REPORT TO THE CITY COUNCIL FROM: GEORGEANNE A. WHITE, City Manager Office of Mayor & City Manager BY: JENNIFER RUIZ, Project Manager Office of Mayor & City Manager SUBJECT ..Title Actions pertaining to Commercial Cannabis Activity: 1. Approve the Loan Agreement for Adolfo E. Castillo (the Owner) of Roeding Leaf Inc dba Banyan Tree, a cannabis social equity business, in the amount of $75,000 to assist with the start-up, regulatory costs, and operating costs of opening a retail commercial cannabis business in the City of Fresno. ..Body RECOMMENDATION Staff recommends that the City Council approve the loan agreement between Adolfo E. Castillo (the Owner) of Roeding Leaf Inc dba Banyan Tree and the City of Fresno, a municipal corporation (the City). EXECUTIVE SUMMARY The Fresno Municipal Code requires that the City Manager develop a program, as funding is available, to issue business loans and grants to qualified equity applicants. The City of Fresno executed a grant agreement with the State of California to accept the Cannabis Equity Act Grant. Through this grant, the City is able to offer a $75,000 loan to each cannabis social equity business, once it has preliminary CCB permit approval, funded by the State of California Cannabis Equity Act Grant. On April 20, 2022, Adolfo Castillo submitted an application for the cannabis social equity loan program on behalf of Roeding Leaf Inc dba Banyan Tree Dispensary. Banyan Tree Dispensary is a retail cannabis social equity business, located at 207 E Sierra Avenue, Unit B, in Fresno, with preliminary approval for a commercial cannabis business permit. BACKGROUND Fresno Municipal Code (FMC) section 9-3316(b)(6)(vii) requires that an Equity Assistance Program be established by the City Manager and, once funding becomes available, shall provide the following assistance to qualified social equity applications (as defined by FMC 9-3316(b)(6)): * Assistance in paying state regulatory and licensing fees; * Assistance securing business locations prior to or during the application process; * Assistance securing capital investments (excluding loans and grants from the city); * Assistance in recruiting, training, and retention of qualified/diverse workforce; and * Business loans and/or grants to equity applicants. On October 15, 2020, the City Council approved the Cannabis Social Equity Assistance Program Services. On April 8, 2021, the City Council approved resolution 2021-080 authorizing the State of California Cannabis Equity Act Grant Funding. Through this grant, the City was awarded $1,204,934.25. The grant agreement, number CEG-21-121, was executed by the City Manager on April 1, 2021. The grant term is from April 15, 2021 to October 31, 2022. The Cannabis Equity Grant provides a total of $330,000 for grants, to assist with local and state licensing and regulatory fees (budgeted at $33,000 per qualified social equity applicant), and $754,934.25 for no-interest business loans (budgeted as up to $75,000 per qualified social equity applicant). On April 20, 2022, Adolfo Castillo submitted an application for the cannabis social equity loan program on behalf of Roeding Leaf Inc dba Banyan Tree Dispensary for an amount of $75,000. Banyan Tree Dispensary is a retail cannabis social equity business, located at 207 E Sierra Avenue, Unit B, in the City of Fresno, with preliminary approval for a commercial cannabis business permit. Banyan Tree Dispensary has submitted a conditional use permit application and the application has been accepted and is under review by the City of Fresno Planning and Development Department. On April 18, 2022, Adolfo Castillo (the Owner) of Roeding Leaf Inc dba Banyan Tree Dispensary, signed the loan agreement document agreeing to the terms of the loan, including the term of repayment described in section 2 of the loan agreement. ENVIRONMENTAL FINDINGS Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378, this item is not a project for the purposes of CEQA. LOCAL PREFERENCE Local preference was not considered because this is an amendment to an existing agreement. FISCAL IMPACT N/A Attachments: 1. Loan Agreement 2. Proof of Signature Authority