier's certificate of analysis or other documentation, or
through appropriate tests and/or examinations. Any tests and examinations
performed will be conducted using appropriate scientifically valid methods.
a Any lot of a component that meets its specifications may be approved and
released for use for use by quality control personnel.
o Any lot of a component that does not meet its specifications must be rejected by
quality control personnel.
Batch Manufacturing Protocol
• The manufacturing operation will prepare a manufacturing batch record for each batch
of cannabis -derived product manufactured.
• The manufacturing batch record will:
o Cross-reference or reproduce the appropriate manufacturing protocol; and
o Form a complete record of the manufacturing and control of the batch.
• Each batch must be assigned a batch, lot, or control number which allows the complete
history of the production and distribution of the batch to be determined. This code must
be used in recording the disposition of each batch.
• The manufacturing batch record will include, as applicable to the process:
o Identity of the cannabis -derived product;
o The batch, lot, or control number of the cannabis -derived product;
o Batch size;
o For each component used in production of the batch:
(i) Identity of each component used in the batch;
(ii) Batch, lot, or control number for each component used;
(iii) Actual weight or measure of each batch or lot of component used in the
batch, including the unit of measure;
o Date(s) on which, and where applicable the time(s) at which, each step of the
manufacturing process was performed;
o Actual results obtained during monitoring of production process parameters;
o Identity of processing lines and major equipment used in producing the batch;
o Date and where applicable the time of the maintenance, cleaning, and/or
sanitizing of the major equipment used in producing the batch, or a cross-
reference to records, such as individual equipment logs, where this information
is recorded;
o If manufacture of the batch uses equipment or instruments requiring periodic
calibration, inspection, or verification, the date and where applicable the time of
the last calibration, inspection, or verification or the date on which such is next
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due; or a cross-reference to records, such as individual equipment logs, where
this information is recorded;
o A statement of the actual yield and a statement regarding whether the actual
yield is within the acceptable range of the theoretical yield after each significant
process step and at the end of manufacturing;
o Records of any cannabis waste generated during production of the batch;
o Records of any treatment, process adjustment, reprocessing, or other deviation
that occurred during production of the batch;
o Records of the date, time where applicable, quantity, and person responsible for
any sample removed during or after production;
o Actual results of any testing or examination of in -process material or cannabis -
derived product, or a cross-reference to such results;
o Documentation that the cannabis -derived product meets its specifications for
identity, purity, strength, and composition, in accordance with the requirements
of the manufacturing protocol; and
o Identity of each person performing each process step in production of the batch.
• All data in the manufacturing batch record will be recorded at the time at which each
action is performed.
• The completed manufacturing batch record for each batch will be reviewed and signed
by quality control personnel to determine compliance with all applicable specifications
and other requirements of the manufacturing protocol before a batch is approved.
Process Monitoring and Controls During Manufacture
• Process specifications are established for production process parameters at or during
any point, step, or stage where control is necessary to ensure the quality of the batch of
cannabis -derived product, and to detect any unanticipated occurrence that may result in
contamination, adulteration, or a failure to meet specifications.
• The process parameters to be monitored may include, but are not limited to, the
following as appropriate:
o Time
a Temperature;
o Pressure; and
o Speed.
• Production process parameters will be monitored at or during any point, step, or stage
where process specifications have been established. Any deviation from the specified
process parameters will be documented and justified, and the associated in -process
material or product must be quarantined. The deviation must be reviewed and approved
or rejected by quality control personnel. Such deviations will not be approved unless
quality control personnel determine that the resulting cannabis -derived product will meet
all specifications for identity, purity, strength, and composition and is not otherwise
contaminated or adulterated.
• If a deviation is rejected, the resulting in -process or finished cannabis -derived product
must be rejected and destroyed.
• Operations on one component, product, or batch must be physically, spatially, or
temporally separated from operations on other components, products, or batches.
• All necessary precautions must be taken during the manufacture of a cannabis -derived
product to prevent contamination of components and products.
In addition, in conformance with 9.60.310 of the National City Regulations:
No compressed gases will be stored at the site in containers that exceed the amount
which is approved by the National City fire department and authorized by the
regulatory permit.
Element 7 may use heat, screens, presses, steam distillation, ice water, ethanol and
other methods without employing solvents or gases to create keef, hashish, bubble
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hash, or infused dairy butter, or oils or fats derived from natural sources, and other
extracts.
No 'closed loop' systems will be used for extraction.
Any Equipment used, the extraction operation, and facilities must be approved for
their use by the fire department and meet any required fire, safety, and building code
requirements specified in the California Building Reference Codes.
Element 7 will develop and provide to the city a full outline of standard operating
procedures, good manufacturing practices, and a training plan prior to producing
extracts for the marketplace.
Parts per million for one gram of finished extract cannot exceed state standards for
any residual solvent or gas when quality assurance tested.
MICROBUSINESS
2.6A Retail Procedures
The required narrative is provided above in 2.1.
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2.6B Distribution Procedures
The required narrative is provided above in 2.3.
2.6C Manufacturing Procedures
The required narrative is provided above in 2.4.
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2.6D Other MicroBusiness Procedures
Element 7 has provided a narrative for its proposed Retail, Distribution and Manufacturing
operations and how these operations will meet or exceed regulations put forward by the city,
State, and Department of Cannabis Control.
In addition, in conformance with 9.60.320 of the National City Regulations:
There shall be no cultivation of any form at the Property.
No cannabis products shall be visible from any sidewalk or private road, or common
public viewing area.
No pesticides or fertilizers shall be stored at the Property.
There shall be no diversion of any cannabis or cannabis products / waste.
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Summary
Element 7 is proud of the local team of owners it has assembled and will work diligently, if
awarded a permit, to leverage the relationships, skillsets, local understanding, and
partnerships that these owners can create in National City.
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Element 7 makes a commitment to the City of National City to be an outstanding business
partner, and to do everything it can to advance the City's name and reputation, through good
governance and outstanding business principles in each and every interaction we have with
the constituents, community, and City. As demonstrated by the Letters of Support from major
business neighbors, Element 7 has the team, experience, and business model to sustainably
and securely serve the residents of National City (and beyond) with compliant and fair value
cannabis.
We are confident that we have the team and experience to create a sophisticated and
sustainable 'very local' cannabis business and footprint in National City and aim to be
the most tested, taxed, trusted, controlled, and compliant operator that the city could
find.
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Exhibit C
ELEMENT 7: SAFETY PLAN
SECTION C: SAFETY PLAN
Introduction
As the rapidly expanding cannabis industry develops, it is critical for cannabis businesses to
provide policies and procedures to ensure proper safety, training, and education for their
employees, enhance the safety for patients and customers, and eliminate potential hazards
that could affect the surrounding community at 3101 Hoover Avenue, National City. This
Safety Plan covers all possible fire, medical, health, inhalation, and hazardous situations
which we have detailed plans for each to mitigate and address.
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1. Safety Plan Preparation by Expert Consultants and Advisors
Element 7 is committed to ensuring that employees are provided the materials, manuals, and
regular staff training sessions that clearly outline safety procedures as well as potential risks
associated with cannabis products. Element 7 complies with all laws and policies set forth by
local jurisdictions and the Occupational Safety and Health Administration (OSHA),
respectively, concerning the production, sale, and distribution of our facilities' cannabis
products in the local community.
This Safety Plan has been prepared by 4 professional fire safety experts and architects
(see letters at rear of this section of the application):
Brian Uthe who is the Building Inspector at the University of Arizona, Chairman of the
Arizona Building Officials, and is a former Plans Examiner and Fire Inspector. Brian is
a California Professional Fire Prevention and Suppression Consultant.
Larry Frogoso who is a retired Battalion Chief and Division Chief of the Tracy Fire
Department in California. Larry began his fire -fighting career in 1974 and serves as an
Advisor to Element 7. Larry is a California Professional Fire Prevention and
Suppression Consultant.
- Mohsen Gouneili who is a licensed architect in the State of California with over 35
years of architectural experience across California and North America.
- Casey Snell who is a licensed architect in the State of California with over 20 years of
architectural experience across California and North America.
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In addition, Element 7 has incorporated inputs from its head of Human Resources (Ana
Guanzon), and Chief Security Officer (Corey English) in developing this plan, as both have
valuable inputs into the design of our facilities for the health, safety, and welfare of our
customers, patients, and employees.
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2. Fire Prevention, Suppression Measures, Fire Extinguishers, Evacuation Routes, and
Alarm Systems
The Facility has many safety features to protect employees, patients, customers, and the
physical building itself, including the following:
• Sprinklers and Fire Alarm System: The property will have sprinklers throughout that
are professionally installed and monitored by a licensed contractor. In addition, there
shall be a Knox Box installed at the front of the property, and an emergency light
system with pull -downs and fire alarms. All alarm systems are installed within the Data
Room at the property. Exit doors will have push -bars and illuminated Exit lights.
• Fire Extinguishers: These will be located in 5 locations within the facility as explained
further in this section of the application.
• Fire Safety Map: A Fire Safety Map will be installed on all exit routes. All exit doors
are clearly marked and installed at 52" height (ADA compliance requires the sign to be
between 48 and 60 inches in height from the ground).
• Alarm Systems and Restricted Door Entry: Element 7 will install a State -Certified
security system to manage the premises, with all doors to have biometric scanners
and swipe card access (2-factor authentication). Doors will feature deadbolt locks to
prevent forced entry, and secure, shielded padlocks will be installed on gates, garages,
sheds, exterior facility rooms, etc. Panic / duress buttons are installed in the Facility in
the event of an armed robbery or other security breach and secured secondary exit
ways designed for emergency use only will provide safe departure from the building.
All windows shall be secured against entry from the outside and will feature reinforced,
burglar -resistant, double -paned glass. Exterior doors shall be properly equipped with
panic hardware as required by all applicable state codes to prevent unauthorized entry.
• Building Standards: As Element 7 remodels and renovates the premises, a number
of fire safety and security installations are included such as installing steel sheets
between studs and drywall so that intruders are heavily restricted from movements
within the facility; smoke and gas detectors; fire safety warning and monitoring
systems, and fire -retardant building materials.
• Continuous Connection with Local Law Enforcement: Element 7 has selected a
site that is easily accessed by the Police and Fire Departments. Element 7 will
proactively engage with both departments.
• Video Surveillance: All video surveillance will provide high -quality, digital images of
any suspicious persons or activities, and be monitored by security personnel from the
Central Security Control Room. Security personnel will have direct contact lines to local
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ELEMENT 7: SAFETY PLAN
law enforcement authorities to report any suspicious activities and/or emergency
situations.
• Lighting: The front and rear of the Facility will be equipped with security lighting as
approved by the City. The entrance and rear of building lighting shall be continuously
illuminated. Each light shall provide at least 1.0 foot candle intensity (or other intensity
as directed by City Building Officials). Additionally, the minimum lighting level of one
foot-candle shall be provided at building entrances and in parking lot areas. All lighting
shall be fully shielded, downward casting and not spilling over onto structures, other
properties or the night sky. Exterior lighting on the premises shall be balanced to
complement the security/surveillance systems to ensure all areas of the premises are
visible and shall provide increased lighting at all entrances to the premises. The lighting
required shall be turned on from dusk to dawn.
• Exits and Exit Signage: The number of exits at the Facility shall be in accordance
with Table 1006.2.1 and Table 1006.3.2 (2) and Section 1017.2 of the International
Fire Code (IFC).
• Motion Detection System: In a study of convicted burglars, the University of North
Carolina at Charlotte Department of Criminal Justice & Criminology found "that 24% of
them would consider the presence of lighting" when choosing a home or business
target, adding, "Motion detectors are definitely a factor that may help prevent a
burglary." Element 7 recognizes the heightened security that motion detectors provide
and will install Motion Detection sensors on the Roof of the Building which shall activate
an Alarm if triggered. These will be appropriately installed by a State -Licensed Security
firm (Bay Alarm) and tested every 3 months.
• Security Guards: All security guards employed at Element 7 will be licensed by the
Bureau of Security and Investigative Services (BSIS) with a valid Department of
Consumer Affairs Security Guard License ('Security Guard Card') which is obtained by
completing the annual pre -licensing course. A security patrol will monitor the facility
after hours as noted in the Security Plan.
• Continuous Staff Training and Maintenance: This will be described in far greater
detail below — staff training, and continuous maintenance is the #1 prevention for fire
safety issues and Element 7 pays strict attention to both.
Safety and Security Installations at Element 7
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Other Safety Measures
• An approved Knox Box (key box) shall be provided and installed by Element 7 in a
location approved by the local Fire Department and Sheriff.
• Element 7 shall obtain all required Fire Department permits and keep them on site and
available for inspection per the California Fire Code, Section 105.
• UL listed and appropriately sized and type of fire extinguishers shall be located
throughout the facility as required by the California Fire Code and local amendments.
• Inform fire-fighters that they should wear appropriate protective equipment and self-
contained breathing apparatus (SCBA) with a full facepiece operated in positive
pressure mode.
Identification of Fire Hazards
The following is a list of potential fire hazards and their associated work areas:
Work Areas Fire Hazards
All rooms Paper, electrical
Storerooms Paper, plastic, flammable and combustible liquids
Break room Paper, plastic, electrical appliances
Retail Area Cannabis products, paper, plastic, furniture & fixtures
Housekeeping Practices
The following are the fire prevention practices associated with fire hazards identified above:
Type of Fire Hazard Fire Prevention Practices
Paper Wastepaper cans emptied daily
Plastic Waste plastic discarded daily
Electrical Quarterly inspections of outlets, multi strips, cubicles, and work
areas
Flammable liquids Store liquids in approved flammable storage cabinet
Electrical appliances Quarterly inspections of appliances; employees trained to
inspect appliances prior to use
Fire Protection Plan
Employees must be fully aware of fire risks and take steps to prevent any chance of a fire
emergency at the facility. To provide the highest level of safety against any threat of fire at the
dispensary, Element 7 will include the following in its fire protection efforts:
• Emergency Action Plan: The Emergency Action Plan will outline any and all
potential fire hazards throughout the business structure — which may include
combustible items, flammable liquids, and/or heat producing equipment— and include
necessary procedures to prevent a fire emergency. Following OSHA mandates, the
Plan will map out exit routes to take in case of emergency and provide employees
critical training on procedures such as fire drills and evacuation practices.
• Proper Good -Housekeeping Techniques: Facilities will be maintained at all times to
reduce hazards that could result in a fire emergency, including the cleanup of
flammable materials, disposal of trash in metal containers with tightly fitting lids, and
the clearance of corridors and emergency exits for any need for emergency exit.
• Provision of Fire Protection Equipment: Portable fire extinguishers, fire alarms,
carbon monoxide and smoke detectors, pull -downs, emergency alarms and lighting
will be installed to better equip employees in fire emergency/evacuation situations. The
facility will also have fire sprinklers installed.
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• Fire Protection Equipment Maintenance and Testing: Routine maintenance and
testing of all fire protection equipment by licensed and certified fire protection
personnel will be scheduled regularly in addition to any needed repairs or
replacements for existing equipment.
In accordance with the California Fire Code, a plan that covers the following will be
implemented in close consultation with the National City Fire Department:
1. The hazard of fire and explosion arising from the storage, handling or use of structures,
materials or devices (as a cannabis retailer with no manufacturing on site, we expect
this threat to be minimal).
2. Conditions hazardous to life, property or public welfare in the occupancy of structures
or premises.
3. Fire hazards in the structure or on the premises from occupancy or operation.
4. Matters related to the construction, extension, repair, alteration or removal of fire
suppression or alarm systems.
5. Conditions affecting the safety of firefighters and emergency responders during
emergency operations (a Knox Box is provided for easy access).
Inhalation Issues and Threat Management
As per OSHA mandates, Element 7 requires that operational managers maintain a listing of
all hazardous chemicals, safety data sheets associated with the handling of chemicals, correct
labeling of all chemical compounds, and employee training on handling of these types of
chemical agents. Element 7 will adhere to these EPA recommendations, and in keeping with
WPS outlines on the regulation of respirators in workplace environments containing chemical
products, Element 7 has also implemented a written Respiratory Protection Program.
Element 7 will provide on -site respirators that may be used to protect employees from inhaling
hazardous chemicals in the air in the event of any situation involving such an issue. This
program explains how respirators will be used at the facility which includes the following:
• When and how respirators will be used in routine work activities, infrequent activities,
and foreseeable emergencies such as spill response, rescue, or escape situations,
• How respirators in use are cleaned, stored, inspected, and repaired or discarded,
• How employees are trained about respiratory hazards, and
• How employees are trained on the proper use of the respirators
In order to provide proper protection, respirators must be the right type, must be worn correctly
at all times, and must be maintained properly. The General Manager is in charge of receiving
the necessary training as a respirator program administrator from the OSHA Training Institute.
The administrator will also evaluate the program regularly to make sure procedures are
followed, respirator use is monitored, and respirators continue to provide adequate protection
when job conditions change.
Safe Code of Work Practices
• Flammables, including data sheets, books, rags, clothing, flammable liquids or trash
shall not be placed or stored near heaters or their vents, any electrical appliance, or
other potential sources of ignition.
• Sources of actual or potential heat such as hot plates or electric coffee pots shall not
be placed near flammable materials. Portable space heaters and candles are
prohibited.
• Care must be taken not to block potential escape routes, particularly with flammable
materials.
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ELEMENT 7: SAFETY PLAN
• Each individual is personally responsible for assuring that extension cords and multiple
plugs are in good condition. Cords that are missing the grounding prong, are spliced
together, or that are missing their protective sheath shall not be used.
Employee Response to Fire Situations
As previously outlined, employees' response to a fire emergency is delineated in the
Emergency Action Plan. Designated and trained employees may attempt to extinguish
incipient fires with fire extinguishers after sounding the alarm to alert other employees.
Employee Safety Education
Safety policies detail procedures for ensuring the implementation of best safety practices at
all times and in accordance with Occupational Safety and Health Administration (OSHA)
guidelines throughout all facilities and operations. The OSHA safety and health framework is
meant to "provide employers, workers, and worker representatives with a sound, flexible
method for addressing safety and health issues in diverse workplaces...[and] should include
the following elements within the framework: management leadership, worker participation,
hazard identification and assessment, hazard prevention and control, education and training,
and program evaluation and improvement."
These systematic guidelines established by OSHA will be strictly enforced, as the safety of
employees and the public is the company's foremost business consideration. All employees
will comply with all applicable safety regulations as listed in the SOPs as a condition of
employment, Safety training will be provided as often as necessary and annually at a
minimum. Our goal is to keep our people and our patients are safe. Our training will help our
employees:
• Recognize safety hazards and correct them
• Avoid incidents and near -misses to prevent injuries
• Understand safety best practices and expectations
Building a Safety Culture
At Element 7, the prevention of accidents and injuries takes precedence over expedience. In
the conduct of the company's business, every attempt will be made to prevent accidents from
occurring. Element 7 requires that its employees, as a condition of employment, comply with
all applicable safety policies and procedures.
The designated Safety Coordinator (local hire to be appointed) is the primary contact for
safety -related matters. All employees will receive an orientation of the safety policy and rules
upon initial employment and are required to bring to the attention of their manager or the
Safety Coordinator any unsafe or non -compliant conditions or practices. Managers must
communicate these concerns to the Safety Coordinator, who will respond to reports within
twenty-four hours. Safety training will be provided as often as necessary and annually at a
minimum. Senior management will be actively involved with employees in establishing and
maintaining an effective safety program. The General Manager and Safety Coordinator and
other members of the management team will participate with all retailer employees in an
ongoing safety program.
The CEO in coordination with managers must:
• Provide a safe workplace.
• Facilitate monthly safety meetings.
• Provide safety and health education and training.
• Annually review and update workplace safety rules.
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ELEMENT 7: SAFETY PLAN
Fire Alarm and Monitoring System and Contacts
Element 7 will be installing a Bosch Modular Fire Panel 5000 Series into the facility. This
system offers a broad portfolio of EN and UL certified products for accurate, reliable and fast
fire detection, and notification.
Fire Safety System Used by Element 7
The system operates on peer -to -peer technology which ensures reliable functionality and
smooth administration with full remote management. The fire alarm system includes high -
quality durable panels, advanced detectors, interface modules, manual call points, sounders,
and other hardware such as strobes and video devices that detect and respond to smoke,
heat, Tight and gas. The system fully integrates with Element 7's security system and has been
successfully deployed by Element 7 at its Fort Bragg location just recently.
This system will be monitored by:
Company — Bay Alarm
Licenses — CCL 880138 ACO 28, ROC 326152 CR-67, ROC 326153 CR-16,
BAYALAC876KF
Location of All Gas Monitoring Equipment and a Detailed Diagram of the Overall
Facility's Safety Features
Our gas monitoring system will be installed throughout the premises and is capable of
detecting combustible, flammable, toxic gases, and oxygen depletion. It measures carbon
dioxide (CO2), carbon monoxide (CO), temperature, humidity, VOCs and particulates,
displaying detailed information, and is a wall mounted system that integrates with the fire and
alarm system. Further, each smoke detector, located in every room and hallway, will be
equipped with a CO2 Detector (as demonstrated on the attached Security and Safety Floor
Plan).
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ELEMENT 7: SAFETY PLAN
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Evacuation Routes
Having an evacuation route and plan in place is essential in any business —within the cannabis
industry, given the additional safety and security issues that this business poses, Element 7
implements the following procedures beyond having a planned evacuation route:
1. All staff are trained annually on evacuation routes and procedures for a multitude of
scenarios covered in this section of the application.
2. Exit route maps are clearly posted within the dispensary and facility.
3, A trained Safety Coordinator (local hire to be appointed) is the primary contact for all
safety -related matters and will be responsible with the General Manager and Shift
Managers for any evacuation procedures,
4. All customers and patients will be given clear instructions in the event of any
evacuation procedures.
The following ingress and egress routes have been developed for the Element 7 National City
facility (rear of section includes set of 11x17" plans):
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DocuSign Envelope ID: 314F4623-2749-460E-A1 DF-66191394E6CE
ELEMENT 7: SAFETY PLAN
In addition, in the event of a complete evacuation from the building, a designated zone has
been identified at front of the site for staff, customers, and patients to congregate. This area
has been identified to allow for witnesses to remain at the site, while allowing for local law
enforcement, ambulances, and fire safety officials to access the premises unobstructed. In the
event of an emergency that requires evacuation of the premises, Element 7 have designated
an evacuation point that can be reached from either the front or rear of the premises — as
shown below. This location is away from traffic and will sit behind fire -fighting `lines' if the
threat is from fire.
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Proposed Evacuation Route: Exiting the Property in an Emergency
Location of Fire Extinguishers and Other Fire Suppression Equipment
Approved portable fire extinguishers will be supplied at the Facility in multiple locations to give
employees and management the means to suppress a fire during its initial or incipient stage.
Element 7 will ensure that all portable fire extinguishers are located where they are readily
visible and accessible at all times. Locations will include:
Retail sales area x 1
- Secured storage area x 1
- Hallway near restroom x 1
- Secured Man -Trap Lobby x 1
- Distribution Facility x 2
- Manufacturing Facility x 3
Proper maintenance of the installed portable fire extinguishers is the responsibility of the
General Manager and Safety Coordinator and will be included in their monthly checklist for
the operations of the site. Fire extinguishers shall be of the proper UL Class rating and size
for the areas to be covered per OSHA guidelines. In addition, a range of other fire safety
equipment will be installed at the facility which shall include:
Fire System Control Panel that provides an audible and visual alarm when fire is
detected. This Control Panel is connected to the Automatic Fire Detection devices
installed on the ceiling of the facility.
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ELEMENT 7: SAFETY PLAN
Automatic Fire Detection Devices sense the smoke, heat, or flames from a fire and
initiate an alarm. All automatic detection equipment must be approved, installed and
maintained in accordance with 29 CFR 1910.164.
Hazard Warning and Caution Signs that are designed to warn of any risks — signage
will also direct persons to exits and fire extinguisher systems.
Knox Box so that the Fire Department can easily access the facility in the event of a
fire.
Exits and Exit Signage
The number of exits at the Facility shall be in accordance with Table 1006.2.1 and Table
1006.3.2 (2) and Section 1017.2 of the International Fire Code (IFC).
E 1
3. Accident and Incident Reporting Procedures
All accidents or near misses are to be reported to a manager or the Safety Coordinator
immediately, Falsification of company records, including employment applications, time
records or safety documentation will not be tolerated. Employees must notify a manager or
the Safety Coordinator immediately of any unsafe condition and/or practice.
Reporting Procedures
There are two types of events that fall under the definition of an incident for the
purposes of reporting guidelines. The first is an event that resulted in an injury and the
second is an incident where a 'near miss' was recorded. Minor injuries are equally as
important to report as major injuries are. Both of the following cases and many others
like them, are required to be reported.
Example 1: An employee who works at a computer station on a daily basis may suffer
from an ergonomic repetitive strain injury.
Example 2: A BudTender was opening a box with a box cutter and suffered from a
small laceration to the finger.
The second event is called a Near Miss. A near miss is an unplanned event that did not
result in injury, illness or damage, but had the potential to do so. Only a fortunate break
in the chain of events prevented an injury, damage or fatality. Incident reporting is
necessary for several reasons:
• Reporting enables the correction of the situation and helps prevent similar future
occurrences.
• If an incident results in long term leave or lost time and the employee wishes to
claim compensation from Element 7 s workers compensation provider, the
proper documentation is required in order to receive approval.
• An individual dispensary is required to notify Element 7 Head Office within 8
hours of occurrence of all fatalities, disabling, significant, and serious injuries or
illnesses to workers. Tools, equipment, materials, or other evidence that might
pertain to the cause of such accidents shall not be removed or destroyed until
authorized by the General Manager on approval from the CEO.
At Element 7, all "events" are considered "Notifiable Incidents" and they must be
reported using the "Incident Report", as shown below.
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ELEMENT 7: SAFETY PLAN
Incident Report
Document workplace Incidents end inlurieu using the front and hack of thin report.
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• The injured person or best witness must inform the area supervisor of the
incident as soon as possible.
• The injured person must complete the Incident Report as soon as possible,
within 24 hours if possible. A witness or supervisor may fill out the injury report
on behalf of the injured person, if the injured person is unable. This form will
automatically be submitted to the injured person's supervisor, the Human
Resources office, and the CEO's office.
• Initially, investigations will be completed by the injured employee's supervisor
and Element 7's HR Team (Ana Guanzon). Further investigation may be
conducted by a 3rd party HR resource with OSHA expertise.
• Ana Guanzon (HR) and Robert DiVito (CEO) will close all Incident Reports as
required with corrective action circulated to all Managers within the business. If
required, Element 7's Employee Handbook will be updated to correct any
systems, policies, or procedures.
Risk Assessments
Although Element 7 facilities are thoughtfully and deliberately designed to pose little to no risk
or threat to employees, customers and patients, a Safety Plan is designed to ensure that any
unforeseen risks are mitigated and or prevented so that employees, customers, patients and
the neighboring community remains safe.
In order to provide valuable insight to our employees, our plan includes a Risk Assessment
module that is included in the Site Safety Plan and training. Our Risk Assessment module
utilizes a matrix to calibrate identified risks that enable employees to make better informed
decisions that eliminate or reduce their exposure to the identified risk until it can be properly
addressed by a contracted professional.
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ELEMENT 7: SAFETY PLAN
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Risk
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Catastrophic
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Major
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Moderate
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Minor
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Superficial
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Very unlikely to
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Low
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High
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Very Low Very Low
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remove it completely from your workplace
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Enforcement of Policies and Procedures
Employees will be subject to disciplinary action for violations of safety rules. Managers are
responsible for the enforcement of safety rules. Employees will be afforded instructive
counselling and/or training to assure a clear understanding of the infraction and the proper
conduct under organizational guidelines. All training will be documented on a safety rule
violation notice form and placed in the employee's personnel file. Nothing in this policy or this
safety program will preclude management from terminating an employee for a safety violation.
This is not a progressive discipline system and any safety violation may lead to an employee's
termination without prior instruction or warning.
Management reserves the right to impose any of the following disciplinary actions it deems
appropriate:
• Verbal warning with documentation in personnel file.
• Written warning outlining nature of offense and necessary corrective action with
documentation in personnel file.
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ELEMENT 7: SAFETY PLAN
• Termination.
Management will be subject to the above disciplinary action for the following reasons:
• Repeated safety rule violations by employees under their supervision.
• Failure to provide adequate training prior to job assignment.
• Failure to report accidents and provide medical attention to employees injured at work.
• Failure to control unsafe conditions or work practices.
• Failure to maintain good housekeeping standards and cleanliness in their
departments.
Procedures and Training for Fire and Medical Emergencies
We have established the following policies on training all workers with respect to workplace
security. All workers, including managers and supervisors, shall have training and instruction
on general and job -specific workplace security practices. Training and instruction shall be
provided when the IIP Program (Injury and Illness Prevention) for Workplace Security is first
established and periodically thereafter. Training shall also be provided to all new workers and
to other workers for whom training has not previously been provided and to all workers,
supervisors and managers given new job assignments for which specific workplace security
training for that job assignment has not previously been provided. Additional training and
instruction will be provided to all personnel whenever the employer is made aware of new or
previously unrecognized security hazards.
General workplace security training and instruction includes, but is not limited to, the following:
1. Explanation of the IIP Program for Workplace Security including measures for
reporting any violent acts or threats of violence.
2. Recognition of workplace security hazards including the risk factors associated with
the three types of workplace violence.
3. Measures to prevent workplace violence, including procedures for reporting workplace
security hazards or threats to managers and supervisors.
4. Ways to defuse hostile or threatening situations.
5. Measures to summon others for assistance.
6. Worker routes of escape.
7. Notification of law enforcement authorities when a criminal act may have occurred.
8. Emergency medical care provided in the event of any violent act upon a worker; and
9. Post -event trauma counseling for those workers desiring such assistance.
In addition, we provide specific instructions to all workers regarding workplace security
hazards unique to their job assignment, to the extent that such information was not already
covered in other training.
Security and Emergency Preparedness Training
Supervisors, managers, and employees will also be required to complete Security and
Emergency Preparedness training based on Federal Emergency Management Agency
guidelines and courses. This includes:
• Natural hazards: floods, hurricanes, tornadoes, and earthquakes
• Health hazards
• Cybersecurity, power outages and equipment failure
• Emergency alerts and the Integrated Public Alert and Warning Systems
• Active Shooter, robbery, burglary, transportation incidents and workplace violence
• Attacks in Public Places
• Terrorism, bomb threats and suspicious packages
• Ensuring Building Security: evacuation, sheltering and lockdown
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ELEMENT 7: SAFETY PLAN
• Severe Weather
• Recovering from Disaster
• Loss Prevention
• First Aid and CPR
Employee Safety and Security Training and Resources
Our supervisors, managers and employees will be required to complete safety training that
covers OSHA requirements, Sexual Harassment and Workplace Violence, Emergency
Preparedness and Safety and Security Policies and Procedures.
In order for our Company to maintain the safety and security of our employees, we will perform
security and risk assessments at various stages of build -out and implementation, and on -going
assessments while in operation, to identify workplace security issues. The fact that the
cannabis industry is unable to access traditional banking services, high amounts of cash on -
site and highly valuable items, such as cannabis products, may increase the risk of violence
related to diversion, theft and other related criminal activity. Although our security plan
includes state -of -the art security systems, devices and professional, contracted security
officers, we will have all facility supervisors and employees complete Worker Safety and
Health training modeled after CaI/OSHA's Cannabis industry Health and Safety Program.
Training will cover:
• Electrical hazards
• Hazard communication
• Injury and illness prevention
• Personal protective equipment
• Point of operation hazards
• Repetitive motion injuries
• Slips, trips, falls and use of ladders
• Sanitation and pest control
• Workplace violence
• Sexual harassment
• Discrimination
• Worker's Rights
• Employer's Rights
• Reporting and Resources
Cannabis Specific, to -Depth Security Training
We will contract a security professional to provide security and emergency preparedness
training based on FEMA Emergency Management Agency guidelines that includes active
shooter, emergency preparedness, burglary and robbery, bomb threats, cybersecurity threats
and other potential security and safety threats that employees may encounter while on the
job. Our contracted security professional will also train employees on ways to identify potential
risks to workplace security, describe measures for improving workplace security and how to
determine actions to take in response to a safety or security situation (e.g., burglary, armed
hold-up, stroke and heart attack, loss of power). We also require, and provide, training
refresher courses which will occur on an annual, ongoing basis for all employees. Refresher
training courses will consist of a minimum of 32 (paid) hours annually, for security and safety
training.
Our Chief of Security will also be providing, and managing, training on internal safety and
security policies and procedures that have been developed with our Chief of Compliance.
Facilities may have unique safety and security issues and our Chiefs of Security and
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ELEMENT 7: SAFETY PLAN
Compliance will work on developing policies and procedures that address these unique
issues. Internal Security and Safety policies and procedures include:
• Security Surveillance Systems
• Alarm Systems: inspections, maintenance, monitoring, reporting
• Lighting: inspections, maintenance, monitoring, reporting
• Cybersecurity
• Product and Currency Handling and Storage
• Shipments and Deliveries within an enclosed space
• Logs, Data Management and Reporting
• Financial Plan and cash handling
• Limited and Restricted Access Areas and Permissions
• Keys, Electronic Access Cards and Company Issued IDs
• Contracted Licensed Security Officers
• Bag Checks
• Clocking -In and Clocking -Out
• Roving Inspections
• Safety and Security Training Requirements
Situational Training
Staff are trained to deal with, and manage, a range of workplace scenarios — having staff
adequately trained allows for rapid response, resolution, and risk minimization.
Emergencies
The Company has outlined steps that supervisors, managers, and employees should take in
the event of certain emergency situations.
Fire
• Call 911 immediately if fire is uncontrollable.
• Use fire extinguisher to put out smaller fires.
• Evacuate the building immediately and allow the fire department full access to the
facility.
• Have staff and witnesses fill out incident reports.
• Assist in clean up after fire has been extinguished properly. Management is to secure
product in the safe if available.
Earthquake
• All employees find a safe spot during the event and exit store in calm fashion if
possible.
• Manager on duty is to lock up doors and shut off gas line to business if accessible.
• Manager is to account for all employees and vendors after the event is over and
facilitate cleaning up the business if needed. No employee is to leave without
contacting the manager first and receiving authorization to do so.
• Manager is to call the owner and inform him of any damage. Owner is to call Insurance
company in the event of damage and facilitate the repairs.
Medical
Any type of serious life -threatening medical emergency, such as seizures, asthma attacks,
epilepsy, diabetic episodes, etc. will be handled by medical professionals and emergency
responders will be called immediately via 9-1-1. Any type of accident wherein bodily fluids is
present, only management is to deal with such fluids using proper cleaning supplies and
gloves. If in abundance, use of professional cleaning service may be deemed
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ELEMENT 7: SAFETY PLAN
necessary. Business will have a stocked first -aid kit in case of minor injuries at work.
Employees will always have access to this kit.
Active Shooter
Employees will receive Active Shooter training from our contracted Security Professional.
Injury or Accident
Employees will be instructed to remain calm and assess the emergency situation. They will
be trained to assess whether the injured individual requires need medical attention. Injured
individuals who refuse medical attention will be asked to complete and sign an incident report
and refusal to receive medical attention waiver. Basic first -aid procedures can be used on
employees in the event of a minor injury.
Hazardous Materials
Hazardous materials (hazmat) are substances or materials that the U.S. Department of
Transportation (DOT) has determined are capable of posing an unreasonable risk to health,
safety and property when transported in commerce. The Hazardous Materials Regulations
(HMR) are a set of rules established by The Pipeline and Hazardous Materials Safety
Administration (PHMSA) to ensure hazmat is packaged and handled safely during transport,
storage, and handling. Hazardous Material Security training is designed to introduce hazmat
employees to security risks associated with the hazmat transportation process and ways to
enhance security, as well as how to spot a possible security threat and respond appropriately.
Training will help employees meet the security awareness training requirement (49 CFR
172.704(a)(4)). Training will enable employees to determine if a material is hazardous,
recognize the hazard classes and divisions used to identify hazardous materials, recall what
makes a material hazardous substance, waste, marine pollutant, or elevated temperature
material.
Security and Burglary 1 Robbery Protocols
The overriding consideration in dealing with a robbery is to reduce the possibility of any injury
by ensuring staff are trained and prepared on how to deal with such occurrence.
• Use of CODE A practices — that can be used as a prompt to staff as to how to handle a
robbery. CODE A is an acronym and can be easily memorized:
o Stay Calm — Remain calm and in control at all times.
a Obey — Do not resist the robber. Don't be a hero. Do not take action that would
jeopardize the safety of personnel or customers. In most situations' robbers
don't harm people that are cooperating and calm. Try to inform the robbers of
any surprises and inform the robber if you need to reach for anything such as
a key. Follow the robber's commands but do not volunteer assistance or
information.
o Describe the Situation — Train staff to be observant and plan to be a good
witness. Count the number of robbers, note their physical characteristics and
distinguishing features, behavior, speech patterns, nicknames used, and other
relevant details. Ensure that witnesses do not discuss or collaborate details
until law enforcement arrives and takes witness statements. Have staff record
their own version of events as soon as possible in writing after an incident.
o Maintain Evidence — Train staff to maintain and safeguard evidence. Do not
let anyone touch counters, door handles, or any other surface before law
enforcement arrives.
o Alarm — Activate the panic / duress buttons as quickly, safely, and discreetly
as possible. Calf 911. All actions must only be done when it is safe to do so.
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ELEMENT 7: SAFETY PLAN
4. Waste Management Locations and Procedures
As a commercial cannabis retail operator, we do not envision having any significant 'sensitive
cannabis waste products' to dispose of. In the event that products were required to be
destroyed, our preferred partner is GAIACA, a specialist cannabis waste company that has
over 20-years of industry experience. GAIACA have a full cannabis waste disposal service that
leverages the same practices and principles of medical waste.
--Amenaireggieri
CA1Ac
WASTE REvITALIZATI,314
GAIACA Cannabis Waste Company
GAIACA has the following permits in place to handle such waste:
DTSC Haz Permit #6300
Motor Carrier Permit #CA 0446205
CHP Hazardous Materials Transport License #228307
RCRA ID # CAR000265140
Weigh Masters License #014137
Products would be placed into a Secured Waste Receptacle provided by GAIACA held within
the secured storage rooms (these are access controlled rooms) within the facility which is a
secured zone and only accessible by the General Manager, Inventory Manager and inventory
department team members, with all destroyed products tracked into our inventory
management system. This secure room will be under 24-hour surveillance and the GAIACA
Secured Waste Receptacles have a lock system at the top of the waste bin so that products
can only be disposed of, with no retrieval possible. Any `disposal' would require two staff to be
present — one responsible for the disposal and one to responsible for documenting the disposal
into the inventory management system.
GAIACA staff would visit the site as required and remove the Secured Waste Receptacle into
their vehicle for full and complete compliant destruction at their facilities. Secured Waste
Receptacles are able to be wheeled out of our secured facility to the GAIACA vehicle under
supervision of a security guard and an inventory department staff member. All cannabis waste
generated at the facility will be rendered useless and unrecognizable within the secure
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ELEMENT 7: SAFETY PLAN
cannabis waste storage area prior to its disposal in the GAIACA Bins. All rendering and
disposal will be done within the unobstructed view of the security camera in the secure storage
room.
We will render all cannabis waste unusable and unrecognizable prior to disposal, this includes,
at a minimum, removing or separating the cannabis goods from any packaging or container.
Cannabis waste will be rendered unusable and unrecognizable by grinding and incorporating
it with other ground, "non -consumable," "non -hazardous" materials (soil, plastic pots, netting,
spoiled food waste, cardboard, etc.) The resulting mixture must be at least 51 % non -marijuana
waste by volume. The rendering and disposal will be recorded in the track and trace system
the following additional information:
• Name and type of the cannabis goods.
• Unique identifier of the cannabis goods.
• Amount of the cannabis goods, by weight or count, and total wholesale cost.
• Date and time.
• The name of the employees) performing and present at the destruction or disposal.
• The reason for destruction and disposal.
• The entity disposing of the cannabis waste.
Once the cannabis waste is rendered unusable and unrecognizable, the cannabis waste will
be placed into the locked GAIACA Bins which will remain storage in the secure area until
GAIACA is contacted to haul the waste to their facility.
E
Summary
Safety and security are two of the most important factors in the management and operations
of Element 7. The policies, procedures, and systems that we have created are in place to drive
staff and customer safety. In addition, these policies demonstrate to employees that safety
performance and business performance are compatible; clearly state the company's safety
beliefs, principles, objectives, strategies and processes to build buy -in through all levels of the
company; outline employer and employee accountability and responsibility for workplace
health and safety; and are designed to comply with the Occupational Health and Safety Act.
Element 7 promotes the wellness and welfare of the company's workforce and, as workplace
safety is paramount, we believe that with the proper education and training of management
and staff on safety procedures as outlined within the OSHA framework, we provide the highest
standard of safety for our cannabis facilities and operations, and the communities they serve.