>> good afternoon, everyone. this meet willing come to order. welcome to the october 24, 2018 meeting of the rules committee. my name is supervisor safai. i'm the chair of the committee. to my right is vice chair, supervisor norman yee. supervisor catherine stefani will not attend today's meeting and we will be joined later by supervisor rafael mandelman in her place.

supervisor yee, can entertain a motion to excuse supervisor stefani? >> i'll think about it. [laughter] no, i'll move it. >> so move. without objection. today our clerk is victor young and i'd like to thank michael and samuel from sfgov tv for staffing this meeting. mr. clerk, do you have any announcements before we begin? >> yes. please silence all cell phones and electronic devices. completed speaker cards and copies of any documents to be included as part of the files should be submitted to the clerk. items acted upon today will appear on the october 30 board of supervisors agenda unless otherwise stated. >> great. mr. clerk, please call item number one, unless there are any initial comments. >> item number one is motion approving and rejecting the president of the board of supervisors mali cohen's nomination of rachael tanner for appointment to the board of appeals for a term ending july 1, 2022. >> great. did you want to make some opening remarks? ok.

you can keep that two minutes or less, that would be great. >> great. good afternoon, chair safai and supervisor yee. i'm here on behalf of president cohen to support the nomination of rachael tanner to seat two on the board of appeals. we interviewed other candidates and ms. tanner really stood out. in the level of expertise that she will bring to the board of appeals. she is quurmently the board of appeals om has one other woman serving there and if nominated she would be the second woman to serve. she is a woman of color and she will bring a very important perspective and voice to that body. that body requires a fine balance of following the letter of the law and taking into account the individual struggles that individuals bring before that body. i humbly request that you support ms. tanner to this seat. >> thank you. ok. ms.en thater, please come

forward. you can make some remarks to the committee, three minutes or less, that would be great. >> wonderful. thank you, chair safai, supervisor yee. it is great to be here and thank you to president cohen and her staff for nominating me and malia for those wonderful remarks. thank you. it would be my pleasure and my honor to serve on the board of appeals. i really value and believe in public service and have dedicated my life and my career to public service. after finishing undergrad, i worked as a community organizer in my hometown in michigan. went off to grad school and then served at the city of long beach in the city manager's office there and then moved here to san francisco and served for two-years in our planning department as senior planner and now i'm currently serving as the assistant to the city manager in the city of palo alto. so public service is really what i believe in and something i really value. and now as somebody who is not working in the city of san francisco, i have an opportunity to serve my community in a different way by serving on the board of appeals.

i believe that my experience and my training as a planner, my education as a planner trained at m.i.t. and my ability to use and exercise judgment on important matters before the board of appeals makes me qualified for this position. i can bring my skills, my expertise and also my passion and my energy to this work and would be very honored to be accepted to this position. thank you. >> great. any questions for -- supervisor yee? >> good afternoon. >> hi. >> so, when you were working as planner, did you have to go to any of these board of appeals meetings? >> as a planner, i did not have to go. scott chantas, the d.a., he is always at the board of appeals and often will do a lot of work speaking on behalf of the planning department. i did goat attend one of the board of apeels meetings in consideration for this role and also watched several of the meetings on video.

>> what do you think are some of the toughest issues that the board of appeals has to consider. >> i think -- i mean, overall most of the issues that they consider are land use matters. i think 76% this last year were land use matters dealing with planning or zoning or administrator issues and so i think the toughest issues are those where the code is either conflicting so we might have different parts of our city codes that conflict with each other and trying to determine what's the right way and also the extenuating circumstances that might be facing an appellant and that the code did not consider and doesn't make room for. so, how do we consider and make a just decision in light of what might be a code that's unclear. i think there is a lot of important matters that come before the board of appeals and require a lot of consideration and thought. >> so in following some of the issues, what do you think are

maybe one or two most important things that a board of apeels actually addressed since you've been paying attention. >> yeah. well, i think that -- i'll sfaoek this most recently in my mind, the meeting i attended a few weeks ago. you know, there was an example of a case that had been going on for several -- quite a long time. of a person who had some properties they had purchased as part of redevelopment and had created some homes for seniors and then had done some unpermitted work. and so really was part of a long -- long series of things that had happened to try to get that person to come into compliance and providing homes for seniors that they had said that they would provide. and so i think that matter was conclude at least at the board of appeals. i imagine there may be some further work at the court on that. so i think that is an example of the kind of important matters we're deciding on, which is housing, which is critical in the city of san francisco and how do we go

about ensuring housing is provided, especially for folks who are most vulnerable like seniors. there is a lot of cases like the that deal with housing that come before the board. >> so, i'm glad you're implying. but in your resumé, you mentioned that one of the things that you do bring in is not only a view of a woman, but also from the african american community. so, what is that that you're bringing in from the african american community that is going to benefit the board of appeals? >> well, i think it is important for our local government to be representative of our community and when people look at decision-making bodies, whether it's board of appeals, board of supervisors, different commissions that we have created in our community, that they see themselves reflected in those boards and feel like that there is an opportunity , whether they wanted to participate, that they'll gate fair hearing, and that people will be able to understand where they're coming from perhaps or have some sense of perspective of what their life is like. so i think i do bring that, not

just because i'm a black woman, but i think that it allows me to have certain perspectives, such as understanding black culture and understanding some elements and things that are important to our community that may be different in other community and i think that having myself there just allows people to see themselves in the board, see themselves in public service and to hopefully consider becoming public servants themselves. >> great. so, i have had the pleasure of having ms. tanner work for me in my office. when we had some staff shortages. and she filled in. i think your expertise in planning is going to be very helpful on the board of appeals. can you tell us why you want to be on the board of appeals? >> sure. as i said, i really think that the board of appeals a place where i can bring my passion for public service and serving the city of san francisco with my knowledge and expertise.

it's a very important body that hears a lot of matters, maybe many of the public may not know about it unless they,themselves, are appealing something or had something appealed there. but for those who come to the board, it is a very big deal. something very important. something that they have put a lot of time and money into. it could be their business and their livelihood could be on the line. it has a really important role to play in ensuring that justice is provided for those folks in an impartial way. so i'm bringing knowledge and expertise and also a sense of impartialty in wanting to hear out the merits of each case that would be before us. >> so, you've obviously seen the board of appeals. know what the majority of the hearings are about. so would you say that -- can you talk about that a little bit? a lot of it is people fighting over rear yard exexthe, a deck, a set of stairs.

just talk about that. >> there are a lot of mares that come that might be considered small in terms of the scale, right? it's one house perhaps or as you said a deck on a house. stairs on a house. not always as maybe dramatic as the case that i referenced earlier. we're dealing with senior housing that really has a broader impact on our community. i think it is important that we have the board of appeals as a right for citizens to appeal when something is happening on a house next theirs or in their neighborhood that they feel might negatively impact their property values. that said, i think it is important for the board to consider what are the codes that we have laid out for folks to apply to their building projects. did the city staff follow those processes and procedures properly and properly administer the code so we want to make sure that we're being fair and judy, in evaluating that. at the same time, i think it is important not to usurp the role of the board of supervisors or the planning commission in creating policy that would be

used by the planners, planning staff t building staff to make a determination if a project is compliant or not. so, it's a fine balance to strike with keeping in mind that even a small project can be very big to the folks who are involved in the matter. >> so, this is a certain significant time commitment. are you able to jugle that with your duties? day job? >> i am. yes. yes. i have spoken with my supervisors. they are fully aware that i'm here today and able to flex my schedule on wednesdays so that i will be able to be here for the hearings. >> great. ok. i think you are going to be a fine addition to the board of appeals. i think it's -- i don't know how many times they've had someone with a planning degree and planning background work for the planning department in the county and city of san francisco. >> i'm not sure. >> so that will be a nice fresh perspective. i don't have any additional comments or questions. thank you.

and thank you for choosing to serve. >> thank you very much. >> we'll open it up to public comment. please come forward. seeing none -- oh, just kidding. come on, ace. i'm just messing with you. trying to make you walk faster. >> i definitely support -- >> two minutes. >> i definitely support what you're doing there. but as a caveat to that, once you achieve that, you'll probably be seeing ace on the case coming before the appeals board. breaking news! news breaking. ace on the case. you'll be receiving a letter from the department of real estate, which is turned preview of the c.a.o.'s office, which is really under the mayor's office announcing -- and i have it -- as soon as i get it, i'll let everybody in the world know by the city by the bay -- listen. >> i'm just saying stay focused. >> i'm trying to get there. i gave my support. much more.

you got bills to pay, you got the seal of approval a. you can do that. but when i come there with appeal, news breaking because i was -- please don't stop me. news breaking -- ace on the case! will be receiving a letter from the department of real estate. by brother man who used to be a redevelopment agent but he is taking the other place here. that i have been banned from the media room. i haven't even had my ribbon cutting opening. i've been coming back after 10 years. i'm back by black demand, not popular demand. let me go on and say i think we'll receive a letter from the departments of real estate and he happens to be a black man. the c.a.o. happens to be a blackment two. the mayor of our city happens to be a black woman. and as you see on your tv, i'm a black man. but i will be receiving a letter from the city and county by the bay! that i have been banned from

the press room for life! for life! my naifm is ace, i'm on that case. i got 10 seconds left. this is a warning to the mayor's office. the c.a.o.'s office. when i get that letter, i'm going straight to the f.b.i. trust me. >> any other members of the public wish to comment on this application? seeing none -- public comment's closed. supervisor yee? >> on the one hand, i've seen ms. tanner walking around the halls when she was working but i don't know much about her. and i'm a little disappointed, unless she did -- i have no knowledge of her reaching out to my office. and that is a little disappointing, especially because you worked at city hall and you understand the process. so i don't get that part. whether or not you reached out the my office.

>> i did reach out to your office and they notified me that you didn't have any further questions and that you didn't need to meet with me? i don't know if that was a miscommunication, but that's the message i received. >> probably was. as you know, in our offices, things fly by -- >> yeah. absolutely. >> in that case, then i'll go ahead and make a motion to approve? and i guess delete rejecting. the president's board of supervisors malia cohen's nomination. >> right. send wit a positive recommendation. i think we can do that without objection. congratulations, ms. tanner. >> thank you very much. >> we'll see you at the board. [applause] go from there. [laughter] just want to remind everyone if you want to show support, please do this. no clapping in the chamber. thank you. please call the next item. >> next on the agenda is item

number two, a ordinance submitting the governmental conduct code to update the conflict of interest code, form 700 filing requirements for the city and county of san francisco unified school district by adding deleting and changing titles of designated officials and employees to reflect organizational and staffing changes. >> unless there is any initial comments from supervisor yee, i'd like the invite our deputy city attorney to talk about this item. >> thank you. under state law, every city official and city employee who's involved in making decisions that could impact companies, businesses, property, sources of income, must file an annual statement disclosing their economic interests and must file a statement of form 700 when they assume office and leave office. under state law, every two

years, the board of supervisors has to review the list of all the form 700 filings, positions in the city and updated as appropriate. over the past several months, my office and the clerk's office have been coordinating with all city departments to determine which positions need to be deleted or changed and this ordinance before you is essentially a long list of form 700 filers with the tweaks that we've worked out with different departments. one note is thats the after introduction we realized that there were some changes that we needed to make to the mayor's office section of this ordinance just as some -- basically errors in the ordinance, not actually -- not actually making any substantive changes and i've circulated to you an amendment just

reflecting those changes in the mayor's office section. so, i'd ask that after -- >> what paint is that on? >> -- what page is that on? >> 34. section 3.1-3. >> it is on pages 35 -- sorry, 34, 35 and 36. >> are all the people that have the lines struck through there no longer required to file? what does that mean? >> those positions used to be called out individually as now being required to file and now it says all staff in those divisions. so, it was just a -- >> oh, got it. >> those lines are all duplicative, which is why we're striking them now. >> interesting. >> so following public comment, i just ask that you adopt this amendment and then forward it on to the full board. the goal here every two years

is to have it passed by the end of november so that the ordinance goes into effect by january 1 as state law requires. >> so, just a question here. oops. >> that's water. go for it. >> do you need to clean that up? >> yeah. >> ok. uh-oh. maybe i'll ask my question after -- are you ok? >> yeah, yeah, i'm ok. >> so, under -- i see under the policy division, you struck everything there on page 36 as all staff and then turned office of strategic partnerships, it's all struck. are they also -- are they a piece of the policy division? is that why it doesn't say all staff there? that's on page 36. >> i cannot recall, supervisor. i will -- i can check and give you an answer before the end of this meeting, though. >> ok. >> but the intent of the -- of

the strike -- >> i'm assuming the office of extra edge tooic partnerships in the mayor's office. maybe it's because -- you've struck everywhere under the -- it just says communications all staff and then you list out some in some areas but pretty much everywhere it says all staff and then that one area is just struck completely and it doesn't say all staff. i wonder if that was a typing drafting error. >> yeah. there are often in these ordinances just some straggler positions that either no longer exist or have been moved or renamed, moved with different divisions. >> maybe we can find out -- >> sure. >> ok. i don't know if we veal time to find out actually. but that is ok. we can find out later. that's fine. i mean, is there -- well that's what he needs to find out. we need to find out if that office still exists or maybe it is under the policy division completely. that's fine. ok. we'll open it up for public comment. any members of the public wish to comment on this item, please

come forward? >> real upset. >> oh. did you want to say something? ok. i'm sorry. go ahead. >> start my time over? >> yes. >> i'm real upset. this form 700 is supposed to be used by people that sit in supervisor and management position and an executive director's position. for example, robert garcia, executive director for the department of public health. for seven years straight, failed to report income of $100,000 a year! and she did it for seven years straight and by the same response got a total of not reporting $700,000 on this form that's called number 700. year after year after year after year after year for seven years straight. and then when she gets caught

and not reporting $100,000 that her wife makes who's a vice president of a college in the mission district, she deliberately failed to report that information and she got caught and you let her retire with benefits when she is supposed to get prosecuted for tax evasion, money laundering and bank fraud. and as far as business administration laws concerned, she's in violation of the charter pertaining to misappropriations of funds. and this is another example how the closer your skin color is to white, the more god damn preferential treatment you're going to get. black people not going to get kind of preferential treatment because our skin color is further away from white as a color can get. and this is proof of it! she supposed to be in jail right now. how come the city attorney gascone is not prosecuting her for money laundering, tax evasion and bank fraud? and misappropriation of funds? and how come the city attorney

is not suing her to get that money back and put it back into the city's account? why is that? we had a hearing about how black people in her department is being discriminated and hundreds of black people testified how they been discriminated in every department in the city. >> thank you, sir. any other members of the public wish to comment on this item, please come forward? seeing none, public comment is closed. ok. any additional comments or questions from the committee? we've been joined by supervisor mandelman today filling in for supervisor katherine stefani. thank you for being here, supervisor. ok. >> so, let me just suggest that we -- what do you call it? move to the next item and then come back -- >> oh, come back to it. i think actually -- >> i do have an answer. the mayor's office has provided an answer, which is that that

office no longer exists. which is why we're strike it entirely. >> oh. ok. great. i guess if it comes back we'll have to amend it again in the future. right? i mean so what happens when they -- how often is this updated, every two-years? >> yeah. but every time there is a new department or office or even a new position created, we will create the department of homelessness in the support of housing. >> and you come with -- >> we modify this code to list those employees as form 700 hours. >> interest. ok. great. anything else? and a motion? >> recommend to full recommendation to the board. >> and prior -- >> excuse me?

>> to adopt the amendments? >> i guess we have to. [laughter] just kidding. >> we'll make a motion to adopt the amendments first. can we do that without objection? great. now we'll make a motion -- now we'll entertain supervisor yee's motion to stoenld the full board as amended with positive recommendation. we can do that without objection. great. please call the next item. >> next item number three is ordinance amending the administrative dozed revise the reporting duties of the re-entry council and extend the sunset date of the council by five years to june 1, 2024. >> i'd like to invite you to present on behalf of the sponsor.

>> good afternoon, supervisors. supervisor fewer introduced this ordinance to extend the re-entry date to the sunset date of the council because this is a board she sits on herself. the purpose of the re-entry council is to coordinate local efforts to support adults who are exiting san francisco county jail, the san francisco juvenile justice out of home placements, california department of corrections and rehabilitation facilities and the u.s. federal bureau prison facilities. so, the council coordinates information sharing, planning and engagement among all interested, private and public stakeholders and the really great thing about the re-entry council is it brings together a wide array of perspectives on criminal justice ranging from various law enforcement agencies and city departments

to community advocates and formerly incarcerated adults. in fact, i think this committee recently got to hear from some of those incredible individuals who serve on this re-entry council recently and reappointed some of those. they wish to extend the sunset date as i mentioned to june 1, 2024 and require biannual reports by the re-entry council. so, without further ado, i hope that we can count on your support. thank you so much. >> great. any questions initially from the committee? seeing none, ok, great. i think we're ok. we're going to open it up to public comment. any members of the public wish to comment on this item, please come forward? >> is i support and agree with

this proposal because inmates need all the help they can get. i just got through speaking at another hearing pertaining to $2 million grant that was provided for 850 bines street and demonstrates how we're in the case law matter of people versus feretta. the supreme court ruled that people who work in the criminal justice system run their jails as an organized enterprise in order to keep people in jail so they can maintain their jobs. s.f. viewer, please. mr. district attorney, it's not working. sf viewer, pause my time please while you separationen this out.

ok. district attorney gascon's testimony in the newspaper further demonstrate that fact. he states it very clearly. the funds will be used to hire behavior health clinics to determine whether an inmate is eligible for mental health services. and by the same response, the plan calls for additional city interference and increase the number of mental health leads and services for inmates. when the truth of the matter is you putting inmates at risk. that building is not earthquake-proof and you're putting staff at risk of that

building collapsing. moreover, the people need to have this proposal by fewer put into effect so they won't return back to jail and be used to make money off their incarceration. moreover, you're putting yourself at risk because in santa clara county, they were just sued for approximately $1.6 million and additional $200,000 for violating the rates of inmates pertaining to disabilities and confinement. >> [inaudible]. >> good afternoon, supervisors. calvin quick from the youth commission and on behalf of the youth commission. on october 15, the youth commission voted unanimously to support this ordinance. we believe that the re-entry council has provided important insight into the services needed for formerly incarcerated individuals to successfullies reintegrate into society.

we especially applaud the continued inclusion of a [inaudible] trap sisteringal age youth seat on the re-entry council given the overrepresentation of tay youth in san francisco's adult jail population. we want to thank supervisor fewer for carrying this ordinance and the department of youth [inaudible] for her presentation to youth commission and we urge you to pass this ordinance to the board with positive recommendation. thank you. >> hi, i'm jafria morris. i'm the re-entry planner and i facilitate the re-entry council. i want to let you all know that we're on our 10-year marker and this is our second time asking for an extension. the youth commission did allow us to come and speak about that. and we've had a lot of

interesting things come out of the re-entry council as well as our burns ratio disparities report. we have been the leaders of working to gang injunction in san francisco. we have seven formerly incarcerated seats, five are presently filled with diement naic people ranging from federal, probation, experienced that really have subject matter experts who have to make people -- to help the re-entry community. so i do hope that you all extend this ordinance because it's so important and it is definitely, i would say, my ground zero for the re-entry community to come and kind of tell what's going on. we have two subcommittees, direct services and policy committee that actually works with people in re-entry and tells us the problems and we work it up through the council and the council having a

sitting supervisor is able to bring it to the board. it's very unique and i appreciate your support. thank you. >> any other members of the public wish to comment on this item, please come forward. seeing none, public comment is closed. any additional questions or comments? from committee members? ok. seeing none, can we entertain a motion? >> sure. i'm more than happy to support a positive recommendation for this extending the sun setting of the re-entry and council and send on to committee to the full board. >> right. and just for clarity, we're extending the sunset data, the council by five years to june 1, 2024. can we do that without objection? great. thank you. thank you to those who came out to speak on this. ok.

please call the next item. >> item number four is the ordinance amending the police code by making a number of changes in the regulation of commercial cannabis activity. >> great. we are joined today by director elliott. i want to say a few remarks before we do that. we spent, this body, this board, current board other than i think two members, right? spent significant time trying to work through a myriad of issues and the majority of which were to clarify how we can begin to stabilize our home-grown industry. many of these businesses had been, no pun intended, cull vaited over a long period of time and were san franciscans who invested their hard time, energy and money into building a business in the face of extreme opposition and extreme laws. as more knowledge and information is gone out, i

think more people are understanding what this industry means to san francisco. we've created an office of cannabis. i know director elliott is the first director of that office. we now have gone from an advisory committee to -- excuse me -- a task force an advisory committee. we just passed that ordinance. and in the process of that, we tried to be very thoughtful about how we were going to allow for there to be a social equity component of this -- of these laws, allowing for those that had been the victims of or the recipients of the war on drugs and allowing them to partake and be a part of this growing industry. i'm currently working on some legislation that will bring back to the board that will allow for apprenticeship train and opportunities for people to

-- as more apprenticeship opportunities open up in different phases of this industry, we're going to be expanding those opportunities to work locally with our city build. we had that at the small business commission. we call that city grow. that is working its way through the process. but that will allow for folks that are san franciscans and others to participate in that industry. but the reason we're here today is because we still have a temporary adult use permit that we're operating under. i think that we're going to be extending that today, looking for that opportunity far lot of those businesses. but at the same time, we want to clarify the social equity component of this and how small businesses that want to partake in the equity side of this, how are we doing that? are we doing it fairly? are we thinking about the implications? so there is going to be a number of amendments that are talked about. i think there is a number of members of the board that have thought about that. and so some of that will go today. i think the intent today is we

have some timelines on adult use that are going to expire. i think supervisor mandelman has some things that he would like to say. i'm going to hand it over to him in a moment. i know he's worked on some of these. but essentially the idea isn't just so everyone's clear, we're going to be splitting the file to allow for the timeline issues to be dealt with. and we have a whole host of amendments. we'll continue the remaining file so we can have a more robust conversation about amendments that will be made. there were some drafting errors. there were people in the pipeline that had been caught up in those drafting errors from my interpretation and since i was one of the people that helped to draft that and work on that with a number of other members of the board so we want to clarify that and there are other areas of the administrative code that we'd like to work on. this was a joint effort between both the land use committee as

well as the rules committee. and i'm wondering if -- are we ok in terms of members of the board, any conflicts -- ok. i just wanted to make sure we don't have any -- we have five members. ok. so, that would be what i would have to say initially and i'm going to hand it over to supervisor mandelman. i know he has a significant number of things that he would like the introduce. thank you. >> thank you, chair safai. i yes, i have a significant number of things to say. >> ok. >> this item is one that i'm co-sponsoring along with president cohen and mayor fwlaoeds will amends the police and health codes by making a number of changes to the way the city regulates retail cannabis. following the painstaking process that the board underwent last year to create a framework for the brand-new industry. there was wide acknowledgement that this industry would be constantly changing. through that process, the city made a commitment to regularly update our cannabis policies

moving forward. this ordinance is a manifestation of that commitment. among other things, the ordinance will enable medical cannabis operators waiting for their retail permits to continue to operate on temporary adult use sales authorization through the end of next year while the office of cannabis continues to process the hundreds of applications they've already received. lit strengthen equity ownership in the way that honors the intents of the program to help those impacted by the war on drugs. owned and operate successful businesses. operators are prides out of their leases or dealing with predatory landlords. in the month since we introduce this legislation, my office and the office of cannabis have heard from dozens of existing operators and equity applicants and colleagues on the board who have provided invaluable feedback about the issues that this legislation could solve for. i will be introducing a series of amendments based on this feedback and i know there are other amendments to offer as

well. but first wanted to invite nicole elliott the director of the office of cannabis to provide additional information about the ordinance as drafted. i want to take this opportunity first to thank nicole and her staff at the office of cannabis for the incredible job they've done in outreaching the stakeholders groups and soliciting and processing feedback and running what has been a complicate and intensive process of drafting the legislation. i also want to thank my legislative aid. i'm not sure we knew how big of a bite since we decided to adopt this. >> president cohen was on the speaking order. >> thank you. thank you, mr. chair. thank you very much.

>> good afternoon, ladies and gentlemen. thank you for joining the rules committee. i'm here to offer my support on this update and amendment suggested by my co-sponsor, supervisor mandelman and the office of cannabis. it also helps to crack down on noncompliant operators which is a constant thing that we hear when we hear feedback from operators is noncompliant, people that are operating and selling without a permit. these are quite documented challenges that we're collectively working through. these amendments add transparency to the business ownership structure as well as help identify bad actors or those that are operating again.

those that are operating without a permit or a license. it also creates some flexibility to allow businesses to take on a new investment and creates flexibility to allow businesses to shift their ownership structure a bit as owners and investors continue to navigate this new and very dynamic business landscape. so, mr. chair, those are my opening remarks and i'll come back with more. i'll save the rest for later. thank you. >> thank you for having me here today. thank you for hearing this item. and engaging on these important issues to provide you with some context. it has been less than one year since this article and this ordinance creating this article

was before this committee that was in november of last year. since then, we have it rated these policies at least five times. and we have followed through on that commitment to continuously it rate. the changes seek to revise areas of the cannabis regulatory structure based on the city's experience of implementing the structure to date. specifically it contains amendments that refine administrative requirements, strengthening the equity program, restructure some permit criteria and prioritizization processes and extend certain timeframes on to that last point, i really want to impress upon you that those timeframes are important to move swiftly through this board so that they may be in place by the end of this year so that the industry does not experience any disruption and we can administer our processes

continuously. lastly, to supervisor manldsleman's point, this is an incredibly complex issue. thank you for taking up this item. >> thank you. i do have a series of amendments to this ordinance that i have provided to chair safai and other members of this committee and should be available for the public as well. as i said, these amendments are based on the significant amount of feedback that has come from stakeholders and colleagues during the past month. it's a pretty long list so i hope folks will bear with me as i work my way through it. before i go into these amendments, i do want to echo

ms. elliott, there are some sections of this ordinance that are time sensitive and it is critical that they move forward out of committee to the full board today. so i'm going to be dwhag we duply indicate the file and move to send these out of public xhefnlt i understand that many of the amendments and these are details that will generate further discussion and will also be moving with these amendments along with much of the ordinance be continued until a future committee meeting. ok. so you have them before you. but i'm going to take a walk through the amendments. section 1602 is the definitions section and here we are proposing to strike the definition of ownership interest and amend into the equity program a more robust definition of ownership interest. in section 1604, the equity program, section b3-e here we are amending in a definition of ownership interest that defines

the proportionate right to interest, proceeds of sale and participation in fundamental business decisions. section c4, the amendments clarify that it is an incubator's responsibility to provide an equity operator with the resources necessary to comply with community outreach requirements, security services and the good neighbor policy requirement and this applies to both types of incubation off site or on site as well as technical assistance. section c5a requires an annual report detailing technical assistance to be provided to the office of cannabis. c5b clarifies that the equity incubator must provide the greater of 800 feet of space or 10% of the equity incubator's premises. this clarifis that they must provide 800 square feet of space or 10%. we're partially addressing comments we heard on these issues and i will offer

additional amendments at a future meeting to ensure that this requirement is prospective. section 1606, applications for cannabis business permits, section d are stating that all owners are subject to the same obligations as the individual applicants. section 1608, transfer -- >> hold on a second. >> we're trying to flip through. if you have it by paint or number, that might be helpful.

we'll be increasing the ability of investments to scale with investment and clarify the process by which that may occur. >> you can go through all of your amendments and come back to that. i'd like to come back to that one slightly to have a conversation. >> c1. clarifies that changes affecting ownership interest of less than 20% need to be promptly disclosed to the office of cannabis. >> ms. elliott, did you want to say something? maybe you did? >> no, i just couldn't hear you very well. >> ok. c2, make sure that -- let's see where we are. page 11, i believe. c2 makes sure that any change of ownership of greater than 20% has to be done via a permit amendment. c3 requires a permanent amendment if there are changes in direction control or management of a cannabis business. c4 clarifis that a filing fee is applied for permit amendments. c5 clarifis that in the

ownership change of 50% or more. so, a change in control is a permit transfer and we will require a new permit subject to all the requirements of article 16. c6 allows that a change in the type of business entity will not be considered a change of ownership in certain circumstances. c7 clarifies that if there is an entity owner that every individual who exercises discretion control or management of that entity should be treated as an owner for purposes of conviction review. and other requirements. c8 allows for individuals to transfer their ownership to entities entirely owned by that individual. >> ok. let's stop for a second. because that's one of the ones that i had drafted in these last -- one of the ones that i had worked on and i just want to get a little clarity for the record. especially because while president cohen, i don't know -- are you about to leave? >> i was just -- no, i'm staying because i wanted to listen to supervisor kim's amendments specifically.

>> ok. >> thank you. >> ok. i'm just going to jump in on this one for a second. so, the reason we had originally put in a threshold or at least barrier for a change of ownership or outside investors was to protect some of these small businesss from -- and might sound patronizing but from the perspective of some of the information and research that we had done there was a significant number of businesss that were being enticed by outside venture capital, outside investors from other countries, outside from the bay area. so we put in there a barrier that wouldn't allow to sell more than 20% ownership of their business. that was hard. at least the way it was drafted it looked like they could sell it in 20% increments. the intents was to stop that at 20%. i'm actually open for the

ownership interest to change. but no more than -- i think the conversation should be around 49 to 40%. that would allow for a business to raise a significant amount of capital. yet at the same time, retain ownership over their business to kiept really a small, home grown protected business. it could have multiple investorsstomy the way restaurants are. a group of people that are owning whatever the section of the industry is. but i think it is important that we decide collectively so it looks like you're proposing no more than 49%. i'm happy and i wanted to get folk's thoughts on and maybe some input on what -- if 40% was not enough, what folks thought was the right number. i probably would feel better with 40%. but it is not necessarily a hard line for me. originally it was a hard line at 20%. i certainly don't want anymore than 49% to be sold and there

to be -- that would definitely constitute a change of ownership and would be a complete structure and i think that that in my interpretation, i would not want that and i would think that they would have to forfeit their permit and start all over again at that point. supervisor mandelman. >> yeah. i think the thought here is that the local operators are -- >> back a little more. >> i think the thought is that the local operators, in order to be competitive with the folks coming in are going to have to go out and get significant investment in their businesses and so i saw it as a sort of, you know, allowing them additional investment up to the point when control of the entity changes, which would be 50 -- >> 51. >> whenever you goat 50, you're there. so that is the way we drafted it. >> it's interesting.

i know that if somebody has a 20%, 25% ownership in a business -- and that is why we set it at 20% because of the amount of capital they're bringing in and amount of ownership they might have individually or as a group, they can have disproprofessioner -- disproportionate, although they're a 20% stakeholder, that happens in other industries. but ultimately supervisor cohen, did you want to weigh in on that? >> i would -- yes. i would just say that i'm more leaning towards and supporting supervisor manldsleman as it is written. i think that it is a safe change. ok. supervisor yee? >> so changing from 20 to -- >> essentially the -- >> mm-hmm. -- at the 28% level, they're

not finding enough investors s. that what it is? that we're trying to solve? >> i think that the need to be competitive against what is going to quickly back very competitive industry and folks who have started local operations are going to have to attract significant capital and that in my view we should be ok with that up to the point where they're giving away control of the business when they go over 49%. >> i have a question for director elliott. thank you. do you have another question, supervisor yee? ok. director, i think maybe one of the -- a different way to think about it is i understand if someone is in the research and development. if someone is in the phase of creating products, right, for this particular market that would be outside of san francisco, i understand the need to raise capital and to be able to scale and be competitive if you're -- whatever it may be, whatever product you have. but if you're a store front,

there really isn't an argument, you're a neighborhood storefront business that is dealing with walk-in clientele and maybe delivery clientele if you have that ability so i'm having a harder time -- that is the lens that i was looking at and that's versus if you are in the research and development and product development and cultivation. that i can understand why you would want to have a greater ability to sell a larger interest of your business. is there a way that we could differentiate, you could only sell up to a certain amount of your business if you're a storefront retail versus the remaining parts of the supply chain or however you want to classify it. >> as we see it tran storm systeming a state level, the levels of compliance, the

resources required for that come minutes are significant regardless of what activity you are participating. and you do it by permit type. >> ok. if the will of the body is to allow -- i would say if maybe question for the deputy city attorney then. is this written in such a way in terms of the way it's drafted that it's a hard line. you cannot sell more than 49% of the business because i see 20%, there's disclosure

requirements. 20%. is there a way we could say it even firmer? like you can't -- 49% is a hard line. >> in this draft, in the amendments that supervisor mandelman has circulated, 50% is the hard line. anything over 49.9999 is hard line. >> ok. i'm good with that if the rest of the body is. then i'm fine with that. >> and if things come up in the next week or week -- >> i'm sorry. supervisor kim, i apologize. >> actually i was going to agree with you. that i prefer the 40%. i have to say i do think that there is a distinction between storefront and research and development of products and i don't understand the rationale for allowing such a great percentage, change of ownership for store front so when you're doing research and development, you need to fund raise a lot of capital and so i understand the difficulty for those businesses. i guess i'm just understanding

what challenge or obstacle we're solving for retail. why is it that they need to find investors at such a great extent. i understand the distinction between 50 and 49 as my -- and i want to be deferential to the author of the ordinance. it just want to say that i share the concerns that supervisor safai brought up. >> any other points? >> that was it. >> i guess i would have a follow-up. one of things that i've heard in terms of feedback from some of the smaller home-grown retailers is that now that is push for and that will be another item that we're going to get to in terms of equity applicants and investors and so on. that you have these larger, you know, corporations now that are looking to invest in and i guess even in the retail side if they have the ability to buy larger scale, they can offer their products at a lower price and then that makes it harder -- i guess i'm arguing against

my own argument. [laughter] but that is essentially what you have heard? in terms of why a storefront retail would need to go and raise money to be competitive? in terms of being able to sell products and source products at competitive price. >> as well as meet the physical space requirements now required under state law. just like many other operators and other activities. things that are, you know, really robust, video surveillance systems, alarm systems, so on and so forth. >> ok. supervisor kim, were you done? ok. supervisor -- ok. supervisor mandelman? >> yeah. did you have a follow ?*up >> just to say that at the end of this long list of things, i'm going to be proposing that we duplicate the file and even if we move forward with this idea of allowing to go up to 49% if folks over the next week or weeks want to make additional change or think more

about whether this should be applied differently to different types of businesses. >> i get it. i just wanted to jump in because that was one of the items that i had drafted specifically so i wanted to -- while i have both president cohen and supervisor kim here, i wanted to jump in on that. please proceed. >> thank you. so i think now we get to 1609, permit applications. that is on page 13. my first change is at b-23. a minor change removing references to signature, correcting for nature of the digital application process. and then this change is repeated several times throughout the section. >> that is the good neighbor policy. >> what?