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HomeMy WebLinkAboutC-20-64 1261 OPCP LLC RedactedApplicant (Entity) Information Application Type Proposed Location Commercial Cannabis Business Permit Application C-20-64 Submitted On: Dec 04, 2020 Applicant Marcus Vik marcus@cookiesre.com Applicant (Entity) Name: 1261 Wishon OPCO, LLC DBA: -- Physical Address: 1264 North Wishon Blvd City: Fresno State: California Zip Code: 93728 Primary Contact Same as Above? No Primary Contact Name: Marcus Vik Primary Contact Title: Head of Licensing Primary Contact Address: 4675 MacArthur Court Primary Contact City: Newport Beach Primary Contact State: California Primary Contact Zip Code: 92660 Primary Contact Phone: Primary Contact Email: marcus@cookiesre.com HAS ANY INDIVIDUAL IN THIS APPLICATION APPLIED FOR ANY OTHER CANNABIS PERMIT IN THE CITY OF FRESNO?: Yes Select one or more of the following categories. For each category, indicate whether you are applying for Adult-Use (“A”) or/and Medicinal (“M”) or both Both Please make one selection for permit type. If making multiple applications, please submit a new application for each permit type and proposed location. Permit Type Retail (Storefront) Business Formation Documentation: Limited Liability Company Property Owner Name: Brian Richburg Proposed Location Address: 1264 North Wishon Boulevard City: Fresno State: California Zip Code:Property Owner Phone: Supporting Information Application Certification 93728 Property Owner Email:Assessor's Parcel Number (APN): 451-264-13 Proposed Location Square Footage: 7000 List all fictitious business names the applicant is operating under including the address where each business is located: N/A Has the Applicant or any of its owners been the subject of any administrative action, including but not limited to suspension, denial, or revocation of a cannabis business license at any time during the past three (3) years? No Is the Applicant or any of its owners currently involved in an application process in any other jurisdiction? Yes If so, please list and explain: Applicant and/or its owners are currently involved in application processes in Illinois, Missouri, Antioch CA, Coalinga CA, El Cerrito CA, Stanton CA, San Diego CA, San Francisco CA, Santa Rosa CA, Santa Barbara CA, Napa CA, Union City CA, Puerto Rico, Portland OR, Corvallis OR. I hereby certify, under penalty of perjury, on behalf of myself and all owners, managers and supervisors identified in this application that the statements and information furnished in this application and the attached exhibits present the data and information required for this initial evaluation to the best of my ability, and that the facts, statements, and information presented are true and correct to the best of my knowledge and belief. I understand that a misrepresentation of fact is cause for rejection of this application, denial of the permit, or revocation of a permit issued. In addition, I understand that the filing of this application grants the City of Fresno permission to reproduce submitted materials for distribution to staff, Commission, Board and City Council Members, and other Agencies to process the application. Nothing in this consent, however, shall entitle any person to make use of the intellectual property in plans, exhibits, and photographs for any purpose unrelated to the City's consideration of this application. Furthermore, by submitting this application, I understand and agree that any business resulting from an approval shall be maintained and operated in accordance with requirements of the City of Fresno Municipal Code and State law. Under penalty of perjury, I hereby declare that the information contained in within and submitted with the application is true, complete, and accurate. Iunderstand that a misrepresentation of the facts is cause for rejection of this application, denial of a permit or revocation of an issued permit. A denial or revocation on these grounds shall not be appealable (FMC 9-3319(d)). Name and Digital Signature true Title CEO Please note: the issuance of a permit will be determined based on the application you submit and any major changes to your business or proposal (i.e. ownership, location, etc.) after your application is submitted may result in a denial. All applications submitted are considered public documents for Public Records Act request purposes. For details about the information required as part of the application process, see the Application Procedures & Guidelines, City of Fresno Municipal Code Article 33 and any additional requirements to complete the application process. All documents can be found online via this link. For questions please contact the City Manager’s Office at 559.621.5555. EXECUTION COPY OPERATING AGREEMENT among 1261 WISHON OPCO, LLC and THE MEMBERS NAMED HEREIN December, 1, 2020 THE UNITS REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES ACTS OR LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS UNDER THOSE ACTS AND LAWS. THE SALE OR OTHER DISPOSITION OF SUCH UNITS IS RESTRICTED AS STATED IN THIS AGREEMENT, AND IN ANY EVENT IS PROHIBITED UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT AND ITS COUNSEL THAT SUCH SALE OR OTHER DISPOSITION CAN BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES ACTS AND LAWS. BY ACQUIRING UNITS REPRESENTED BY THIS AGREEMENT, EACH MEMBER REPRESENTS THAT IT WILL NOT SELL OR OTHERWISE DISPOSE OF ITS UNITS WITHOUT COMPLIANCE WITH THE PROVISIONS OF THIS AGREEMENT AND REGISTRATION OR OTHER COMPLIANCE WITH THE AFORESAID ACTS AND LAWS AND THE RULES AND REGULATIONS ISSUED THEREUNDER. EXECUTION COPY Table of Contents ARTICLE I ORGANIZATION ...................................................................................................... 1 Section 1.01 Formation. ...................................................................................................... 1 Section 1.02 Name .............................................................................................................. 1 Section 1.03 Principal Place of Business ............................................................................ 2 Section 1.04 Registered Office; Registered Agent. ............................................................ 2 Section 1.05 Purpose; Powers. ............................................................................................ 2 Section 1.06 Term. .............................................................................................................. 2 Section 1.07 No State-Law Partnership. ............................................................................. 2 Section 1.08 Regulatory Licenses ....................................................................................... 3 Section 1.09 Cannabis Activities. ....................................................................................... 3 ARTICLE II UNITS ....................................................................................................................... 4 Section 2.01 Units Generally .............................................................................................. 4 Section 2.02 Authorization and Issuance of Common Units .............................................. 4 Section 2.03 Other Issuances .............................................................................................. 4 Section 2.04 Regulatory Compliance. ................................................................................ 4 ARTICLE III MEMBERS .............................................................................................................. 5 Section 3.01 Admission of New Members. ........................................................................ 5 Section 3.02 Representations and Warranties of Members ................................................ 5 Section 3.03 No Personal Liability ..................................................................................... 7 Section 3.04 No Withdrawal ............................................................................................... 8 Section 3.05 Death .............................................................................................................. 8 Section 3.06 Voting ............................................................................................................ 8 Section 3.07 No Interest in Company Property. ................................................................. 8 ARTICLE IV CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS ...................................... 8 Section 4.01 Initial Capital Contributions. ......................................................................... 8 Section 4.02 Additional Capital Contributions. .................................................................. 8 Section 4.03 Maintenance of Capital Accounts .................................................................. 9 Section 4.04 Succession Upon Transfer ........................................................................... 10 Section 4.05 Negative Capital Accounts .......................................................................... 10 Section 4.06 No Withdrawal. ............................................................................................ 10 Section 4.07 Treatment of Loans from Members ............................................................. 10 Section 4.08 Intent and Modifications .............................................................................. 10 ARTICLE V ALLOCATIONS ..................................................................................................... 10 Section 5.01 Allocation of Net Income and Net Loss ...................................................... 10 Section 5.02 Regulatory and Special Allocations ............................................................. 11 Section 5.03 Tax Allocations. ........................................................................................... 12 Section 5.04 Allocations in Respect of Transferred Units ................................................ 13 Section 5.05 Curative Allocations .................................................................................... 13 4840-1943-8017, v. 1 ARTICLE VI DISTRIBUTIONS ................................................................................................. 13 Section 6.01 General. ........................................................................................................ 13 Section 6.02 Priority of Distributions ............................................................................... 14 Section 6.03 Tax Distributions. ........................................................................................ 14 Section 6.04 Tax Withholding; Withholding Advances. .................................................. 15 Section 6.05 Distributions in Kind.................................................................................... 16 Section 6.06 Distribution Upon Deemed Liquidation Event ............................................ 17 Section 6.07 Limitations on Distributions to Units Treated as Profits Interests. .............. 17 ARTICLE VII MANAGEMENT ................................................................................................. 17 Section 7.01 Establishment of the Board .......................................................................... 17 Section 7.02 Board Composition; Vacancies.................................................................... 17 Section 7.03 Meetings of the Board; Quorum; Manner of Acting. .................................. 19 Section 7.04 Actions Requiring Approval of Members.................................................... 19 Section 7.05 Meetings of the Members. ........................................................................... 20 Section 7.06 Compensation; No Employment. ................................................................. 22 Section 7.07 No Personal Liability. .................................................................................. 22 Section 7.08 No Exclusive Duty ....................................................................................... 22 Section 7.09 Officers. ....................................................................................................... 22 ARTICLE VIII TRANSFER ........................................................................................................ 24 Section 8.01 General Restrictions on Transfer. ................................................................ 24 Section 8.02 Permitted Transfers ...................................................................................... 25 Section 8.03 Drag-Along Rights. ...................................................................................... 26 Section 8.04 Tag-Along Rights......................................................................................... 28 Section 8.05 Right of First Refusal. .................................................................................. 29 Section 8.06 Regulatory Redemption. .............................................................................. 30 ARTICLE IX COVENANTS ....................................................................................................... 32 Section 9.01 Confidentiality. ............................................................................................ 32 Section 9.02 Regulatory Covenants of the Members........................................................ 35 ARTICLE X TAX MATTERS ..................................................................................................... 36 Section 10.01 Income Tax Audits. ...................................................................................... 36 Section 10.02 Tax Returns; Tax Elections. ......................................................................... 38 Section 10.03 Company Funds ........................................................................................... 38 ARTICLE XI DISSOLUTION AND LIQUIDATION ................................................................ 39 Section 11.01 Events of Dissolution ................................................................................... 39 Section 11.02 Effectiveness of Dissolution. ....................................................................... 39 Section 11.03 Liquidation ................................................................................................... 39 Section 11.04 Cancellation of Articles ............................................................................... 40 Section 11.05 Survival of Rights, Duties and Obligations ................................................. 40 Section 11.06 Resource for Claims. .................................................................................... 41 ARTICLE XII EXCULPATION AND INDEMNIFICATION ................................................... 41 Section 12.01 Exculpation of Covered Persons. ................................................................. 41 4840-1943-8017, v. 1 Section 12.02 Liabilities and Duties of Covered Persons. .................................................. 41 Section 12.03 Indemnification. ........................................................................................... 42 ARTICLE XIII MISCELLANEOUS ........................................................................................... 44 Section 13.01 Expenses ...................................................................................................... 44 Section 13.02 Further Assurances....................................................................................... 44 Section 13.03 Notices ......................................................................................................... 44 Section 13.04 Interpretation; Headings............................................................................... 45 Section 13.05 Severability. ................................................................................................. 45 Section 13.06 Entire Agreement ......................................................................................... 45 Section 13.07 Successors and Assigns................................................................................ 46 Section 13.08 No Third-party Beneficiaries ....................................................................... 46 Section 13.09 Amendment. ................................................................................................. 46 Section 13.10 Waiver. ......................................................................................................... 46 Section 13.11 Governing Law. ........................................................................................... 46 Section 13.12 Dispute Resolution. ...................................................................................... 46 Section 13.13 Binding Arbitration ...................................................................................... 47 Section 13.14 Equitable Remedies. .................................................................................... 47 Section 13.15 Attorneys’ Fees ............................................................................................ 47 Section 13.16 Remedies Cumulative .................................................................................. 48 Section 13.17 Federal Cannabis Laws ................................................................................ 48 Section 13.18 Counterparts ................................................................................................. 48 EXECUTION COPY LIMITED LIABILITY COMPANY OPERATING AGREEMENT THIS OPERATING AGREEMENT (this “Agreement”) of 1261 Wishon OPCO, LLC, a California limited liability company (the “Company”), is effective as of the 1st day of December, 2020, by and among the Company and each person and entity who from time-to-time is admitted as a member of the Company in accordance with the terms of this Agreement (each individually a “Member,” and collectively, along with the Local Preference Owner, the “Members”) and is listed as a member on Schedule A attached hereto (the “Members Schedule”) and Kacey Auston (the “Local Preference Owner”). Capitalized terms used herein shall have the meanings set forth in Annex 1 attached hereto. RECITALS WHEREAS, the Company was formed as a limited liability company under the California Revised Uniform Limited Liability Company Act, Title 2.6, §§ 17701, et seq. (as amended from time to time, the “LLC Act”) by the filing of the Company’s Articles of Organization (the “Articles of Organization”) with the Secretary of the State of California on June, 18, 2020; WHEREAS, the Local Preference Owner qualifies as such pursuant to the City of Fresno’s Commercial Cannabis Business Permit Application Evaluation Criteria 2.5; WHEREAS, the Members intend for the Local Preference Owner to maintain unconditional ownership of its equity share; and WHEREAS, the parties agree that the membership in and management of the Company shall be governed by the terms set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I ORGANIZATION Section 1.01 Formation. (a) The Company was formed on June, 18, 2020 upon the filing of the Articles of Organization with the Secretary of the State of California. (b) This Agreement shall constitute the “operating agreement” (as that term is used in the LLC Act) of the Company. The rights, powers, duties, obligations, and liabilities of the Members shall be determined pursuant to this Agreement and the LLC Act. To the extent such rights, powers, duties, obligations and liabilities are different by reason of any provision of this Agreement than they would be under the LLC Act, in the absence of such provision, this Agreement shall, to the extent permitted by the LLC Act, control. Section 1.02 Name. The name of the Company is “1261 Wishon OPCO, LLC” or such other name or names as the Board may from time-to-time designate in accordance with the LLC Act; provided, however, that the name shall always contain the words “Limited Liability PAGE 2 OF 48 4840-1943-8017, v. 1 Company” or other abbreviation “L.L.C.” or the designation “LLC”. The Board shall give prompt notice to each of the Members of any change to the name of the Company. Section 1.03 Principal Place of Business. The principal place of business of the Company will be at such place as may from time to time be determined by the Board. The Board shall give prompt notice of any such change to each of the Members. Section 1.04 Registered Office; Registered Agent. (a) The street and mailing address of the registered office of the Company shall be the office of the initial registered agent named in the Articles of Organization or such other office (which need not be a place of business of the Company) as the Board may designate from time to time in the manner provided by Applicable Law. (b) The registered agent of the Company for service of process in the State of California shall be as set forth in the Articles of Organization or any subsequent filing with the Secretary of the State of California. (c) In the event of a change in the registered office or agent of the Company by the Board, the Company shall promptly file a statement of change with the Secretary of State of California in the manner provided by the LLC Act. Section 1.05 Purpose; Powers. (a) The purpose of the Company is to engage in any activity within the purposes for which a limited liability company may be formed under the LLC Act and to engage in any and all activities necessary or incidental thereto. (b) The Company shall have all the powers necessary or convenient to carry out the purposes for which it is formed, including the powers granted by the LLC Act. Section 1.06 Term. The term of the Company commenced on the date the Articles of Organization were filed with the Secretary of State of California and shall continue in existence perpetually until the Company is dissolved in accordance with the provisions of this Agreement or the LLC Act. Section 1.07 No State-Law Partnership. The Members intend that the Company shall be treated as a partnership for federal and, if applicable, state and local income tax purposes, and, to the extent permissible, the Company shall elect to be treated as a partnership for such purposes. The Company and each Member shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment and no Member shall take any action inconsistent with such treatment. The Members intend that the Company shall not be a state law partnership (including, without limitation, a limited partnership) or joint venturer, and that no Member, Manager or Officer of the Company shall be a partner or joint venture of any other Member, Manager or Officer of the Company, for any purpose other than as set forth in the first sentence of this Section 1.07. PAGE 3 OF 48 4840-1943-8017, v. 1 Section 1.08 Regulatory Licenses. The Members intend that the Company or Company Subsidiaries shall hold Regulatory Licenses pursuant to applicable Regulatory Laws. The Company’s management shall, at all times, comply with the requirements of all Regulatory Laws, including all rules, ordinances and guidelines put forth by the City of Fresno (the “City”). The Company shall not engage in any Regulated Activity without the applicable Regulatory Licenses. In connection with the foregoing, the Board and each Member shall take all actions reasonably necessary in connection with any application for such Regulatory Licenses and shall not otherwise take or fail to take any action that would reasonably be expected to have a material adverse effect on such applications. Without limiting the foregoing, the Members and the Board acknowledge and agree that this Agreement and the management of the Company must comply with Regulatory Laws and may be subject to review or approval by Regulatory Authorities. In the event that a Regulatory Authority determines, or the Board or Members otherwise reasonably determine, that this Agreement or the management of the Company does not comply with Regulatory Laws (including pursuant to a change in Regulatory Laws or direction by Regulatory Authorities) or otherwise would reasonably be likely to preclude or materially delay, jeopardize, impede or impair, or impose materially burdensome terms and conditions on, the ability of the Company or any of its subsidiaries to conduct any Regulated Activities or to obtain, retain, renew or reinstate any Regulatory License, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. Section 1.09 Cannabis Activities. (a) ACQUISITION OF THE UNITS OR SERVICES TO THE COMPANY INVOLVES DIRECT AND/OR INDIRECT INTERESTS IN CANNABIS. THE CULTIVATION, HARVESTING, MANUFACTURING, PRODUCTION, MARKETING, COMMERCIALIZATION, DISTRIBUTION, TRANSFER, SALE AND/OR POSSESSION OF CANNABIS IS ILLEGAL UNDER U.S. FEDERAL LAW. NO PARTY HERETO, NOR ANY ATTORNEYS FOR SUCH PARTY, HAVE MADE ANY REPRESENTATION TO THE CONTRARY. EACH MEMBER, MANAGER AND OFFICER ASSUMES ALL RISKS ASSOCIATED WITH ACQUISITION OF THE UNITS OR SERVICES TO THE COMPANY, INCLUDING THE RISK OF CRIMINAL PROSECUTION, AND HEREBY REPRESENTS AND WARRANTS THAT IT ACKNOWLEDGES AND UNDERSTANDS SUCH RISKS AND THAT ITS ACQUISITION OF THE UNITS OR SERVICES TO THE COMPANY DOES NOT VIOLATE THE LAWS OF THE JURISDICTIONS UNDER WHICH IT RESIDES OR IS DOMICILED AND, AS APPLICABLE, IS FORMED OR ORGANIZED (OTHER THAN THE FEDERAL CANNABIS LAWS). (b) Each Member acknowledges and is aware that the Company is a commercial cannabis business and/or shall enter into contractual arrangements with commercial cannabis businesses. Each Member further acknowledges that as a result of the Company or subsidiary engaging in commercial cannabis business or business with commercial cannabis businesses, such Member (and/or its respective owners, directors, PAGE 4 OF 48 4840-1943-8017, v. 1 officers and managers (collectively, the “Member Parties”)) may be required to be listed as owners, financial interest holders or in another capacity of the Company or other commercial cannabis businesses under the Regulatory Laws. The Company and each Member shall promptly and without delay work in good faith to include the Member Parties as a financial interest holder or owner, as applicable (as may be required by the Regulatory Laws as determined in good faith by the Company) on the Company’s licenses and, if applicable as determined in good faith by the Company, on any other licenses of any entity with which the Company or any subsidiary has contracted. Each Member agrees to provide the Company with all information regarding the Member Parties as may be required by the Regulatory Laws. The Members and the Company further agree and acknowledge that any required disclosure of the Member Parties for purposes of the Regulatory Laws shall not alter the respective liabilities and indemnifications of the Members as set forth in this Agreement. ARTICLE II UNITS Section 2.01 Units Generally. The Membership Interests shall be represented by issued and outstanding Units, which may be divided into one (1) or more types, classes, or series. Each type, class, or series of Units shall have the privileges, preference, distribution priorities, duties, liabilities, obligations and rights, including voting rights, if any, set forth in this Agreement. The Units shall not be certificated. The Board shall maintain the Members Schedule to include the number of Units, including types, classes and series, held by each of them and shall update the Members Schedule upon the issuance or Transfer of any Units to any new or existing Member as permitted hereunder. Section 2.02 Authorization and Issuance of Common Units. Subject to compliance with the terms of this Agreement, the Company is hereby authorized to issue a class of Units designated as Common Units. Section 2.03 Other Issuances. In addition to the Common Units, the Company is hereby authorized, subject to compliance with the provisions of this Agreement (including Section 7.04), to authorize and issue or sell to any Person any of the following (collectively, “New Interests”): (a) any new type, class or series of Units not otherwise described in this Agreement, which Unit s may be designated as classes or series of the Common Units but having different rights; and (b) Unit Equivalents. Section 2.04 Regulatory Compliance. Notwithstanding anything else contained herein, any authorization, issuance, or sale of additional Units, Unit Equivalents or New Interests shall be permitted only if such authorization, issuance or sale: (a) is conducted in compliance with the requirements of all Regulatory Laws (including the applicable Regulatory Authority), including that such authorization, issuance or sale may be subject to the prior approval of the Regulatory Authorities; and (b) will not be reasonably expected to preclude or materially delay, jeopardize, impede or impair, or impose materially burdensome terms and conditions on, the ability of the Company or any of its subsidiaries to conduct any Regulated Activities or to obtain, retain, renew PAGE 5 OF 48 4840-1943-8017, v. 1 or reinstate any Regulatory License Any purported authorization, issuance, or sale of any Units, Unit Equivalents or New Interests in violation of this Section 2.04 shall be null and void. ARTICLE III MEMBERS Section 3.01 Admission of New Members. (a) Notwithstanding anything else contained herein, a Person not already a Member of the Company shall be admitted into the Company as a Member only if: (i) such Person is suitable, eligible or otherwise qualified pursuant to any Regulatory Laws (including by the applicable Regulatory Authority) to be a Member and to own or control the applicable Units; (ii) such admission is conducted in compliance with the Regulatory Laws, including that such admission may be subject to the prior approval of the Regulatory Authorities; and (iii) such admission would not reasonably be expected to preclude or materially delay, jeopardize, impede or impair, or impose materially burdensome terms and conditions on, the ability of the Company or any of its subsidiaries to conduct any Regulated Activities or to obtain, retain, renew or reinstate any Regulatory License. Any admission or attempted admission of a Person as a Member in violation of this Section 3.01(a) shall be null and void and of no effect for all purposes of this Agreement. (b) Any Person not already a Member of the Company may be admitted as a Member from time to time: (i) in connection with an issuance of Units by the Company; and (ii) in connection with a Transfer of Units, in each case, subject to compliance with the provisions of this Agreement. (c) In order for any Person not already a Member of the Company to be admitted as a Member, whether pursuant to an issuance or Transfer of Units, (i) Section 3.01(a) shall be complied with and (ii) such Person shall have executed and delivered to the Company a written undertaking substantially in the form of the Joinder Agreement. Upon the amendment of the Members Schedule by the Board and the satisfaction of any other applicable conditions, including, if a condition, the receipt by the Company of payment for the issuance of the applicable Units, such Person shall be admitted as a Member and deemed listed as such on the books and records of the Company and thereupon shall be issued his, her or its Units. Section 3.02 Representations and Warranties of Members. By execution and delivery of this Agreement or a Joinder Agreement, as applicable, each Member, whether admitted as of the date hereof or pursuant to Section 3.01, represents and warrants to the Company and acknowledges that: (a) The Units have not been registered under the Securities Act or the securities laws of any other jurisdiction, are issued in reliance upon federal and state exemptions for transactions not involving a public offering and cannot be disposed of unless: (i) they are subsequently registered or exempted from registration under the Securities Act ; and (ii) the provisions of this Agreement have been complied with; PAGE 6 OF 48 4840-1943-8017, v. 1 (b) Such Member’s Units are being acquired for its own account solely for investment and not with a view to resale or distribution thereof; (c) Such Member, with the assistance of its advisor (if any): (i) has conducted its own independent review and analysis of the business, operations, assets, liabilities, results of operations, financial condition and prospects of the Company; (ii) has made its own evaluation of the legal, tax, accounting, financial and other merits and risks of an investment in the Company; and (iii) acknowledges that it and its advisors (if any) have been provided adequate access to the personnel, properties, premises and records of the Company and Company Subsidiaries for such purpose; (d) The determination of such Member to acquire Units has been made by such Member independent of any other Member and independent of any statements or opinions as to the advisability of such purchase or as to the business, operations, assets, liabilities, results of operations, financial condition and prospects of the Company and Company Subsidiaries that may have been made or given by any other Member or by any agent or employee of any other Member; (e) Such Member, with the assistance of its own professional advisors, to the extent such Member has deemed appropriate, has such knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of an investment in the Company and making an informed decision with respect thereto; (f) Such Member is able to bear the economic and financial risk of an investment in the Company for an indefinite period of time; (g) The execution, delivery and performance of this Agreement have been duly authorized by such Member and do not require such Member to obtain any consent or approval that has not been obtained and do not contravene or result in a default in any material respect under any provision of any law or regulation applicable to such Member or other governing documents or any agreement or instrument to which such Member is a party or by which such Member is bound; (h) This Agreement is valid, binding and enforceable against such Member in accordance with its terms, except as may be limited by Bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ ri ghts or general equity principles (regardless of whether considered at law or in equity); (i) Neither the issuance of any Units to any Member nor any provision contained herein will entitle the Member to remain in the employment of the Company or any Company Subsidiary or affect the right of the Company or any Company Subsidiary to terminate the Member’s employment at any time for any reason, other than as otherwise provided in such Member’s employment agreement or other similar agreement with the Company or Company Subsidiary; (j) Such Member is suitable, eligible or otherwise qualified pursuant to any Regulatory Laws (including by the applicable Regulatory Authority) to be a Member and to own or control the applicable Units; PAGE 7 OF 48 4840-1943-8017, v. 1 (k) Such Member’s acquisition of the Units does not violate the laws of the jurisdictions under which such Member resides or is domiciled and, as applicable, is formed or organized (other than the Federal Cannabis Laws); (l) SUCH MEMBER UNDERSTANDS AND ACKNOWLEDGES THAT THE COMPANY INTENDS TO ENGAGE, DIRECTLY OR INDIRECTLY, IN CANNABIS RELATED ACTIVITIES AND THAT SUCH MEMBER HAS REVIEWED AND CONSIDERED THE RISK FACTORS RELATED TO AN INVESTMENT IN THE COMPANY ATTACHED HERETO AS EXHIBIT C AND ADDITIONAL RISK FACTORS THAT MAY AFFECT AN INVESTMENT IN THE COMPANY, INCLUDING WITHOUT LIMITATION THE FOLLOWING: (i) CANNABIS IS CLASSIFIED UNDER FEDERAL LAW AS A SCHEDULE I NARCOTIC. UNDER SUPREME COURT PRECEDENT, FEDERAL LAW CRIMINALIZING THE USE OF CANNABIS IS NOT PREEMPTED BY STATE LAW THAT LEGALIZES ITS USE. THUS, IRRESPECTIVE OF ANY STATE LAW OR OTHER REGULATORY LAW, THE FEDERAL GOVERNMENT COULD AT ANY TIME CHOOSE TO PROSECUTE THE COMPANY AND ITS OWNERS, INCLUDING ITS MEMBERS; (ii) Because cannabis is illegal under federal law, many banking institutions take the position that they cannot accept for deposit funds from the marijuana trade, and therefore cannot do business with participants in the cannabis industry, such as the Company; and (iii) Certain taxable deductions may be barred under 26 U.S.C. § 280E, which states that a business engaging in the trafficking of a Schedule I or II controlled substance (e.g. cannabis) is barred from taking certain “necessary and ordinary” expenses as deductions. As such, the Members may experience “phantom income,” where they are taxed on the allocated profits of the Company in excess of the profits of the Company which are actually distributed to them hereunder. (m) None of the foregoing shall replace, diminish or otherwise adversely affect any Member’s representations and warranties made by it in any Subscription Agreement. Section 3.03 No Personal Liability. Except as otherwise expressly provided in the LLC Act or expressly in this Agreement, no Member will be obligated personally for any debt, obligation or liability of the Company or of any Company Subsidiary or other Members, whether arising in contract, tort or otherwise, solely by reason of being a Member. Except as otherwise expressly provided in the LLC Act, the liability of each Member shall be limited to the amount of Capital Contributions required to be made by such Member in accordance with the provisions of this Agreement, but only when and to the extent the same shall become due pursuant to the provisions of this Agreement. PAGE 8 OF 48 4840-1943-8017, v. 1 Section 3.04 No Withdrawal. A Member shall not cease to be a Member as a result of the Bankruptcy of such Member. So long as a Member continues to hold any Units, such Member shall not have the ability to withdraw or resign as a Member prior to the dissolution and winding up of the Company and any such withdrawal or resignation or attempted withdrawal or resignation by a Member prior to the dissolution or winding up of the Company shall be null and void. As soon as any Person who is a Member ceases to hold any Units, such Person shall no longer be a Member. Section 3.05 Death. The death of any Member shall not cause the dissolution of the Company. In such event the Company and its business shall be continued by the remaining Member or Members and the Units owned by the deceased Member shall , subject to compliance with the provisions of this Agreement, be Transferred to such Member’s heirs; provided, however, that within a reasonable time after such Transfer, the applicable heirs shall sign a written undertaking substantially in the form of the Joinder Agreement. Section 3.06 Voting. Except as otherwise provided by this Agreement (including Section 13.10) or as otherwise required by Applicable Law, each Member shall be entitled to one (1) vote per Common Unit on all matters upon which the Members have the right to vote under this Agreement. For clarity, the Local Preference Owner shall retain control of at least fifty one percent (51%) of the votes on all decisions involving the operations of the Company’s business upon which the Members have a right to vote under this Agreement. Section 3.07 No Interest in Company Property. No real or personal property of the Company shall be deemed to be owned by any Member individually, but shall be owned by, and title shall be vested solely in, the Company. Without limiting the foregoing, each Member hereby irrevocably waives during the term of the Company any right that such Member may have to maintain any action for partition with respect to the property of the Company. ARTICLE IV CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS Section 4.01 Initial Capital Contributions. Each Member as of the date hereof agrees to contribute to the Company such initial Capital Contributions in the aggregate amount set forth on the Members Schedule as consideration for the number, type, series and class of Units in the amounts set forth opposite such Member’s name on the Members Schedule as in effect on the date hereof. Capital Contributions shall be credited to the contributing Member's Capital Account at the time of such contribution to the Company. Section 4.02 Additional Capital Contributions. (a) No Member shall be required to make any additional Capital Contributions to the Company. Any future Capital Contributions made by any Member shall only be made with the consent of the Board and in connection with an issuance of Units made in compliance with Article VIII. (b) No Member shall be required to lend any funds to the Company and no Member shall have any personal liability for the payment or repayment of any Capital Contribution PAGE 9 OF 48 4840-1943-8017, v. 1 by or to any other Member. If one or more Members lend funds to the Company in order to fund operating expenses or working capital needs of the Company, the interest rate on such borrowing shall not exceed an amount equal to the Company Interest Rate, and such loan shall be on such other terms as determined by the Board and the lending Member. (c) In the event that the Company, in the Board’s sole discretion, does not have sufficient cash flow to pay its operating expenses or capital expenses or otherwise requires additional capital for working capital needs, the Board shall first provide notice to all Members of such capital needs and permit any Member to lend to the Company at the Company Interest Rate or to make additional Capital Contributions to the Company (the “Additional Capital”) for such capital needs, in such Member’s sole discretion. Upon the contribution of any such Additional Capital, the following shall apply: (i) the Company shall pay a Preferred Return on such Additional Capital in accordance with Section 6.02 and other provisions of this Agreement, and (ii) the Member contributing any such Additional Capital shall receive a priority return on Distributions with respect to its Unrecovered Additional Capital in accordance with Section 6.02 and other provisions of this Agreement. Section 4.03 Maintenance of Capital Accounts. The Company shall establish and maintain for each Member a separate capital account (a “Capital Account”) on its books and records in accordance with this Section 4.03 and other provisions of this Article IV. Each Capital Account shall be established and maintained in accordance with the following provisions: (a) Each Member’s Capital Account shall be increased by the amount of: (i) such Member’s Capital Contributions, including such Member’s initial Capital Contribution; (ii) any Net Income or other item of income or gain allocated to such Member pursuant to Article V; and (iii) any liabilities of the Company that are assumed by such Member or secured by any property Distributed to such Member. (b) Each Member’s Capital Account shall be decreased by: (i) the cash amount or Book Value of any property Distributed to such Member pursuant to Article VI and Section 11.03(c); (ii) the amount of any Net Loss or other item of loss or deduction allocated to such Member pursuant to Article V; and (iii) the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company. (c) The Rules of Treasury Regulations § 1.704-1(b)(2)(iv)(d) (with respect to the maintenance of capital accounts in connection with the exercise of a noncompensatory option) PAGE 10 OF 48 4840-1943-8017, v. 1 shall be incorporated by reference and shall be given effect in the maintenance of the Capital Accounts. Section 4.04 Succession Upon Transfer. In the event that any Units are Transferred in accordance with the terms of this Agreement, the Transferee shall succeed to the Capital Account of the Transferor to the extent it relates to the Transferred Units and, subject to Section 5.04, shall receive allocations and Distributions pursuant to Article V and Article VI in respect of such Units. Section 4.05 Negative Capital Accounts. In the event that any Member shall have a deficit balance in his, her or its Capital Account, such Member shall have no obligation, during the term of the Company or upon dissolution or liquidation thereof, to restore such negative balance or make any Capital Contributions to the Company by reason thereof, except as may be required by Applicable Law or in respect of any negative balance resulting from a withdrawal of capital or dissolution in contravention of this Agreement. Section 4.06 No Withdrawal. No Member shall be entitled to withdraw any part of his, her or its Capital Account or to receive any Distribution from the Company, except as provided in this Agreement. No Member shall receive any interest, salary or drawing with respect to its Capital Contributions or its Capital Account, except as otherwise provided in this Agreement. The Capital Accounts are maintained for the sole purpose of allocating items of income, gain, loss and deduction among the Members and shall have no effect on the amount of any Distributions to any Members, in liquidation or otherwise. Section 4.07 Treatment of Loans from Members. Loans by any Member to the Company shall not be considered Capital Contributions and shall not affect the maintenance of such Member’s Capital Account, other than to the extent provided in Section 4.03(a)(iii), if applicable. Section 4.08 Intent and Modifications. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations § 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. If the Board determines that it is prudent to modify the manner in which the Capital Accounts, or any increases or decreases to the Capital Accounts, are computed in order to comply with such Treasury Regulations, the Board may authorize such modifications. ARTICLE V ALLOCATIONS Section 5.01 Allocation of Net Income and Net Loss. For each Fiscal Year (or portion thereof), except as otherwise provided in this Agreement, Net Income and Net Loss (and, to the extent necessary, individual and/or gross items of income, gain, loss or deduction) of the Company shall be allocated among the Members in a manner such that, after adjusting each Member’s Capital Account for all Capital Contributions and Distributions made during such Fiscal Year (or portion thereof) and after giving effect to the special allocations set forth in Section 5.02, the Target Capital Account balance of each Member (which may be either a positive or negative balance), PAGE 11 OF 48 4840-1943-8017, v. 1 immediately after making such adjustments and allocations, is, as nearly as possible, equal to the Distributions that would be made to such Member pursuant to Section 11.03(c) if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Book Value, all Company liabilities were satisfied (limited with respect to each Nonrecourse Liability to the Book Value of the assets securing such liability), and the net assets of the Company were Distributed, in accordance with Section 11.03(c). Section 5.02 Regulatory and Special Allocations. Notwithstanding the provisions of Article VI: (a) If there is a net decrease in Company Minimum Gain (determined according to Treasury Regulations § 1.704-2(d)(1)) during any Fiscal Year, each Member shall be specially allocated Net Income for such Fiscal Year (and, if necessary, subsequent Fiscal Years ) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations § 1.704-2(g). The items to be so allocated shall be determined in accordance with Treasury Regulations §§ 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.02(a) is intended to comply with the “minimum gain chargeback” requirement in Treasury Regulations § 1.704-2(f) and shall be interpreted consistently therewith. (b) Member Nonrecourse Deductions shall be allocated in the manner required by Treasury Regulations § 1.704-2(i). Except as otherwise provided in Treasury Regulations § 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Fiscal Year, each Member that has a share of such Member Minimum Gain shall be specially allocated Net Income for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to that Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain. Items to be allocated pursuant to this paragraph shall be determined in accordance with Treasury Regulations §§ 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.02(b) is intended to comply with the “minimum gain chargeback” requirements in Treasury Regulations § 1.704- 2(i)(4) and shall be interpreted consistently therewith. (c) In the event any Member unexpectedly receives any adjustments, allocations, or Distributions described in Treasury Regulations §§ 1.704-1(b)(2)(ii)(d)(4), (5), or (6), Net Income shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Adjusted Capital Account deficit created by such adjustments, allocations, or Distributions as quickly as possible. This Section 5.02(c) is intended to comply with the qualified income offset requirement in Treasury Regulations § 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. (d) In the event an allocation of Net Loss would cause or increase an Adjusted Capital Account deficit of a Member in a manner that cannot have substantial economic effect, such Net Loss will, unless otherwise determined by the Board, be allocated among all Members according to their Unit holdings. (e) The allocations set forth in Section 5.02(a) through Section 5.02(c) above (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations under Code § 704. Notwithstanding any other provisions of this Article V (other than PAGE 12 OF 48 4840-1943-8017, v. 1 the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating Net Income and Net Losses among Members so that, to the extent possible, the net amount of such allocations of Net Income and Net Losses and other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to such Member if the Regulatory Allocations had not occurred. (f) The Board and the Members acknowledge that allocations like those described in Proposed Treasury Regulations § 1.704-1(b)(4)(xii)(c) (“Forfeiture Allocations”) result from the allocations of Net Income and Net Loss provided for in this Agreement. For the avoidance of doubt, the Company is entitled to make Forfeiture Allocations and, once required by applicable final or temporary guidance, allocations of Net Income and Net Loss will be made in accordance with Proposed Treasury Regulations § 1.704-1(b)(4)(xii)(c) or any successor provision or guidance. Section 5.03 Tax Allocations. (a) Subject to Section 5.03(b) through Section 5.03(e), all income, gains, losses, and deductions of the Company shall be allocated, for federal, state, and local income tax purposes, among the Members in accordance with the allocation of such income, gains, losses, and deductions among the Members for computing their Capital Accounts, except that if any such allocation for tax purposes is not permitted by the Code or other Applicable Law, the Company’s subsequent income, gains, losses, and deductions shall be allocated among the Members for tax purposes, to the extent permitted by the Code and other Applicable Law, so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts. (b) Items of Company taxable income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members in accordance with Code § 704(c) and such permissible method(s) under Treasury Regulations § 1.704-3 as determined by the Tax Representative with the consent of the Members, so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Book Value. (c) If the Book Value of any Company asset is adjusted pursuant to Treasury Regulations § 1.704-1(b)(2)(iv)(f) as provided in clause (c) of the definition of Book Value, subsequent allocations of items of taxable income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Book Value in the same manner as under Code § 704(c). (d) Allocations of tax credit, tax credit recapture, and any items related thereto shall be allocated to the Members according to their interests in such items as determined by the Tax Representative with the consent of the Members taking into account the principles of Treasury Regulations § 1.704-1(b)(4)(ii). PAGE 13 OF 48 4840-1943-8017, v. 1 (e) The Board shall make allocations pursuant to this Section 5.03 in accordance with such permissible methods as set forth and in accordance with Treasury Regulations § 1.704-3 and this Agreement. (f) Allocations pursuant to this Section 5.03 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Losses, Distributions, or other items pursuant to any provisions of this Agreement. Section 5.04 Allocations in Respect of Transferred Units. In the event of a Transfer of Units during any Fiscal Year made in compliance with the provisions of Article VIII Net Income, Net Losses, and other items of income, gain, loss, and deduction of the Company attributable to such Units for such Fiscal Year shall be determined using the interim closing of the books method. Section 5.05 Curative Allocations. In the event that the Tax Representative determines, after consultation with counsel experienced in income tax matters, that the allocation of any item of Company income, gain, loss, or deduction is not specified in this Article V (an “Unallocated Item”), or that the allocation of any item of Company income, gain, loss , or deduction hereunder is clearly inconsistent with the Members’ economic interests in the Company (determined by reference to the general principles of Treasury Regulations § 1.704-1(b) and the factors set forth in Treasury Regulations § 1.704-1(b)(3)(ii)) (a “Misallocated Item”), then the Board may allocate such Unallocated Items, or reallocate such Misallocated Items, to reflect such economic interests; provided, however, that no such allocation will be made without the prior consent of each Member that would be adversely and disproportionately affected thereby; and provided, further, that no such allocation shall have any material effect on the amounts distributable to any Member, including the amounts to be distributed upon the complete liquidation of the Company. ARTICLE VI DISTRIBUTIONS Section 6.01 General. (a) Subject to Section 6.01(b), Section 6.02, and Section 6.03 the Board shall have sole discretion regarding the amounts and timing of Distributions to Members, including to decide to forego payment of Distributions in order to provide for the retention and establishment of reserves of, or payment to third parties of, such funds as it deems necessary with respect to the reasonable business needs of the Company (which needs may include the payment or the making of provision for the payment when due of the Company’s obligations, including, but not limited to, present and anticipated debts and obligations to third parties and Members (as applicable), capital needs and expenses, the payment of any management or administrative fees and expenses, and reasonable reserves for contingencies). (b) Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make any Distribution to Members if such Distribution would violate the LLC Act or Applicable Law. PAGE 14 OF 48 4840-1943-8017, v. 1 Section 6.02 Priority of Distributions. After making all Distributions required for a given Fiscal Year under Section 6.03, and subject to the priority of Distributions pursuant to Section 11.03(c), if applicable, all Distributions determined to be made by the Board pursuant to this Section 6.02 shall be made in the following manner: (a) First, to the Members who have made Capital Contributions to the Company until such Members have been reimbursed for their Capital Contributions; (b) Second, to the Members who have contributed Additional Capital, if any, pro rata in proportion to their Unpaid Preferred Return, until each such Member has received aggregate Distributions under this section sufficient to cause each such Member’s Unpaid Preferred Return to equal zero; (c) Finally, to the Members holding Units (subject to Section 6.04) pro rata in proportion to their aggregate holdings of vested Units treated as one class of Units. Section 6.03 Tax Distributions. (a) Subject to any restrictions in any of the Company’s then-applicable debt- financing arrangements, and subject to the Board’s sole discretion to retain any other amounts necessary to satisfy the Company’s obligations, at least seven (7) days before each date prescribed by the Code for calendar-year corporation to pay annual installments of estimated tax, the Company shall use commercially reasonable efforts to Distribute cash to each Member in proportion to and to the extent of such Member’s Estimated Tax Amount for the applicable calendar year (each such Distribution, a “Tax Advance”). (b) If, at any time after the final Estimated Tax Amount has been Distributed pursuant to Section 6.03(a) with respect to any Fiscal Year, the aggregate Tax Advances to any Member with respect to such Fiscal Year are less than such Member’s Tax Amount for such Fiscal Year (a “Shortfall Amount”), the Company shall use commercially reasonable efforts to Distribute cash in proportion to and to the extent of each Member’s Shortfall Amount. The Company shall use commercially reasonable efforts to Distribute Shortfall Amounts with respect to a Fiscal Year before the seventy-fifth (75th) day of the next succeeding Fiscal Year; provided, however that if the Company has made Distributions other than pursuant to this Section 6.03, the Board may apply such Distributions to reduce any Shortfall Amount. (c) If the aggregate Tax Advances made to any Member pursuant to this Section 6.03 for any Fiscal Year exceed such Member’s Tax Amount (an “Excess Amount”), such Excess Amount shall reduce subsequent Tax Advances that would be made to such Member pursuant to this Section 6.03, except to the extent taken into account as an advance pursuant to Section 6.03(d) to reduce subsequent Distributions. (d) For avoidance of doubt, any Distributions made pursuant to this Section 6.03 shall be treated as advances on Distributions payable to the applicable Member pursuant to and shall reduce the amount otherwise Distributable to such Member pursuant to Section 6.02 or Section 11.03(c). Further, the amount to be Distributed as a tax Distribution in respect of any Fiscal Year pursuant to this Section 6.03 shall be computed as if any Distributions made pursuant to PAGE 15 OF 48 4840-1943-8017, v. 1 Section 6.02 during such Fiscal Year were a tax Distribution in respect of such Fiscal Year, with the understanding that the Company shall not make a tax Distribution in respect of any Fiscal Year to the extent any Distributions made pursuant to Section 6.02 during such Fiscal Year exceeds the Tax Amount of the Member in respect of such Fiscal Year. (e) Any good faith determination of the amount of a tax Distribution made by the Board pursuant to this Section 6.03 shall be conclusive and binding on all Members absent manifest error. Section 6.04 Tax Withholding; Withholding Advances. (a) Tax Withholding. If requested by the Board or Members, each Member shall, if able to do so, deliver to the Board: (i) any applicable IRS forms or an affidavit in form satisfactory to the Board that the applicable Member (or its members, as the case may be) is not subject to withholding under the provisions of any federal, state, local, foreign or other Applicable Law; (ii) any certificate that the Board may reasonably request with respect to any such laws; and/or (iii) any other form or instrument reasonably requested by the Board relating to any Member’s status under such law. (iv) If a Member fails or is unable to deliver to the Board the IRS form or affidavit described in Section 6.04(a)(i), the Board may withhold amounts from such Member in accordance with Section 6.04(b). (b) Withholding Advances. The Company is hereby authorized at all times to make payments (“Withholding Advances”) with respect to each Member in amounts required to discharge any obligation of the Company (as determined by the Tax Representative based on the advice of legal or tax counsel to the Company) to withhold or make payments to any federal, state, local or foreign taxing authority (a “Taxing Authority”) with respect to any Distribution or allocation by the Company of income or gain to such Member and to withhold the same from Distributions to such Member. Any funds withheld from a Distribution by reason of this Section 6.04(b) shall nonetheless be deemed Distributed to the Member in question for all purposes under this Agreement and, at the option of the Board, shall be charged against the Member’s Capital Account in accordance with this Agreement. (c) Repayment of Withholding Advances. Any Withholding Advance made by the Company to a Taxing Authority on behalf of a Member and not simultaneously withheld from a Distribution to that Member shall, with interest thereon accruing from the date of payment at the Company Interest Rate: (i) be promptly repaid to the Company by the Member on whose behalf the Withholding Advance was made; or PAGE 16 OF 48 4840-1943-8017, v. 1 (ii) with the consent of the Board, be repaid by reducing the amount of the next succeeding Distribution or Distributions to be made to such Member. Interest shall cease to accrue from the time the Member on whose behalf the Withholding Advance was made repays such Withholding Advance (and all accrued interest) by either method of repayment described above. (d) Indemnification. Each Member hereby agrees to indemnify and hold harmless the Company, the Board and the other Members from and against any liability with respect to taxes, interest or penalties which may be asserted by reason of the Company’s failure to deduct and withhold tax on amounts Distributable or allocable to such Member. The provisions of this Section 6.04(d) and the obligations of a Member pursuant to Section 6.04(c) shall survive the termination, dissolution, liquidation and winding up of the Company and the withdrawal of such Member from the Company or Transfer of its Units. The Company may pursue and enforce all rights and remedies it may have against each Member under this Section 6.04, including bringing a lawsuit to collect repayment with interest of any Withholding Advances. (e) Overwithholding. Neither the Company nor the Board shall be liable for any excess taxes withheld in respect of any Distribution or allocation of income or gain to a Member. In the event of an overwithholding, a Member’s sole recourse shall be to apply for a refund from the appropriate Taxing Authority. Section 6.05 Distributions in Kind. (a) The Board is hereby authorized, in its sole discretion, to make Distributions to the Members in the form of securities or other property held by the Company; provided, however, that Tax Advances shall only be made in cash. In any non-cash Distribution, the securities or property so Distributed will be Distributed among the Members in the same proportion and priority as cash equal to the Fair Market Value of such securities or property would be Distributed among the Members pursuant to Section 6.02. (b) Any Distribution of securities shall be subject to such conditions and restrictions as the Board determines are required or advisable to ensure compliance with Applicable Law. In furtherance of the foregoing, the Board may require that the Members execute and deliver such documents as the Board may deem necessary or appropriate to ensure compliance with all federal and state securities laws that apply to such Distribution and any further Transfer of the Distributed securities, and may appropriately legend the certificates that represent such securities to reflect any restriction on Transfer with respect to such laws. (c) Upon any such Distribution, such Fair Market Value of the non-cash assets Distributed will be debited against the each applicable Member’s respective Capital Account at such Fair Market Value, and any such Distributions shall be deemed for purposes of determining Net Profits or Net Losses (if any) to have been sold by the Company for an amount equal to such Fair Market Value and any such deemed Net Profits or Net Losses shall be allocated to the Members’ respective Capital Accounts in accordance with this Agreement. PAGE 17 OF 48 4840-1943-8017, v. 1 Section 6.06 Distribution Upon Deemed Liquidation Event. In the event of a Deemed Liquidation Event, the Board shall distribute the proceeds of such Deemed Liquidation Event in the manner provided in Section 11.03(c). Section 6.07 Limitations on Distributions to Units Treated as Profits Interests. (a) Unvested Units. Notwithstanding Section 6.02, but subject to Section 6.03 (regarding tax Distributions), any Members holding any Units subject to vesting restrictions shall not be entitled to Distributions with regard to any such Units that are not vested at the time of an applicable Distribution, except as may otherwise be provided in an applicable agreement. (b) Profits Interest Hurdle. It is the intention of the Members that, with respect to Distributions to Members issued for the benefit of the Company as contemplated in Section 2.03 (together, the “Profits Interest Members”), such Distributions shall be limited to the extent necessary so that such Units constitutes a “profits interest” for U.S. federal income tax purposes. In furtherance of the foregoing, and notwithstanding anything to the con trary in this Agreement, the Board shall, if necessary, limit any such Distributions to Profits Interest Members so that such Distributions do not exceed each Profits Interest Member’s share of the aggregate amount of unrealized appreciation in the assets of the Company between the date of the issuance of such Units and the date of such Distribution, it being understood that such unrealized appreciation shall be determined on the basis of the Book Value of the assets of the Company at the time any such Units are issued as determined by the Members at the time (the “Profits Interest Hurdle”). Such Profits Interest Hurdle amount or value may be set forth in an applicable agreement and/or on Schedule A. In the event that a Profits Interest Member’s Distributions are reduced pursuant to this subsection, an amount equal to such excess Distributions shall be treated as instead apportioned to the other Members (including the Profits Interest Members that have met any prior Profits Interest Hurdle), pro rata in proportion to their aggregate holdings of vested Units. ARTICLE VII MANAGEMENT Section 7.01 Establishment of the Board. A board of managers of the Company (the “Board”) is hereby established and shall be comprised of natural Persons (each such Person, a “Manger”) who shall be appointed in accordance with the provisions of this Section 7.01. The business and affairs of the Company shall be managed, operated and controlled by or under the direction of the Board, and the Board shall have, and is hereby granted, the full and complete power, authority, and discretion for, on behalf of and in the name of the Company, to take such actions as it may in its sole discretion deem necessary or advisable to carry out any and all of the objectives and purposes of the Company, subject only to the terms of this Agreement. Each initial Manager and any Person appointed to be a Manager of the Company, in addition to any other requirements contained herein, shall execute the Joinder Agreement. Section 7.02 Board Composition; Vacancies (a) The Company and the Members shall take such actions as may be required to ensure that the number of Managers of the Company constituting the Board is at all times at PAGE 18 OF 48 4840-1943-8017, v. 1 minimum one (1), unless otherwise modified by a majority vote of the Board, provided, however, that no new Manager may be admitted to the Board without the consent of a Manager appointed by CR. The initial Manager shall be Brandon Johnson. (b) If required by Regulatory Laws, any elected or appointed Manager shall not be deemed duly elected, appointed or qualified and shall not exercise any powers of the position to which such Person has been elected or appointed until such Person has been found suitable, eligible or otherwise qualified to hold such position pursuant to any Regulatory Laws (including by the applicable Regulatory Authority). Each such elected or appointed Manager, by virtue of such election or appointment of such Person, consents to (i) the performance of any personal background investigation that may be required by any Regulatory Authorities or Regulatory Laws and (ii) the disclosure by the Company of any information regarding such officer required by Regulatory Authorities or Regulatory Laws without the need to obtain approval from such Manager. (c) Each Manager, by virtue of holding such position, agrees to the following: (i) Such Manager shall comply with all Regulatory Laws including (A) filing required applications for Regulatory Licenses, if any, (B) providing all information regarding such Manager as may be requested or required by Regulatory Authorities (including in connection with any application for a Regulatory License), and (C) responding to written or oral questions or inquiries from any Regulatory Authorities. (ii) In the event that such Manger (A) has experienced an event or circumstance, or otherwise reasonably believes, that such Manager may meet any condition to be deemed an Affected Person or (B) has knowledge that any Member or any other Person elected or appointed as a Manager or Officer of the Company or any other current Manager or Officer of the Company has experienced an event or circumstance, or otherwise may meet any condition to be deemed an Affected Person, then, in all cases, such Manager shall promptly notify the Company of the relevant details. (iii) Upon receipt of a notice that a Manager may meet any condition to be deemed an Affected Person, the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members may, but are not obligated to, permit the applicable Person a specified period of time (as determined by the Disinterested Manager or the Disinterested Members, as applicable, to the extent permitted by any Regulatory Laws (including by the appl icable Regulatory Authority)) to take all actions, at such Person’s costs, to cure such condition. (iv) Upon the expiration of such period of time (if any) or otherwise, the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members, shall promptly make a determination regarding such Manager as an Affected Person. If the Disinterested Managers or the Disinterested Members, as applicable, determine that such Manager is an Affected Person, the Company shall, PAGE 19 OF 48 4840-1943-8017, v. 1 and the Board shall the cause the Company to, remove such Manager as promptly as possible or as otherwise directed by the applicable Regulatory Authority. If the Disinterested Managers or the Disinterested Members determine that such Manager is a not Affected Person, such Manager shall continue to hold office until such Manager’s successor is designated by the Members or until such Manager’s earlier death, resignation or removal. (d) The removal of a Manager shall not affect the Manager’s rights as a Member, if applicable, and shall not constitute a withdrawal by such Member from the Company. Upon the removal or resignation of a Manager, the Manager shall cooperate with the Company to perform all actions required by Applicable Law or by Regulatory Authorities as related to such removal or resignation. (e) In the event that the applicable Members shall fail to designate in writing a representative to fill a vacant Manager position on the Board, and such failure shall continue for more than thirty (30) days after notice from the Company with respect to such failure, then the vacant position shall be filled by an individual designated by the other Manager(s) then in office; provided, that such individual shall be removed from such position if and when the Members entitled to fill such vacancy so direct and simultaneously designate a new Manager. Section 7.03 Meetings of the Board; Quorum; Manner of Acting. (a) Quorum. A majority of the Managers serving on the Board shall constitute a quorum for the transaction of business of the Board, provided, however, that a quorum shall require the presence of any Manager appointed by CR. At all times when the Board is conducting business at a meeting of the Board, a quorum of the Board must be present at such meeting. If a quorum shall not be present at any meeting of the Board, then the Managers present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. (b) Participation. Any Manager may participate in a meeting of the Board by means of telephone or video conference or other communications device that permits all Managers participating in the meeting to hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. A Manager may vote or be present at a meeting either in person or by proxy, and such proxy may be granted in writing, by means of Electronic Transmission or as otherwise permitted by Applicable Law. (c) Binding Act. Each Manager shall have one vote on all matters submitted to the Board or any committee thereof. Except as otherwise provided in this Agreement, with respect to any matter before the Board, the act of a majority of the Managers constituting a quorum shall be the act of the Board. Section 7.04 Actions Requiring Approval of Members. Subject to any contrary provision herein, the Company shall not enter into any commitment, without the written approval of the Unitholders holding at least seventy five percent (75%) of the Common Units, which must include CR, to: PAGE 20 OF 48 4840-1943-8017, v. 1 (a) Amend, modify or waive any provisions of the Articles of Organization or this Agreement, in whole or in part; provided, however, that a Manager may, without the consent of the other Members, amend the (i) the Articles of Organization in accordance with the provisions of this Agreement or (ii) the Members Schedule following any new issuance, redemption, repurchase or Transfer of Membership Interests in accordance with this Agreement; (b) Issue additional Membership Interests, equity securities, or other securities or, except in connection with a Transfer of Membership Interests that complies with the applicable provisions of this Agreement, admit additional Members to the Company; (c) Incur any indebtedness, pledge or grant liens on any assets or guarantee, assume, endorse or otherwise become responsible for the obligations of any other Person in excess of $10,000 in a single transaction or series of related transactions, or in excess of $50,000 in the aggregate at any time outstanding; provided, however, that indebtedness incurred in the Company’s ordinary course of business for inventory, the full amount of which is due in thirty (30) days or less, shall not require the approval specified in this Section 7.04(c). (d) Make any loan or advance to or a capital contribution or investment in, any Person, in excess of $5,000; (e) Enter into or effect any transaction or series of related transactions involving the purchase, lease, license, exchange or other acquisition (including by merger, consolidation, sale of stock or acquisition of assets) by the Company of any assets and/or equity interests of any Person, other than in the ordinary course of business consistent with past practice; (f) Enter into or effect any transaction or series of related transactions involving the sale, lease, license, exchange or other disposition (including by merger, consolidation, sale of stock or sale of assets) by the Company of any assets or equity interests, other than sales of inventory in the ordinary course of business consistent with past practice; (g) Convert from a limited liability company to a corporation or change tax status; (h) Enter into a new line of business; (i) Settle any lawsuit, action, dispute or other proceeding or otherwise assume any liability with a value in excess of $10,000 or agree to the provision of any equitable relief by the Company; (j) Materially alter the business operations of the Company; or (k) Dissolve, wind up or liquidate the Company or initiate a bankruptcy or state insolvency or receivership proceeding involving the Company. Section 7.05 Meetings of the Members. PAGE 21 OF 48 4840-1943-8017, v. 1 (a) Generally. The Members shall meet at such time and at such place as the Members may designate. Meetings of the Members may be held either in person or by means of telephone or video conference or other communications device that permits all Members participating in the meeting to hear each other, at the offices of the Company or such other place (either within or outside the State of California) as may be determined from time to time by the Members. Written notice of each meeting of the Members shall be given to each Member at least twenty-four (24) hours prior to each such meeting. (b) Attendance and Waiver of Notice. Attendance of a Member at any meeting shall constitute a waiver of notice of such meeting, except where a Member attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Members need be specified in the notice or waiver of notice of such meeting. (c) Quorum. A majority of the Members holding Common Units shall constitute a quorum for the transaction of business of the Company; provided, however that a quorum shall require CR. At all times when the Members are conducting business at a meeting, a quorum of the Members must be present at such meeting. If a quorum shall not be present at any meeting of the Members, then the Members present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. (d) Participation. Any Member holding Common Units may participate in a meeting of the Members by means of telephone or video conference or other communications device that permits all Members participating in the meeting to hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. A Member may vote or be present at a meeting either in person or by proxy, and such proxy may be granted in writing, by means of Electronic Transmission or as otherwise permitted by Applicable Law. (e) Binding Act. Each Member holding Common Units shall have the number of votes equivalent to such Member’s Membership Interest on all matters submitted to the Members. With respect to any matter before the Members, the act of the Members holding at least seventy five percent (75%) of the Units, which must include CR, shall be the act of the Members. (f) Action by Written Consent. Notwithstanding anything herein to the contrary, any action of the Members (or any committee) may be taken without a meeting if either: (a) a written consent of a majority of the Members holding Common Units, which must include CR, (or committee), shall approve such action; provided, however that prior written notice of such action is provided to all Members at least one (1) day before such action is taken; or (b) a written consent constituting all of the Members (or committee) shall approve such action. Such consent shall have the same force and effect as a vote at a meeting where a quorum was present and may be stated as such in any document or instrument filed with the Secretary of State of California. PAGE 22 OF 48 4840-1943-8017, v. 1 Section 7.06 Compensation; No Employment. (a) A Manager shall be reimbursed for reasonable out-of-pocket expenses incurred in the performance of such Person’s duties as a Manager, pursuant to such policies as from time to time are established by the Company. Nothing contained in this Section 7.06 shall be construed to preclude any Manager from serving the Company in any other capacity and receiving reasonable compensation for such services. (b) This Agreement does not, and is not intended to, confer upon any Manager any rights with respect to continued employment by the Company, and nothing herein should be construed to have created any employment agreement with any Manager. Section 7.07 No Personal Liability. By Applicable Law or expressly in this Agreement, no Manager will be obligated personally for any debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Manager. Section 7.08 No Exclusive Duty. No Manager shall be required to manage the Company as such Manager’s sole and exclusive occupation and a Manager may have other business interests and may engage in other investments, occupations and activities in addition to those relating to the Company. Neither the Company nor any Member shall have any right, by virtue of this Agreement, to share or participate in such other investments or activities of any Manager or to the income or proceeds derived therefrom. Although a business opportunity of the sort engaged in by the Company may come to the attention of a Manager, such Manager shall not be under duty, express or implied, to first offer such opportunity to the Company or to the other Members of the Company before the Manager may, personally or on behalf of another entity with which the Manager is affiliated, take advantage of such opportunity, and the Members personally and the Company as an entity, hereby discharge and release each Manager of and from any duty to the contrary which may be owed by any Manager, directly or indirectly, from the doctrine generally referred to as the “corporate opportunity doctrine.” Section 7.09 Officers. (a) The Board may appoint individuals as officers of the Company (the “Officers”) as it deems necessary or desirable to carry on the business of the Company and the Board may delegate to such Officers such power and authority as the Board deems advisable. No Officer need be a Member. An individual may hold two (2) or more offices of the Company. Each Officer shall hold office until such Officer’s successor is designated by the Board or until such Officer’s earlier death, resignation or removal. Any Officer may resign at any time upon written notice to the Board. Any Officer may be removed by the Board with or without cause at any time. A vacancy in any office occurring because of death, resignation, removal or otherwise, may, but need not, be filled by the Board. In accordance with the City of Fresno’s Commercial Cannabis Business Permit Application Evaluation Criteria 2.5, the Local Preference Owner shall be appointed to the highest officer position created pursuant to this Section 7.09, unless another natural person is appointed to that position by mutual agreement of the Board. PAGE 23 OF 48 4840-1943-8017, v. 1 (b) If required by Regulatory Laws, any newly elected or appointed Officer shall not be deemed duly elected, appointed or qualified and shall not exercise any powers of the position to which such individual has been elected or appointed until such individual has been found suitable, eligible or otherwise qualified to hold such position pursuant to any Regulatory Laws (including by the applicable Regulatory Authority). Each such newly elected or appointed Officer, by virtue of such election or appointment of such individual, consents to (i) the performance of any personal background investigation that ma y be required by any Regulatory Authorities or Regulatory Laws and (ii) the disclosure by the Company of any information regarding such officer required by Regulatory Authorities or Regulatory Laws without the need to obtain approval from such officer. (c) Each Officer, by virtue of holding such position, agrees to the following: (i) Such Officer shall comply with all Regulatory Laws including (A) filing required applications for Regulatory Licenses, if any, (B) providing all information regarding such Officer as may be requested or required by Regulatory Authorities (including in connection with any application for a Regulatory License), and (C) responding to written or oral questions or inquiries from any Regulatory Authorities. (ii) In the event that such Officer (A) has experienced an event or circumstance, or otherwise reasonably believes, that such Officer may meet any condition to be deemed an Affected Person or (B) has knowledge that any Member or any other individual elected or appointed as a director or Officer of the Company or any other current director or Officer of the Company has experienced an event or circumstance, or otherwise may meet any condition to be deemed an Affected Person, then, in all cases, such Officer shall promptly notify the Company of the relevant details. (iii) Upon receipt of a notice that an Officer may meet any condition to be deemed an Affected Person, the Disinterested Managers, or if there are no Disinterested Manager, the Disinterested Members may, but are not obligated to, permit the applicable individual a specified period of time (as determined by the Disinterested Managers or the Disinterested Members, as applicable, to the extent permitted by any Regulatory Laws (including by the applicable Regulatory Authority)) to take all actions, at such individual’s costs, to cure such condition. (iv) Upon the expiration of such period of time (if any) or otherwise, the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members, shall promptly make a determination regarding such Officer as an Affected Person. If the Disinterested Managers or the Disinterested Members, as applicable, determine that such Officer is an Affected Person, the Company shall, and the Board shall the cause the Company to, remove such Officer as promptly as possible or as otherwise directed by the applicable Regulatory Authority. If the Disinterested Managers or the Disinterested Members determine that such Officer PAGE 24 OF 48 4840-1943-8017, v. 1 is a not Affected Person, such Officer shall continue to hold office until such Officer’s successor is designated by the Members or until such Officer’s earlier death, resignation or removal. ARTICLE VIII TRANSFER Section 8.01 General Restrictions on Transfer. (a) Transfer Restrictions. Each Member acknowledges and agrees that each Member (or any Permitted Transferee of such Member) shall not Transfer any Units or Unit Equivalents except as permitted pursuant to Section 8.02, or in strict accordance with the restriction, conditions and procedures described in the other provisions of this Section 8.01, Section 8.03, Section 8.04 and Section 8.05, as applicable, or pursuant to Section 8.06. (b) Other Transfer Restrictions. Notwithstanding any other provision of this Agreement (including Section 8.02), each Member agrees that it will not, directly or indirectly, Transfer any of its Units or Unit Equivalents, and the Company agrees that it shall not issue any New Interests: (i) except as permitted under the Securities Act and other applicable federal or state securities or blue-sky laws, and then, with respect to a Transfer of Units or Unit Equivalents, if requested by the Company, only upon delivery to the Company of a written opinion of counsel in form and substance satisfactory to the Company to the effect that such Transfer may be effected without registration under the Securities Act; (ii) to a Person not already a Member of the Company until the prospective Transferee is admitted as a Member of the Company; (iii) if such Transfer or issuance would cause the Company to be considered a “publicly traded partnership” under § 7704(b) of the Code within the meaning of Treasury Regulation § 1.7704-1(h)(1)(ii), including the look-through rule in Treasury Regulation § 1.7704-1(h)(3); (iv) if such Transfer or issuance would affect the Company’s existence or qualification as a limited liability company under the LLC Act; (v) if such Transfer or issuance would cause the Company to lose its status as a partnership for federal income tax purposes; (vi) if such Transfer or issuance would violate the Applicable Laws including that the perspective Transferee is an Affected Person; (vii) if such Transfer or issuance would reasonably likely to preclude or materially delay, jeopardize, impede or impair, or impose materially burdensome terms and conditions on, the ability of the Company or any Company Subsidiary to PAGE 25 OF 48 4840-1943-8017, v. 1 conduct any Regulated Activities or to obtain, retain, renew or reinstate any Regulatory License; (viii) if such Transfer or issuance would cause the Company to be required to register as an investment company under the Investment Company Act of 1940, as amended; or (ix) if such Transfer or issuance would cause the assets of the Company to be deemed “plan assets” as defined under the Employee Retirement Income Security Act of 1974 or its accompanying regulations or result in any “prohibited transaction” thereunder involving the Company. (c) Joinder Agreement. Except with respect to any Transfer pursuant to a Drag- Along Sale or Tag-Along Sale, no Transfer of Units or Unit Equivalents pursuant to any provision of this Agreement shall be deemed completed until (i) Section 3.01(a) shall be complied with and (ii) the Transferee shall have entered into a Joinder Agreement. (d) Local Preference Owner Transfer. Unless otherwise permitted by the City, the Local Preference Owner may only transfer control or ownership of its Membership Interest to Persons who meet the same requirements for a Local Preference Owner, and, where required, only upon the prior written approval of the City. (e) Transfers in Violation of this Agreement. Any Transfer or attempted Transfer of any Units or Unit Equivalents in violation of this Agreement, including any failure of a Transferee, as applicable, to comply with Section 3.01(a) or enter into a Joinder Agreement pursuant to Section 8.01(c) above, shall be null and void, no such Transfer shall be recorded on the Company’s books, and the purported Transferee in any such Transfer shall not be treated (and the Member proposing to make any such Transfer shall continue to be treated) as the owner of such Units or Unit Equivalents for all purposes of this Agreement. For the avoidance of doubt, any Transfer of a Membership Interest permitted by this Agreement shall be deemed a sale, transfer, assignment, or other disposal of such Membership Interest in its entirety as intended by the parties to such Transfer, and shall not be deemed a sale, transfer, assignment, or other disposal of any less than all of the rights and benefits described in the definition of the term “Membership Interest,” unless otherwise explicitly agreed to by the parties to such Transfer. Section 8.02 Permitted Transfers. Subject to Section 8.01 above, including the requirement to comply with Section 3.01(a) and enter into a Joinder Agreement pursuant to Section 8.01(c) above, permitted Transfers include: (a) a trust under which the distribution of Units may be made only to such Member; (b) a charitable remainder trust, the income from which will be paid only to such Member during its life; (c) a corporation, partnership or limited liability company, the stockholders, partners or members of which are only such Member; (d) for bona fide estate planning purposes, either by will or by the laws of intestate succession, to such Member’s executors, administrator, testamentary trustees, legatees or beneficiaries; or (e) a Transfer by a Member to such Member’s Affiliates. In addition, it shall be deemed a Permitted Transfer (to the extent it’s a Transfer at all) if CR, or any of its Affiliates participate in any transaction which involves : (w) the sale of all or substantially all of the consolidated assets of CR or any of its PAGE 26 OF 48 4840-1943-8017, v. 1 Affiliates to a Third Party Purchaser; (x) a transaction or series of related transactions in which a Third Party Purchaser, or a group of related Third Party Purchasers, acquires no less than a majority of the voting equity of CR or any of its Affiliates; (y) a merger, consolidation, recapitalization, or reorganization of Surterra or any of its Affiliates with or into a Third Party Purchaser that results in a Third Party Purchaser having the ability to designate or elect a majority of the board of directors (or its equivalent) of the resulting entity or its parent company; or (z) CR or any of its Affiliates consummating an initial public offering of its common stock. Section 8.03 Drag-Along Rights. (a) Participation. If one or more Members (together with their respective Permitted Transferees) holding no less than a majority of all the Common Units, which must include CR (such Member or Members with the inclusion of CR, the “Dragging Member”), proposes to consummate, in one transaction or a series of related transactions, a Change of Control (a “Drag- along Sale”), the Dragging Member shall have the right, after delivering the Drag-along Notice in accordance with Section 8.03(c) and subject to compliance with Section 8.03(d), to require that each other Member (each, a “Drag-along Member”) participate in such sale (including, if necessary, by converting their Unit Equivalents into the Units to be sold in the Drag-along Sale) in the manner set forth in Section 8.03(b). For avoidance of doubt, CR shall not be a Drag-along Member pursuant to this Section 8.03. (b) Sale of Units. Subject to compliance with Section 8.03(d): (i) If the Drag-along Sale is structured as a sale resulting in a majority of the Common Units of the Company on a Fully Diluted Basis being held by a Third Party Purchaser, then each Drag-along Member shall sell, with respect to each class or series of Units proposed by the Dragging Member to be included in the Drag-along Sale, the number of Units and/or Unit Equivalents of such class or series equal to the product obtained by multiplying: (A) the number of applicable Units on a Fully Diluted Basis held by such Drag-along Member by; (B) a fraction: (x) the numerator of which is equal to the number of applicable Units on a Fully Diluted Basis that the Dragging Member proposes to sell in the Drag-along Sale; and (y) the denominator of which is equal to the number of applicable Units on a Fully Diluted Basis held by the Dragging Member at such time; and (ii) If the Drag-along Sale is structured as a sale of all or substantially all of the consolidated assets of the Company or as a merger, consolidation, recapitalization or reorganization of the Company or other transaction requiring the consent or approval of the Members, then notwithstanding anything to the contrary in this Agreement (including Section 3.06), each Drag-along Member shall vote in favor of the transaction and otherwise consent to and raise no objection to such transaction, and shall take all actions to waive any dissenters’, appraisal or other similar rights that it may have in connection with such transaction. The Distribution of the aggregate consideration of such transaction shall be made in accordance with Section 11.03(c). PAGE 27 OF 48 4840-1943-8017, v. 1 (c) Sale Notice. The Dragging Member shall exercise its rights pursuant to this Article VIII by delivering a written notice (the “Drag-along Notice”) to the Company and each Drag-along Member no more than ten (10) Business Days after the execution and delivery by all of the parties thereto of the definitive agreement entered into with respect to the Drag-along Sale and, in any event, no later than twenty (20) Business Days prior to the closing date of such Drag- along Sale. The Drag-along Notice shall make reference to the Dragging Members’ rights and obligations hereunder and shall describe in reasonable detail: (i) The name of the person or entity to whom such Units are proposed to be sold; (ii) The proposed date, time and location of the closing of the sale; (iii) The number of each class or series of Units to be sold by the Dragging Member, the proposed amount of consideration for the Drag-along Sale and the other material terms and conditions of the Drag-along Sale, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof and including, if available, the purchase price per Unit of each applicable class or series (which may take into account the Profits Interest Hurdle of any Profits Interest Units to be sold); and (iv) A copy of any form of agreement proposed to be executed in connection therewith. (d) Conditions of Sale. The obligations of the Drag-along Members in respect of a Drag-along Sale under this Section 8.03 are subject to the satisfaction of the following conditions: (i) The consideration to be received by each Drag-along Member shall be the same form and amount of consideration to be received by the Dragging Member per Unit of each applicable class or series (the Distribution of which shall be made in accordance with Section 8.03(b)) and the terms and conditions of such sale shall, except as otherwise provided in Section 8.03(d)(iii), be the same as those upon which the Dragging Member sells its Units; (ii) If the Dragging Member or any Drag-along Member is given an option as to the form and amount of consideration to be received, the same option shall be given to all Drag-along Members; and (iii) Each Drag-along Member shall execute the applicable purchase agreement, if applicable, and make or provide the same representations, warranties, covenants, indemnities and agreements as the Dragging Member makes or provides in connection with the Drag-along Sale; provided, however, that each Drag-along Member shall only be obligated to make individual representations and warranties with respect to its title to and ownership of the applicable Units, authorization, execution and delivery of relevant documents, enforceability of such documents against the Drag-along Member, and other matters relating to such Drag-along Member, but not with respect to any of the foregoing with respect to any other PAGE 28 OF 48 4840-1943-8017, v. 1 Members or their Units; provided, further, that all representations, warranties, covenants and indemnities shall be made by the Dragging Member and each Drag- along Member severally and not jointly and any indemnification obligation shall be pro rata based on the consideration received by the Dragging Member and each Drag-along Member, in each case in an amount not to exceed the aggregate proceeds received by the Dragging Member and each such Drag-along Member in connection with the Drag-along Sale. (e) Cooperation. Each Drag-along Member shall take all actions as may be reasonably necessary to consummate the Drag-along Sale, including, without limitation, entering into agreements and delivering certificates and instruments, in each case, consistent with the agreements being entered into and the certificates being delivered by the Dragging Memb er, but subject to Section 8.03(d)(iii). (f) Expenses. The fees and expenses of the Dragging Member incurred in connection with a Drag-along Sale and for the benefit of all Drag-along Members (it being understood that costs incurred by or on behalf of a Dragging Member for its sole benefit will not be considered to be for the benefit of all Drag-along Members), to the extent not paid or reimbursed by the Company or the Third Party Purchaser, shall be shared by the Dragging Member and all the Drag-along Members on a pro rata basis, based on the consideration received by each such Member; provided, however, that no Drag-along Member shall be obligated to make any out-of- pocket expenditure prior to the consummation of the Drag-along Sale. (g) Consummation of Sale. The Dragging Member shall have ninety (90) days following the date of the Drag-along Notice in which to consummate the Drag-along Sale, on the terms set forth in the Drag-along Notice (which ninety 90-day period may be extended for a reasonable time not to exceed one-hundred and twenty (120) days to the extent reasonably necessary to obtain required approvals or consents from any Governmental Authority). If at the end of such period the Dragging Member has not completed the Drag-along Sale, the Dragging Member may not then exercise its rights under this Section 8.03 without again fully complying with the provisions of this Section 8.03. Section 8.04 Tag-Along Rights. (a) If the Members holding a majority of Common Units desire to Transfer Units (the “Control Group Members”), which such Transfer would result in the Control Group Members, in the aggregate, owning less than a majority of the then outstanding Common Units, whether by sale, merger, or otherwise (a “Significant Sale”), and the Control Group Members do not elect to exercise their rights under Section 8.03 (if applicable), then at least twenty (20) days prior to the closing of such Significant Sale, the Control Group Members, will make an offer (the “Participation Offer”) to all the Members holding Common Units to include in the proposed Significant Sale a certain number of each Member’s Common Units, which will be determined solely by such Member but may not exceed such Member’s Pro Rata Portion. (b) The Participation Offer will describe the terms and conditions, including the price, of any such proposed Significant Sale and the number of Units that a Member may Transfer in the proposed Significant Sale and will be conditioned upon: (i) the consummation of PAGE 29 OF 48 4840-1943-8017, v. 1 the transactions contemplated by the Participation Offer; and (ii) each Member’s execution and delivery of all agreements and other documents as the Control Group Members are required to execute and deliver in connection with such Significant Sale. If any Member accepts the Participation Offer, then the Control Group Members will reduce, to the extent necessary, the number of Units they otherwise would have Transferred in the proposed Significant Sale so as to permit those Members who have accepted the Participation Offer to Transfer the number of Units that they are entitled to Transfer under this Section 8.04, and such Members will Transfer the number of Units specified in the Participation Offer to the proposed transferee in accordance with the terms set forth in the Participation Offer. (c) Any Member that desires to exercise its right to Transfer Units in the Participation Offer will deliver notice to the Control Group Members within ten (10) days after such Member’s receipt of the Participation Offer, specifying the number of Units that such Member desires to Transfer in the Participation Offer, the number of which shall be limited to such Member’s Pro Rata Portion, whereupon such Member will be obligated to Transfer such Units at the closing of such Significant Sale, if and when it occurs. (d) If, prior to the consummation of a Significant Sale, the material terms of the proposed Significant Sale change with the result that any price per Unit to be paid in such proposed Significant Sale is materially greater than the price per such Unit set forth in the Participation Offer or the other principal terms of such proposed Significant Sale are materially more favorable than what was set forth in the Participation Offer, the Participation Offer shall be null and void for purposes of such Transfer, and it will be necessary for a separate Participation Offer to be furnished, and the terms and provisions of this Section 8.04 separately complied with, in order to consummate such proposed Transfer pursuant to this Section 8.04. (e) If the Control Group Members have not completed the proposed Transfer by the end of the one hundred eightieth (180th) day following the date of the delivery of the Participation Offer, each Member will be released from his, her, or its obligations, the Participation Offer shall be null and void, and it shall be necessary for a separate Participation Offer to be furnished, and the terms and provisions of this Section 8.04 separately complied with, in order to consummate such proposed or any other Transfer pursuant to this Section 8.04, unless the failure to complete such proposed Transfer resulted from any failure by any Member to comply with the terms of this Section 8.04. Notwithstanding anything to the contrary contained or implied herein, there will be no liability on the part of the Control Group Members to any Member if a proposed Significant Sale is not consummated for any reason. Section 8.05 Right of First Refusal. (a) Where permitted by the City’s cannabis rules, affirmatively approved by the City, where applicable, and subject to Section 8.01(d), prior to any Member transferring any Common Units, such transferring Member (the “Transferring Member”) shall first provide CR with written notice (the “ROFR Notice”) of such proposed transaction, which notice shall include the identity of the proposed Transferee, the number of Common Units proposed to be sold, and the price per Common Unit to be sold in such proposed transaction. The ROFR Notice shall constitute an irrevocable offer to sell to CR, or its nominee, all of the Common Units proposed to be sold in PAGE 30 OF 48 4840-1943-8017, v. 1 the transaction at a price equal to the price provided in the ROFR Notice (the “ROFR Price”). CR may at its sole discretion, within thirty (30) days of receipt of the ROFR Notice (the “CR ROFR Period”), elect to purchase some or all of such Common Units at the ROFR Price by providing written notice to the Transferring Member (the “CR ROFR Election”). (b) In the event that (i) CR has not provided the CR ROFR Elections to the Transferring Member during the CR ROFR Period or (ii) purchased all of the Units offered to it in the ROFR Notice, then the Transferring Member shall provide the other Members, excluding CR, (the “Non-Transferring Members”) with written notice (the “Secondary ROFR Notice”) of the proposed Transfer transaction, which notice shall include the identity of the proposed Transferee, the number of Common Units (i) proposed to be sold or (ii) available, if CR has not purchased all of the Units offered to it in the ROFR Notice ((i) or (ii) referred to herein as the “Available Common Units”), and the ROFR Price. The Secondary ROFR Notice shall constitute an irrevocable offer to sell to the Non-Transferring Members, or their nominee, all of the Available Common Units at the ROFR Price. Each Non-Transferring Member may at its sole discretion, within thirty (30) days of receipt of the Secondary ROFR Notice (the “Secondary ROFR Period”), elect to purchase some or all of the Available Common Units at the ROFR Price by providing written notice to the Transferring Member (the “Secondary ROFR Election”). In the event that multiple Non-Transferring Members make a Secondary ROFR Election electing to purchase, in the aggregate, more Common Units than are offered in the Secondary ROFR Notice, then the Members making a Secondary ROFR Election shall be entitled to purchase Available Common Units pro rata based on the ratio of the respective holdings of Common Units of such electing Members. In the event that no Non-Transferring Members have provided Secondary ROFR Elections to the Transferring Member during the Secondary ROFR Period, then the Transferring Member may sell Common Units on the terms described in the Secondary ROFR Notice, provided, however, that if such transaction does not close within ninety (90) days of the end of the Secondary ROFR Period, then the Transferring Member may not transfer Common Units without first complying with this Section 8.05. Section 8.06 Regulatory Redemption. (a) The provisions of Section 8.01, Section 8.03, Section 8.04 and Section 8.05 shall not apply to any Transfer or redemption of any Unit or Unit Equivalents pursuant to this Section 8.06. Upon receipt of a notice that a Member may meet any condition to be deemed an Affected Person, the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members, may, but are not obligated to, permit such Member a specified period of time (as determined by the Disinterested Managers or the Disinterested Members, as applicable, to the extent permitted by any Regulatory Laws (including by the applicable Regulatory Authority)) to take all actions, at such Member’s costs, to cure such condition. Upon the expiration of such period of time (if any) or otherwise, the Disinterested Managers or the Disinterested Members shall promptly make a determination regarding such Member as an Affected Person. (b) Upon any determination that a Member is an Affected Person, the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members, PAGE 31 OF 48 4840-1943-8017, v. 1 may determine that the Affected Person is permitted to Transfer its Units and Unit Equivalents to an individual or entity approved by the Disinterested Managers or the Disinterested Members, as applicable (provided, however, that such Transfer is permitted by any Regulatory Laws (including by the applicable Regulatory Authority)) and such Transfer otherwise complies with the provisions of this Agreement. If the Disinterested Managers or the Disinterested Members determine that such Affected Person shall not be permitted to Transfer its Units and Unit Equivalents, such applicable Units and Unit Equivalents shall be subject to redemption in accordance with Sections 8.06(c) through (i). (c) The Units and Unit Equivalents owned or controlled by an Affected Person shall be redeemable by the Company, subject to applicable law, as directed by a Regulatory Authority and, if not so directed, as and to the extent deemed necessary or advisable by the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members, in which event the Company shall deliver a Regulatory Redemption Notice to the Affected Person and shall redeem the Units and Unit Equivalents on the Regulatory Redemption Date and for the Regulatory Redemption Price set forth in the Regulatory Redemption Notice. To the extent that the redemption of less than all of the Units and Unit Equivalents held by an Affected Person would address the deficiency, the Disinterested Managers or the Disinterested Members, as applicable may determine, in their discretion, to redeem only such Units and Unit Equivalents to address the deficiency and such Units and Unit Equivalents shall be selected in such manner as shall be determined by the Disinterested Managers or the Disinterested Members. In accordance with the requirements of the Regulatory Redemption Notice, such Affected Person shall surrender the certificate(s), if any, representing the Units and Unit Equivalents to be so redeemed. (d) From and after the Regulatory Redemption Date, the Units and Unit Equivalents owned or controlled by the Affected Person that will be redeemed shall no longer be deemed to be outstanding, all rights of such Affected Person in such Units and Unit Equivalents, other than the right to receive the Regulatory Redemption Price, shall cease and, if such Units and Unit Equivalents represent all of the Units and Unit Equivalents owned or controlled by the Affected Person, such Affected Person shall cease to be a member, partner or owner, as applicable, of the Company with respect to such Units and Unit Equivalents. (e) The Company may pay the Regulatory Redemption Price in any combination of cash, property or rights, as required by the applicable Regulatory Authority and, if not so required, as determined by the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members; provided, however, that in the event the Company elects to pay all or any portion of the Regulatory Redemption Price with a promissory note, such promissory note shall be unsecured notes of the Company, shall be subordinated to all existing and future indebtedness of the Company, and shall contain such other terms and conditions as the Disinterested Managers or the Disinterested Members determine, in their discretion, to be necessary or advisable. PAGE 32 OF 48 4840-1943-8017, v. 1 (f) Upon the redemption of the applicable Units and Unit Equivalents, the Company may, subject to compliance with the provisions of this Agreement, reissue, cancel, or hold such Units and Unit Equivalents. (g) Except as required by a Regulatory Authority, nothing in this Sections 8.06 shall be deemed or construed to require the Company to redeem or repurchase any Units and Unit Equivalents owned or controlled by an Affected Person. (h) The Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members, shall have the exclusive right to interpret all issues arising under this Sections 8.06, and any determination of the Disinterested Managers or the Disinterested Members, as applicable, under this Sections 8.06 or by a Regulatory Authority (whether or not such determination is final, binding, or non-appealable) shall be final, binding and conclusive determination for all purposes of this Sections 8.06. The Disinterested Managers or the Disinterested Members may also impose additional terms and conditions in connection with any redemption under this Sections 8.06 and, from time to time, may adopt such other provisions and procedures in furtherance of this Sections 8.06. In the event there are no Disinterested Managers or Disinterested Members, the Company and the Affected Person jointly shall appoint an independent individual within forty-five (45) days. (i) Except as may be required by any Regulatory Law or Regulatory Authority, the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members, may waive any of the rights of the Company or any restrictions contained in this Section 8.06 in any instance in which and to the extent the Disinterested Managers or the Disinterested Members, as applicable, determine that a waiver would be in the best interests of the Company. (j) The restrictions set forth in this Sections 8.06 shall be noted conspicuously on any certificate (if any) evidencing the Units and Unit Equivalents in accordance with the requirements of applicable law and any applicable Regulatory Laws. ARTICLE IX COVENANTS Section 9.01 Confidentiality. (a) In pursuit of the Company’s business (the “Authorized Use”), certain trade secrets and business information proprietary to each Member and which each Member considers to be Confidential Information (as hereinafter defined) may be provided to one Member or the Company, and its affiliates (“Receiving Party”) by another Member, and its affiliates (“Disclosing Party”). This Section 9.01 is intended to allow the parties to have open discussions regarding the Confidential Information, while still affording complete protection of the Disclosing Party’s Confidential Information against disclosure or unauthorized use. PAGE 33 OF 48 4840-1943-8017, v. 1 (b) “Confidential Information” means any Disclosing Party confidential or proprietary information, whether marked as confidential or not, in the form of notes, documents, materials, correspondence, or any other form, and anything derived from the foregoing, relating to: (i) the Disclosing Party’s proprietary technology and products, including without limitation, technical data, trade secrets, know-how, research, product plans, ideas or concepts, products services, software, inventions, patent applications, techniques, processes, developments, algorithms, formulas, technology, designs, schematics, drawings, engineering, and hardware configuration information; (ii) proprietary information relating to the Disclosing Party’s operations and business or financial plans or strategies, including but not limited to customers, customer lists, markets, financial statements and projections, standard operating procedures (SOP’s) product pricing and marketing, financial or other strategic business plans or information, disclosed to Receiving Party b y the Disclosing Party, either directly or indirectly, in writing, orally or by drawings or inspection of samples, equipment or facilities; (iii) information received by the Disclosing Party from third parties under confidential conditions which information is identified by the Disclosing Party as being subject to such conditions; and (iv) the Disclosing Party’s “Trade Secrets” which means information which derives economic value, actual or potential, from not being generally known to, or readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and which is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. “Confidential Information” shall not include any information that: (A) is or subsequently becomes publicly available without the Receiving Party's breach of any obligation owed the Disclosing Party; (B) became known to the Receiving Party prior to the Disclosing Party's disclosure of such information to the Re ceiving Party; (C) became known to the Receiving Party from a source other than the Disclosing Party or its affiliates or advisors other than by the breach of an obligation of confidentiality owed to the Disclosing Party; or (D) is independently developed by the Receiving Party without violating any of its obligations under this Agreement. (c) Non-Disclosure of Confidential Information. Other than with respect to disclosures by the Company to a Regulatory Authority in connection with the pursuit of the Company’s business, the Receiving Party will keep all Confidential Information of the Disclosing Party confidential and will not, directly or indirectly, commercially exploit the Confidential Information of the Disclosing Party or use same for any other purpose, except for the Authorized Use. The Receiving Party shall take all reasonable action and shall take at least the same commercially reasonable precautions as it takes to prevent the disclosure of its own Confidential Information, to prevent the disclosure to third parties of the Confidential Information of the Disclosing Party. The Receiving Party shall only have the right to disclose the Confidential Information to its employees, agents, consultants and professional advisers on a “need to know” basis for the Authorized Use. The Receiving Party shall, prior to disclosing any Confidential Information to any such person, issue appropriate instructions to them and obtain all necessary undertakings to ensure that such persons comply with the confidentiality and use obligations and restrictions contained in this Agreement with respect to the Confidential Information of the Disclosing Party. Each Party shall specifically inform each of its representatives, employees and agents who receive any Confidential Information of the other Party hereunder of the obligations created by this Agreement and obtain the written acknowledgment from each such person or entity, PAGE 34 OF 48 4840-1943-8017, v. 1 who shall be bound to accept the non-disclosure obligations of the Receiving Party. Each Party and its officers (personally, under joint and several liability) shall be liable for any breach hereof by any of its employees, agents or representatives. (d) Ownership of Confidential Information. Notwithstanding anything else contained herein, unless otherwise provided in a separate agreement all Confidential Information shall remain the property of the Disclosing Party and shall be held in trust by the Receiving Party for the Disclosing Party unless otherwise provided in a separate agreement. Nothing in this Agreement shall be construed as granting any rights to Receiving Party under any patent or copyright, nor shall this Agreement be construed to grant the Receiving Party any rights in or to the Disclosing Party’s Confidential Information, except the limited right to review such Confidential Information solely for the Authorized Use. (e) Required Disclosure. Other than with respect to disclosures to a Regulatory Authority in connection with the pursuit of the Company’s business, if the Receiving Party becomes legally required to disclose any Confidential Information, the Receiving Party will, to the extent permitted by Applicable Law, give the Disclosing Party prompt notice of such fact so that the Disclosing Party may obtain a protective order or other appropriat e remedy concerning any such disclosure and/or waive compliance with the non-disclosure provisions of this Agreement. The Receiving Party will fully cooperate with the Disclosing Party in connection with the Disclosing Party’s efforts to obtain any such order or other remedy. If any such order or other remedy does not fully preclude disclosure or the Disclosing Party waives such compliance, the Receiving Party will make such disclosure only to the extent that such disclosure is legally required and will use its best efforts to have confidential treatment accorded to the disclosed Confidential Information. (f) Return of Confidential Information. The Receiving Party shall, immediately upon the earlier of: (i) the Disclosing Party or Receiving Party no longer being a Member of the Company; or (ii) the dissolution of the Company, discontinue use of the Confidential Information of the Disclosing Party and return within ten (10) days of receipt of notice from the Disclosing Party requesting the return of the Disclosing Party’s Confidential Information all tangible forms of such Confidential Information, and all copies thereof, which may be or have been in the Receiving Party’s possession. Except as otherwise required by law, the Receiving Party shall promptly redeliver or destroy all material containing or reflecting any information contained in the Confidential Information and will not retain any copies, extracts, or other reproductions of such written material. Subject to the foregoing exceptions, all documents, memoranda, notes, or other writings whatsoever, prepared and based on the information contained in the Confidential Information shall be returned or destroyed. If Confidential Information is destroyed, the Receiving Party will provide written certification signed by one of its senior officers that such Confidential Information has been destroyed. (g) Term. The restrictions on use and disclosure of Confidential Information shall continue indefinitely and shall survive the termination of this Agreement. PAGE 35 OF 48 4840-1943-8017, v. 1 (h) Injunctive Relief. The Receiving Party acknowledges and agrees that the breach by it of any of the Receiving Party’s confidentiality obligations hereunder may cause serious and irreparable harm to the Disclosing Party which could not adequately be compensated for in damages. Each of the Parties therefore consents to an order specifically enforcing the provisions of this Agreement, or an order of injunction being issued against it restraining it from any further breach of such provisions and agrees that such injunction may be issued against it without the necessity of an undertaking as to damages by the other Party. The provisions of this section shall not derogate from any other remedy which a Party may have in the event of such a breach. (i) Indemnification. The Receiving Party shall indemnify the Disclosing Party the officers, members, employees, agents, successors and assigns of the Disclosing Party for any and all damages incurred as a result of any breach hereof by the Receiving Party and/or any employee or agent of the Receiving Party. Section 9.02 Regulatory Covenants of the Members. Each member covenants to the Company as follows: (a) all Units and Unit Equivalents held by such Member shall be held subject to the restrictions and requirements of all Regulatory Laws; (b) such Member shall comply with all Regulatory Laws including (i) filing required applications for Regulatory Licenses, as applicable, (ii) providing all information regarding such Member as may be requested or required by Regulatory Authorities (including in connection with any application for a Regulatory License), and (iii) responding to written or oral questions or inquiries from any Regulatory Authorities; (c) such Member consents to (i) the performance of any personal background investigation that may be required by any Regulatory Authorities or Regulatory Laws and (ii) the disclosure by the Company of any information regarding such Member required by Regulatory Authorities or Regulatory Laws without the need to obtain approval from such Member; (d) any Transfer of Units or Units Equivalents held by such Member shall be subject to the requirements of all Regulatory Laws, including that such Transfer may be subject to the prior approval of the Regulatory Authorities, and any purported Transfer thereof in violation of such requirements shall be void and of no effect; (e) such Member shall promptly notify the Company if such Member owns or controls ten percent (10%) or more of any class or series of Units (assuming the conversion, exchange or exercise of all Unit Equivalents owned or controlled by such Member); and (f) in the event that such Member (i) has experienced an event or circumstance, or otherwise reasonably believes, that such Member may meet any condition to be deemed an Affected Person or (ii) has knowledge that any other Member or any other individual elected or appointed as a director or officer of the Company or any current director or officer of the Company has experienced an event or circumstance, or otherwise may meet any condition to be deemed an PAGE 36 OF 48 4840-1943-8017, v. 1 Affected Person, then, in all cases, such Member shall promptly notify the Company of the relevant details ARTICLE X TAX MATTERS Section 10.01 Income Tax Audits. (a) For each year in which the Company is subject to the Partnership Tax Audit Rules, the Company shall designate Brandon Johnson to serve as the “partnership representative” of the Company within the meaning of Code § 6223, as amended by the Partnership Tax Audit Rules (the “Tax Representative”). Tax Representative shall have sole authority to act on behalf of the Company for purposes of the Code and the Partnership Tax Audit Rules and any comparable provisions of state or local income tax laws with respect to the taxable year(s) such Person was designated to serve in such capacity, until such Person resigns or is replaced by the Members in accordance with the provisions of Section 10.01(b). If the Tax Representative is an entity rather than an individual, the Tax Representative shall appoint an individual who meets the requirements of the Partnership Tax Audit Rules to serve as the “designated individual” (the “Designated Individual”) to act on behalf of the Tax Representative for the Company, which appointment shall be deemed to be the appointment of the Company. For purposes of this Section 10.01, unless otherwise specified, all references to provisions of chapter 63 of the Code shall be to such provisions as enacted by the Partnership Tax Audit Rules. (b) The Person serving as the Tax Representative (or Designated Individual, as applicable) shall be automatically removed as Tax Representative upon the death, dissolution and/or winding up, legal incompetency or Bankruptcy of such Person, and the Person serving as the Tax Representative may be removed at any time by the Members. Upon such removal of the Tax Representative (or Designated Individual, as applicable) a successor to serve in such position shall be designated by the Members, and the removed Tax Representative (or Designated Individual, as applicable) shall not take any action for or on behalf of the Company without the prior written consent of the Members. (c) The Company shall indemnify and hold harmless the Tax Representative (and Designated Individual, as applicable) in accordance with Article XII as a result of any act or decision concerning Company tax matters and within the scope of such Person’s responsibility as Tax Representative. All amounts indemnified may be advanced as incurred in accordance with Article XII. The Tax Representative (and Designated Individual, as applicable) shall be entitled to rely on the advice of outside legal counsel and accountants as to the nature and scope of such Person’s responsibilities and authority, and any act or omission of the Tax Representative pursuant to such advice in no event shall subject the Tax Representative to liability to the Company or any Member. (d) If the Company qualifies to elect pursuant to Code § 6221(b) (or successor provision) to have federal income tax audits and other proceedings undertaken by each Member rather than by the Company, the Company shall make such election. PAGE 37 OF 48 4840-1943-8017, v. 1 (e) Notwithstanding other provisions of this Agreement to the contrary, but subject to Section 10.01(f), if any “partnership adjustment” (as defined in Code § 6241(2)) is determined with respect to the Company, the Tax Representative, upon the determination of the Members in their sole discretion, will cause the Company to elect pursuant to Code § 6226 (the “push-out” election) to have any such adjustment passed through to the Members and former Members for the year to which the adjustment relates (i.e., the “reviewed year” within the meaning of Code § 6225(d)(1)). In the event that the Tax Representative has not caused the Company to so elect pursuant to Code § 6226, then any “imputed underpayment” (as determined in accordance with Code § 6225) or “partnership adjustment” that does not give rise to an “imputed underpayment” shall be apportioned among the Members and former Members of the Company in such manner as may be necessary (as determined by the Members in good faith) so that, to the maximum extent possible, the tax and economic consequences of the partnership adjustment and any associated interest and penalties are borne by the Members and former Members based upon their interests in the Company for the reviewed year. (f) Each Member and former Member agrees that, upon request of the Tax Representative, such Member shall: (i) provide any information and take such action as may be reasonably required by the Tax Representative in order to determine whether any “imputed underpayment” within the meaning of Code § 6225 may be modified pursuant to Code § 6225(c); (ii) file amended tax returns or effectuate the alternative “pull-in” procedure as provided in Code § 6225(c)(2) with respect to any “reviewed year” (within the meaning of Code § 6225(d)(1)) to reduce the amount of any “partnership adjustment” otherwise required to be taken into account by the Company; or (iii) in the event the Members do not fully or timely comply (in the Tax Representatives sole discretion) with the procedures of such Code § 6225(c)(2), take such actions as may be necessary or desirable (if any) to allow the Company to comply with the provisions of Code § 6226 (concerning the “push-out” election) so that any “partnership adjustments” are taken into account by the Members rather than the Company. (g) If the Company is obligated to pay any amount of tax, penalty, interest, or other charges determined under the Code (a “Company Level Tax”), each Member or former Member to which the assessment or payment relates (an “Indemnifying Member”) shall indemnify the Company for, and pay to the Company, the Indemnifying Member’s allocable share of the Company Level Tax. Each Indemnifying Member’s allocable share of the Company Level Tax shall be determined in good faith by the Board. Promptly upon notification by the Board of the Indemnifying Member’s obligation to indemnify the Company, an Indemnifying Member shall make a payment to the Company of immediately available funds, at the time and in the amount and manner directed by the Board. Amounts paid to the Company under this Section 10.01(g) by an Indemnifying Member who is not a Member of the Company at the time such payment is made shall not be treated as a Capital Contribution. (h) Each Member and former Member agrees that such Member shall not treat any Company item inconsistently on such Member’s federal, state, foreign, or other income tax return with the treatment of the item on the Company’s return. Any deficiency for taxes imposed on any Member or former Member (including penalties, additions to tax or interest imposed with PAGE 38 OF 48 4840-1943-8017, v. 1 respect to such taxes, and any taxes imposed pursuant to Code § 6226, as amended) shall be paid by such Member, and if paid by the Company will be recoverable from such Member. (i) The obligations of each Member or former Member under this Section 10.01 shall survive any actual or attempted Transfer, withdrawal or abandonment by such Member of its Transferable Interest and the termination of this Agreement or the dissolution of the Company. Section 10.02 Tax Returns; Tax Elections. (a) At the expense of the Company, the Board (or any Officer that it may designate pursuant to Section 7.09) shall endeavor to cause the preparation and timely filing (including extensions) of all tax returns required to be filed by the Company pursuant to the Code as well as all other required tax returns in each jurisdiction in which the Company owns property or does business. As soon as reasonably possible after the end of each Fiscal Year, the Board or designated Officer will cause to be delivered to each Person who was a Member at any time during such Fiscal Year, IRS Schedule K-1 to Form 1065 and such other information with respect to the Company as may be necessary for the preparation of such Person’s federal, state and local income tax returns for such Fiscal Year. (b) The Tax Representative with the consent of the Board shall make any and all elections for federal, state, local, or foreign tax purposes including without limitation any election, if permitted by Applicable Law: (i) to adjust the basis of property pursuant to Code §§ 734(b), 743(b) and 754, or comparable provisions of state, local or foreign law, in connection with Transfers of Units and Company distributions; (ii) to extend the statute of limitations for assessment of tax deficiencies against the Members with respect to adjustments to the Company’s federal, state, local or foreign tax returns; and (iii) to make all decisions on behalf of the Company and the Members and to direct the activities of the Tax Representative before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Members in their capacities as Members, and to direct the filing of any tax returns and to cause the execution of any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company and the Members. Section 10.03 Company Funds. All funds of the Company shall be deposited in its name, or in such name as may be designated by the Board, in such checking, savings or other accounts, or held in its name in the form of such other investments as shall be designated by the Board. The funds of the Company shall not be commingled with the funds of any other Person. All withdrawals of such deposits or liquidations of such investments by the Company shall be made exclusively upon the signature or signatures of the Board or such Officer or Officers as the Board may designate. PAGE 39 OF 48 4840-1943-8017, v. 1 ARTICLE XI DISSOLUTION AND LIQUIDATION Section 11.01 Events of Dissolution. The Company shall be dissolved and its affairs wound up only upon the occurrence of any of the following events: (a) The determination of one hundred percent (100%) of the Members holding Common Units to dissolve the Company; (b) At the election of the non-defaulting Member(s), in its/their sole discretion, if a Member breaches any material covenant, duty, or obligation under this Agreement, which breach remains uncured for fifteen (15) days after written notice of such breach was received by the defaulting Member; (c) The sale, exchange, involuntary conversion, or other disposition or Transfer of all or substantially all the assets of the Company; or (d) The entry of a decree of judicial dissolution under the LLC Act. Section 11.02 Effectiveness of Dissolution. Dissolution of the Company shall be effective on the day on which any event described in Section 11.01 occurs, but the Company shall not terminate until the winding up of the Company has been completed, the assets of the Company have been distributed as provided in Section 11.03 and the Articles of Organization shall have been cancelled as provided in Section 11.04. Section 11.03 Liquidation. If the Company is dissolved pursuant to Section 11.01, the Company shall be liquidated and its business and affairs wound up in accordance with the LLC Act and the following provisions: (a) Liquidator. The Board, or, if the Board is unable to do so, a Person selected by the holders of a majority of the Common Units, shall act as liquidator to wind up the Company (the “Liquidator”). Subject to a receiver or liquidating trustee being appointed by a court to wind up and liquidate the affairs of the Company, the Liquidator shall have full power and authority to sell, assign and encumber any or all of the Company’s assets and to wind up and liquidate the affairs of the Company in an orderly and business-like manner. (b) Accounting. As promptly as possible after dissolution and again after final liquidation, the Liquidator shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable. (c) Distribution of Proceeds. The Liquidator shall liquidate the assets of the Company and Distribute the proceeds of such liquidation in the following order of priority, unless otherwise required by mandatory provisions of Applicable Law: (i) First, to the payment of all of the Company’s debts and liabilities (including debts and liabilities (other than distributions) owed to Members who are PAGE 40 OF 48 4840-1943-8017, v. 1 creditors, if applicable) and the expenses of liquidation (including sales commissions incident to any sales of assets of the Company); (ii) Second, to the establishment of and additions to reserves that are determined by the Board in its sole discretion to be reasonably necessary for any contingent unforeseen liabilities or obligations of the Company; (iii) Third, to Members and former Members in satisfaction of liabilities for distributions; and (iv) Fourth, to the Members, on a pro rata basis, in accordance with the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments for the taxable year of the Company during which the liquidation of the Company occurs. (d) Discretion of Liquidator. Notwithstanding the provisions of Section 11.03(c) that require the liquidation of the assets of the Company, but subject to the order of priorities set forth in Section 11.03(c), if upon dissolution of the Company the Liquidator determines that an immediate sale of part or all of the Company’s assets would be impractical or could cause undue loss to the Members, the Liquidator may defer the liquidation of any assets except those necessary to satisfy Company liabilities and reserves, and may, in its absolute discretion, Distribute to the Members, in lieu of cash, as tenants in common and in accordance with the provisions of Section 11.03(c) and subject to compliance with Regulatory Laws, undivided interests in such Company assets as the Liquidator deems not suitable for liquidation. Any such Distribution in kind will be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operating of such properties at such time. For purposes of any such Distribution, the following rules shall be applied consistent with Treasury Regulations § 1.704 - 1(b)(2)(iv)(e): (i) any property to be Distributed will be valued at its Fair Market Value; (ii) the difference between the Fair Market Value of any asset to be Distributed in kind and its carrying value on the books of the Company shall be deemed to be gain or loss and any such deemed gain or loss shall be allocated in accordance with Article V; and (iii) all such allocations of gain or loss shall be credited or charged to the Members’ Capital Accounts prior to making such Distributions. Section 11.04 Cancellation of Articles. Upon completion of the Distribution of the assets of the Company as provided in Section 11.03(c) hereof, the Company shall be terminated and the Liquidator shall cause the cancellation of the Articles of Organization in the State of California and of all qualifications and registrations of the Company as a foreign limited liability company in jurisdictions other than the State of California and shall take such other actions as may be necessary to terminate the Company. Section 11.05 Survival of Rights, Duties and Obligations. Dissolution, liquidation, winding up or termination of the Company for any reason shall not release any party from any Loss which at the time of such dissolution, liquidation, winding up or termination already had accrued to any other party or which thereafter may accrue in respect of any act or omission prior to such dissolution, liquidation, winding up or termination. For the avoidance of doubt, none of PAGE 41 OF 48 4840-1943-8017, v. 1 the foregoing shall replace, diminish or otherwise adversely affect any Member’s right to indemnification pursuant to Section 12.03. Section 11.06 Resource for Claims. Each Member shall look solely to the assets of the Company for all Distributions with respect to the Company, such Member’s Capital Account, and such Member’s share of Net Income, Net Loss and other items of income, gain, loss and deduction, and shall have no recourse therefor (upon dissolution or otherwise) against the Board, the Liquidator or any other Member. ARTICLE XII EXCULPATION AND INDEMNIFICATION Section 12.01 Exculpation of Covered Persons. (a) Covered Persons. As used herein, the term “Covered Person” shall mean: (i) each Member; (ii) each officer, director, shareholder, partner, member, controlling Affiliate, employee, agent or representative of each Member, and each of their controlling Affiliates ; and (iii) each Manager, Officer, employee, agent or Representative of the Company. (b) Standard of Care. No Covered Person shall be liable to the Company or any other Covered Person for any loss, damage or claim incurred by reason of any action taken or omitted to be taken by such Covered Person in good-faith reliance on the provisions of this Agreement, so long as such action or omission does not constitute fraud or willful misconduct by such Covered Person. (c) Good Faith Reliance. A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements (including financial statements and information, opinions, reports or statements as to the value or amount of the assets, liabilities, Net Income or Net Losses of the Company or any facts pertinent to the existence and amount of assets from which Distributions might properly be paid) of the following Persons or groups: (i) another Manager; (ii) one (1) or more Officers or employees of the Company; (iii) any attorney, independent accountant, appraiser or other expert or professional employed or engaged by or on behalf of the Company; or (iv) any other Person selected in good faith by or on behalf of the Company, in each case as to matters that such relying Person reasonably believes to be within such other Person’s professional or expert competence. Section 12.02 Liabilities and Duties of Covered Persons. (a) Limitation of Liability. This Agreement is not intended to, and does not, create or impose any fiduciary duty on any Covered Person. Furthermore, to the fullest extent permitted by Applicable Law, each of the Members and the Company hereby waives any and all fiduciary duties that, absent such waiver, may be implied by Applicable Law, and in doing so, acknowledges and agrees that the duties and obligation of each Covered Person to each other and to the Company are only as expressly set forth in this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person. PAGE 42 OF 48 4840-1943-8017, v. 1 (b) Duties. Whenever in this Agreement a Covered Person is permitted or required to make a decision (including a decision that is in such Covered Person’s “discretion” or under a grant of similar authority or latitude), the Covered Person shall be entitled to consider only such interests and factors as such Covered Person desires, including its/their own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person. Whenever in this Agreement a Covered Person is permitted or required to make a decision in such Covered Person’s “good faith,” the Covered Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or any other Applicable Law. Section 12.03 Indemnification. (a) Indemnification. to the fullest extent permitted under the LLC Act (after waiving all the LLC Act restrictions on indemnification other than those which cannot be eliminated under the LLC Act), as the same now exists or may hereafter be amended, substituted or replaced the Company shall indemnify, hold harmless, defend, pay and reimburse any Covered Person against any and all losses, claims, damages, judgments, fines or liabilities, including reasonable legal fees or other expenses incurred in investigating or defending against such losses, claims, damages, judgments, fines or liabilities, and any amounts expended in settlement of any claims (collectively, “Losses”) to which such Covered Person may become subject by reason of: (i) Any act or omission, or alleged act or omission, performed, or omitted to be performed, on behalf of the Company, any Member or any d irect or indirect Subsidiary of the foregoing in connection with the business of the Company; or (ii) The fact that such Covered Person is or was acting in connection with the business of the Company as a partner, Member, stockholder, controlling Affiliate, Manager, director, Officer, employee or agent of the Company, any Member, or any of their respective controlling Affiliates, or that such Covered Person is or was serving at the request of the Company as a partner, member, manager, director, officer, employee or agent of any Person including the Company; provided, however, that such Loss did not arise from: (A) the Covered Person's conduct involving bad faith, willful or intentional misconduct, or a knowing violation of law (other than the Federal Cannabis Laws); (B) a transaction from which such Covered Person derived an improper personal benefit; (C) a circumstance under which the liability provisions for improper distributions of the LLC Act are applicable, or (D) a breach of such Covered Person's duties or obligations under the LLC Act (taking into account any restriction, expansion, or elimination of such duties and obligations provided for in this Agreement). In connection with the foregoing, the termination of any action, suit, or proceeding b y judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Covered Person acted in bad faith, that the Covered Person's conduct constituted willful or intentional misconduct or a knowing violation of law, or that the Covered Person derived an improper personal benefit. PAGE 43 OF 48 4840-1943-8017, v. 1 (b) Reimbursement. The Company shall promptly reimburse (and/or advance to the extent reasonably required) each Covered Person for reasonable legal or other expenses (as incurred) of such Covered Person in connection with investigating, preparing to defend or defending any claim, lawsuit or other proceeding relating to any Losses for which such Covered Person may be indemnified pursuant to this Section 12.03; provided, however, that if it is finally judicially determined that such Covered Person is not entitled to the indemnification provided by this Section 12.03, then such Covered Person shall promptly reimburse the Company for any reimbursed or advanced expenses. (c) Entitlement to Indemnity. The indemnification provided by this Section 12.03 shall not be deemed exclusive of any other rights to indemnification to which those seeking indemnification may be entitled under any agreement or otherwise. The provisions of this Section 12.03 shall continue to afford protection to each Covered Person regardless of whether such Covered Person remains in the position or capacity pursuant to which such Covered Person became entitled to indemnification under this Section 12.03 and shall inure to the benefit of the executors, administrators, legatees and distributees of such Covered Person. (d) Insurance. To the extent available on commercially reasonable terms, the Company may purchase, at its expense, insurance to cover Losses covered by the forego ing indemnification provisions and to otherwise cover Losses for any breach or alleged breach by any Covered Person of such Covered Person’s duties in such amount and with such deductibles as the Board may determine; provided, however, that the failure to obtain such insurance shall not affect the right to indemnification of any Covered Person under the indemnification provisions contained herein, including the right to be reimbursed or advanced expenses or otherwise indemnified for Losses hereunder. If any Covered Person recovers any amounts in respect of any Losses from any insurance coverage, then such Covered Person shall, to the extent that such recovery is duplicative, reimburse the Company for any amounts previously paid to such Covered Person by the Company in respect of such Losses. (e) Funding of Indemnification Obligation. Notwithstanding anything contained herein to the contrary, any indemnity by the Company relating to the matters covered in this Section 12.03 shall be provided out of and to the extent of Company assets only, and no Member (unless such Member otherwise agrees in writing) shall have personal liability on account thereof or shall be required to make additional Capital Contributions to help satisfy such indemnity by the Company. (f) Savings Clause. If this Section 12.03 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Covered Person pursuant to this Section 12.03 to the fullest extent permitted by any applicable portion of this Section 12.03 that shall not have been invalidated and to the fullest extent permitted by Applicable Law. (g) Amendment. The provisions of this Section 12.03 shall be a contract between the Company, on the one hand, and each Covered Person who served in such capacity at any time while this Section 12.03 is in effect, on the other hand, pursuant to which the Company PAGE 44 OF 48 4840-1943-8017, v. 1 and each such Covered Person intend to be legally bound. No amendment, modification or repeal of this Section 12.03 that adversely affects the rights of a Covered Person to indemnification for Losses incurred or relating to a state of facts existing prior to such amendment, modification or repeal shall apply in such a way as to eliminate or reduce such Covered Person’s entitlement to indemnification for such Losses without the Covered Person’s prior written consent. (h) Survival. The provisions of this Article XII shall survive the dissolution, liquidation, winding up and termination of the Company. ARTICLE XIII MISCELLANEOUS Section 13.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with the preparation and execution of this Agreement, or any amendment or waiver hereof, and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. Section 13.02 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, the Company and each Member hereby agrees, at the request of the Company or any other Member, to execute and deliver such additional documents, instruments, conveyances and assurances and to take such further actions as may be required to carry out the provisions hereof and give effect to the transactions contemplated hereby. Section 13.03 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 13.03): If to the Company: 4675 McArthur Court, Floor 15 Newport Beach, California 92660 E-mail: ryan@cookiesre.com; bj@cookiesre.com Attention: Ryan Johnson and Brandon Johnson with a copy to: Vicente Sederberg LLP 633 West 5th Street, Floor 26 Los Angeles, CA 90071 PAGE 45 OF 48 4840-1943-8017, v. 1 E-mail: Sahar@vicentesederberg.com Attention: Sahar Ayinehsazian, Esq. with an additional copy to: Cookies Retail LLC 4675 McArthur Court, Floor 15 Newport Beach, California 92660 E-mail: ryan@cookiesre.com; bj@cookiesre.com Attention: Ryan Johnson and Brandon Johnson If to a Member, to such Member’s respective mailing address as set forth on the Members Schedule. Section 13.04 Interpretation; Headings. For purposes of this Agreement: (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. The definitions given for any defined terms in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless the context otherwise requires, references herein: (i) to Articles, Sections, Schedules, Annexes and Exhibits mean the Articles and Sections of, and Schedules, Annexes and Exhibits attached to, this Agreement; (ii) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (iii) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Schedules, Annexes and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The headings in this Agreement are inserted for convenience or reference only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision of this Agreement. Section 13.05 Severability. If any term or provision of this Agreement is held to be invalid, illegal or unenforceable under Applicable Law in any jurisdiction or by any Regulatory Authority, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. Section 13.06 Entire Agreement. This Agreement, together with the Articles of Organization, any agreement to acquire Units, and all related Schedules, Annexes and Exhibits, PAGE 46 OF 48 4840-1943-8017, v. 1 constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. Section 13.07 Successors and Assigns. Subject to the restrictions on Transfers set forth herein, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. Section 13.08 No Third-party Beneficiaries. Except as provided in Article XII which shall be for the benefit of and enforceable by Covered Persons as described therein, this Agreement is for the sole benefit of the parties hereto (and their respective heirs, executors, administrators, successors and assigns) and nothing herein, express or implied, is intended to or shall confer upon any other Person, including any creditor of the Company, any legal or equ itable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Section 13.09 Amendment. Subject to Section 7, no provision of this Agreement may be amended or modified except by an instrument in writing executed by the Company and Members holding at least fifty-one percent (51%) of the issued and outstanding Common Units, which must include CR. Any such written amendment or modification will be binding upon the Company and each Member. Notwithstanding the foregoing, amendments to the Members Schedule following any new issuance, redemption, repurchase or Transfer of Units in accordance with this Agreement may be made by the Board without the consent of or execution by the Members. Section 13.10 Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. For the avoidance of doubt, nothing contained in this Section 13.10 shall diminish any of the explicit and implicit waivers described in this Agreement. Section 13.11 Governing Law. This Agreement and all related documents and all matters arising out of or relating to this Agreement, whether sounding in contract, tort, or statute are governed by, and construed in accordance with, the laws of the State of California, without giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of California. Section 13.12 Dispute Resolution. In the event of any dispute, claim or controversy arising out of or relating to this Agreement, the parties shall first attempt in good faith to resolve their dispute through in-person negotiation between authorized representatives of each of the parties with authority to settle the relevant dispute. Either party may commence this negotiation by delivering written notice to the other party pursuant to the terms outlined in this Agreement. PAGE 47 OF 48 4840-1943-8017, v. 1 The parties may agree to engage the services of a jointly agreed-upon mediator to facilitate this in- person meeting, in which case they agree to share equally in the costs of the mediation. If the dispute cannot be settled amicably within fourteen (14) days of delivery of written notice or the in-person meeting of authorized representatives, whichever comes later, then the dispute shall be resolved by binding arbitration as provided in Section 13.14. Section 13.13 Binding Arbitration. Any dispute, controversy, or claim arising out of or relating to this Agreement, including any determination of the scope or applicability of this Section, shall be finally settled by arbitration and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The Parties shall share the costs of the arbitration equally; provided, however, that each Party shall be responsible for its own attorneys’ fees and other costs and expenses. The arbitration will be conducted in the English language, in Orange County, California by a single arbitrator jointly selected by the parties. If the parties are unable to agree upon an arbitrator within thirty (30) days of delivery of the notice of arbitration, they agree to use the American Arbitration Association as an appointing authority. The arbitrator shall have the power to grant legal and equitable remedies, including awarding the prevailing party its attorneys’ fees and other costs of the arbitration, but they shall not grant punitive damages. TO THE EXTENT FEDERAL AND STATE LAW CONFLICT AS REGARDS TO THIS CONTRACT, STATE LAW SHALL APPLY. Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties. The arbitrator shall issue an award in this dispute within one year of their appointment. The award shall be final and binding upon all parties as from the date rendered and shall be the sole and exclusive remedy between the parties regarding any claims, counterclaims, issues, or accounting presented to the arbitral tribunal. THE PARTIES ACKNOWLEDGE THAT THEY ARE IRREVOCABLY WAIVING THE RIGHT TO A TRIAL IN COURT, INCLUDING A TRIAL BY JURY AND THAT ALL RIGHTS AND REMEDIES WILL BE DETERMINED BY AN ARBITRATOR AND NOT BY A JUDGE OR JURY. Section 13.14 Equitable Remedies. Each party hereto acknowledges that a breach or threatened breach by such party of any of its obligations under this Agreement would give rise to irreparable harm to the other parties, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, each of the other parties hereto shall, in addition to any and all other rights and remedies that may be available to them in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performanc e and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond). Section 13.15 Attorneys’ Fees. In the event that any party hereto institutes any legal suit, action or proceeding, including arbitration, against another party in respect of a matter arising out of or relating to this Agreement, the prevailing party in the suit, action or proceeding shall be entitled to receive, in addition to all other damages to which it may be entitled, the costs incurred by such party in conducting the suit, action or proceeding, including reasonable attorneys’ fees and expenses and court costs. PAGE 48 OF 48 4840-1943-8017, v. 1 Section 13.16 Remedies Cumulative. The rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise, except to the extent expressly provided in Section 12.02 to the contrary. Section 13.17 Federal Cannabis Laws. The parties hereto agree and acknowledge that no party makes, will make, or shall be deemed to make or have made any representation or warranty of any kind regarding the compliance of this Agreement with any Federal Cannabis Laws. No party hereto shall have any right of rescission or amendment, or shall bring any legal claim, counter-claim or defense arising out of or relating to any non-compliance with Federal Cannabis Laws unless such non-compliance also constitutes a violation of Regulatory Laws or this Agreement, and no Party shall seek to enforce the provisions hereof in federal court. Section 13.18 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. Section 13.19 City Requirements. To the extent that any provision of this Agreement, or any part thereof, is or may be construed to be inconsistent with or in violation of the City’s “Equity Share” requirement, such provision(s) shall be ineffective, unenforceable, and null and void. [SIGNATURE PAGE FOLLOWS] EXECUTION COPY IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. COMPANY: 1261 Wishon OPCO, LLC By: Name: Brandon Johnson Title: Manager The Members: Cookies Retail LLC By: ___________________________________ Name: Brandon Johnson Its: Manager Title: Member Kacey Auston By: Name: Kacey Auston Title: Member EXECUTION COPY IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. COMPANY: 1261 Wishon OPCO, LLC By: Name: Brandon Johnson Title: Manager The Members: Cookies Retail LLC By: ___________________________________ Name: Brandon Johnson Its: Manager Title: Member Kacey Auston By: Name: Kacey Auston Title: Member SCHEDULE A – MEMBERS’ SCHEDULE SCHEDULE A MEMBERS SCHEDULE Member Name and Address Common Units Capital Contributions Cookies Retail LLC 4675 McArthur Court, Floor 15 Newport Beach, California 92660 490 Kacey Auston Ave 1271 North Wishon Fresno, CA 93728 510 Total: 1000 ANNEX 1 DEFINED TERMS “Additional Capital” has the meaning set forth in Section 4.02(c). “Adjusted Capital Account” means the balance in the Capital Account maintained for each Member as of the end of each Fiscal Year: (a) increased by any amount that such Member is obligated to restore under this Agreement, is treated as obligated to restore under Treasury Regulations § 1.704-1(b)(2)(ii)(c), or is deemed obligated to restore under the penultimate sentences of Treasury Regulations §§ 1.704-2(g)(1) and (i)(5); and (b) reduced by the items described in Treasury Regulations §§ 1.704-1(b)(2)(ii)(d)(4), (5) and (6). This definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulations § 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied consistently therewith. “Adjusted Taxable Income” of a Member for a Fiscal Year (or portion thereof) with respect to Units held by such Member means the federal taxable income allocated by the Company to the Member with respect to such Units (as adjusted by any final determination in connection with any tax audit or other proceeding) for such Fiscal Year (or portion thereof); provided, however, that such taxable income shall be computed: (a) minus any excess taxable loss or excess taxable credits of the Company for any prior period allocable to such Member with respect to such Units that were not previously taken into account for purposes of determining such Member’s Adjusted Taxable Income in a prior Fiscal Year to the extent such loss or credit would be available under the Code to offset income of the Member (or, as appropriate, the direct or indirect members of the Member) determined as if the income, loss and credits from the Company were the only income, loss and credits of the Member (or, as appropriate, the direct or indirect members of the Member) in such Fiscal Year and all prior Fiscal Years; and (b) taking into account any special basis adjustment with respect to such Member resulting from an election by the Company under Code § 754. “Affected Person” means any Member, or any elected or appointed or current manager or officer of the Company, who either (i) in the good faith determination of the Disinterested Managers, or if there are no Disinterested Managers the Disinterested Members, or (ii) by a determination (whether or not such determination is final, binding or non-appealable) by any Regulatory Authority: (a) has breached any Regulatory Laws, the condition of any Regulatory Authority, or the conditions of any Regulatory Licenses; (b) is not suitable, eligible or otherwise qualified with respect to (1) ay Regulated Activities, (2) any Regulatory Licenses or (3) owning or controlling any Units or its position as a manager of officer of the Company, as applicable; (c) fails to be found suitable, eligible or otherwise qualified with respect to (1) any Regulated Activities, (2) any Regulatory Licenses or (3) owning or controlling any Units or its position as a manager of officer of the Company, as applicable pursuant to any Regulatory Laws (including by the applicable Regulatory Authority); provided, however, such failure, in the good faith determination of The Disinterested Managers, or if there are no Disinterested Managers, the ANNEX 1 – DEFINED TERMS PAGE 2 OF 12 4840-1943-8017, v. 1 Disinterested Members, precludes or materially delays, jeopardizes, impedes or impairs, or imposes materially burdensome terms and condition on, the ability of the Company or any of its subsidiaries to conduct any Regulated Activities or to obtain, retain, renew or reinstate any Regulatory License; (d) causes, or would reasonably likely to cause, any Regulatory License to be lost, rejected, rescinded, suspended, revoked, not renewed or not reinstated by any Regulatory Authority; or (e) is otherwise reasonably likely to preclude or materially delay, jeopardize, impede or impair, or impose materially burdensome terms and conditions on, the ability of the Company or any of its subsidiaries to conduct any Regulated Activities or to obtain, retain, renew or reinstate any Regulatory License. “Affiliate” means, with respect to any Person, any other Person who, directly or indirectly (including through one (1) or more intermediaries), controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control,” when used with respect to any specified Person, shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or partnership or other ownership interests, by contract or otherwise; and the terms “controlling” and “controlled” shall have correlative meanings. “Agreement” has the meaning set forth in the preamble hereof. “Applicable Law” means all Regulatory Laws and applicable provisions of: (a) constitutions, treaties, statutes, laws (including the common law), rules, regulations, decrees, ordinances, codes, proclamations, declarations or orders of any Governmental Authority; (b) any consents or approvals of any Governmental Authority; and (c) any orders, decisions, advisory or interpretative opinions, injunctions, judgments, awards, decrees of, or agreements with, any Governmental Authority; provided, however, that Applicable Law shall exclude the Federal Cannabis Laws. “Articles of Organization” has the meaning set forth in the Recitals. “Available Common Units” has the meaning set forth in Section 8.05(b). “Bankruptcy” means, with respect to a Member, the occurrence of any of the following: (a) the filing of an application by such Member for, or a consent to, the appointment of a trustee of such Member’s assets; (b) the filing by such Member of a voluntary petition in bankruptcy or the filing of a pleading in any court of record admitting in writing such Member’s inability to pay its debts as they come due; (c) the making by such Member of a general assignment for the benefit of such Member’s creditors; (d) the filing by such Member of an answer admitting the material allegations of, or such Member’s consenting to, or defaulting in answering a bankruptcy petition filed against such Member in any bankruptcy proceeding; or (e) the expiration of sixty (60) days following the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such Member a bankrupt or appointing a trustee of such Member’s assets. ANNEX 1 – DEFINED TERMS PAGE 3 OF 12 4840-1943-8017, v. 1 “Board” has the meaning set forth in Section 7.01. “Book Depreciation” means, with respect to any Company asset for each Fiscal Year, the Company’s depreciation, amortization, or other cost recovery deductions determined for federal income tax purposes, except that if the Book Value of an asset differs from its adjusted tax basis at the beginning of such Fiscal Year, Book Depreciation shall be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero (0) and the Book Value of the asset is positive, Book Depreciation shall be determined with reference to such beginning Book Value using any permitted method selected by the Board in accordance with Treasury Regulations § 1.704-1(b)(2)(iv)(g)(3). “Book Value” means, with respect to any Company asset, the adjusted basis of such asset for federal income tax purposes, except as follows: (a) the initial Book Value of any Company asset contributed by a Member to the Company shall be the gross Fair Market Value of each such Company asset as of the date of such contribution; (b) immediately prior to the Distribution by the Company of any Company asset to a Member, the Book Value of such asset shall be adjusted to its gross Fair Market Value as of the date of such Distribution; (c) the Book Value of all Company assets shall be adjusted to equal their respective gross Fair Market Values, as determined by the Board, as of the following times: (i) the acquisition of an additional Membership Interest in the Company by a new or existing Member in consideration of a Capital Contribution of more than a de minimis amount; (ii) the acquisition of a Membership Interest in the Company by a new or existing Member in consideration of services to or on behalf of the Company; (iii) the Distribution by the Company to a Member of more than a de minimis amount of property (other than cash) as consideration for all or a part of such Member’s Membership Interest in the Company; or (iv) the liquidation of the Company within the meaning of Treasury Regulations § 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (i), (ii), and (iii) above need not be made if the Board reasonably determines that such adjustment is not necessary or appropriate to reflect the relative economic interests of the Members and that the absence of such adjustment does not adversely and disproportionately affect any Board; and provided, further, the Book Values of the Company’s assets shall be adjusted to equal their respective gross Fair Market Values, as determined by the Board, as of the following times: (x) in connection with the issuance by the ANNEX 1 – DEFINED TERMS PAGE 4 OF 12 4840-1943-8017, v. 1 Company of a “noncompensatory option” within the meaning of Treasury Regulations §§ 1.721- 2(f) and 1.761-3(a) other than for a de minimis Membership Interest; and (y) immediately after the exercise of any noncompensatory option in accordance with Treasury Regulations § 1.704- 1(b)(2)(iv)(s); provided, however, that the adjustment resulting from the event described in clause (x) above shall be made only if the Members reasonably determine that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. If any noncompensatory options are outstanding upon an adjustment to the capital accounts pursuant to this paragraph, the Company shall adjust the Book Values of the Company’s assets as determined for purposes of maintaining the Capital Accounts in accordance with Treasury Regulations §§ 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2). (d) the Book Value of each Company asset shall be increased or decreased, as the case may be, to reflect any adjustments to the adjusted tax basis of such Company asset pursuant to Code § 734(b) or Code § 743(b), but only to the extent that such adjustments are taken into account in determining Capital Account balances pursuant to Treasury Regulations § 1.704-1(b)(2)(iv)(m); provided, however, that Book Values shall not be adjusted pursuant to this paragraph (d) to the extent that an adjustment pursuant to the above paragraph (c) above is made in conjunction with a transaction that would otherwise result in an adjustment pursuant to this paragraph (d); and (e) if the Book Value of a Company asset has been determined pursuant to the above paragraph (a) or adjusted pursuant to the above paragraphs (c) or (d), such Book Value shall thereafter be adjusted to reflect the Book Depreciation taken into account with respect to such Company asset for purposes of computing Net Income and Net Losses. “Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in the State of California are authorized or required to close. “Capital Account” has the meaning set forth in Section 4.03. “Capital Contribution” means, for any Member, the total amount of cash and cash equivalents and the initial Book Value of any property (net of liabilities assumed by the Company resulting from such contribution and liabilities to which the property is subject) contributed, or deemed contributed, as applicable, to the capital of the Company by such Member (excluding any advances or loans of Members), each as determined and updated from time-to-time by the Board. “Change of Control” means: (a) the sale of all or substantially all of the consolidated assets of the Company to a Third Party Purchaser; (b) a sale resulting in no less than a majority of the Units on a Fully Diluted Basis being held by a Third Party Purchaser; or (c) a merger, consolidation, recapitalization, or reorganization of the Company with or into a Third Party Purchaser that results in the inability of the Members to designate or elect a majority of the Managers (or the board of directors (or its equivalent) of the resulting entity or its parent company). “City” means the City of Fresno. “Code” means the Internal Revenue Code of 1986, as amended. ANNEX 1 – DEFINED TERMS PAGE 5 OF 12 4840-1943-8017, v. 1 “Common Units” means the Units having the privileges, preference, duties, liabilities, obligations and rights specified with respect to “common units” in this Agreement. “Company” has the meaning set forth in the preamble hereof. “Company Interest Rate” means a rate equal to the prime rate of interest published in the Wall Street Journal on the applicable date, plus two percent (2%). “Company Level Tax” has the meaning set forth in Section 10.01(g). “Company Minimum Gain” means “partnership minimum gain” as defined in Treasury Regulations § 1.704-2(b)(2), substituting the term “Company” for the term “partnership” as the context requires. “Confidential Information” has the meaning set forth in Section 9.01. “CR” means Cookies Retail LLC. “CR ROFR Election” has the meaning set forth in Section 8.05(a). “CR ROFR Period” has the meaning set forth in Section 8.05(a). “Covered Person” has the meaning set forth in Section 12.01(a). “Deemed Liquidation Event” means each of the following events: (a) a merger on consolidation in which: (i) the Company is a constituent party and the Company issues Units pursuant to such merger or consolidation; provided, however any such merger or consolidation involving the Company in which the Units of the Company outstanding immediately prior to such merger or consolidation continue to represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity of: (x) the surviving or resulting entity; or (y) if the surviving or resulting entity is a wholly owned subsidiary of another entity immediately following such merger or consolidation, the parent entity of such surviving or resulting entity; (b) the sale, lease, transfer, exclusive license, or other disposition, in a single transaction or series of related transactions, by the Company of all or substantially all the assets of the Company (including, without limitation, the Regulatory Licenses of the Company); or (c) a transaction or series of transactions that otherwise results in a Change of Control. “Deemed Liquidation Event Proceeds” means the proceeds of the Company from a Deemed Liquidation Event, reduced by: (a) all expenses associated with such transaction (including investment banking fees, attorneys fees, and other professional advisor fees); (b) all payments of principal, interest, and other charges in respect of any indebtedness refinanced and any other indebtedness discharged with such proceeds (including with respect to any Members loans); and (c) all reasonable reserves required by the Company as reasonably determined by the Board with respect to such Deemed Liquidation Event or to wind-up the Company. ANNEX 1 – DEFINED TERMS PAGE 6 OF 12 4840-1943-8017, v. 1 “Disinterested Managers” means, with respect to any person or entity, those managers of the Company that have no material direct or indirect financial interest in or with respect to such person or entity. For the avoidance of doubt, any manager of the Company that is designated to such position by any person or entity, or is an officer, director, employee or is otherwise engaged by such person or entity, shall not be deemed a Disinterested Manager with respect to such person or entity. “Disinterested Members” means, with respect to any person or entity, those members of the Company that have no material direct or indirect financial interest in or with respect to such person or entity. For the avoidance of doubt, any manager of the Company that is designated to such position by any person or entity, or is an officer, director, employee or is otherwise engaged by such person or entity, shall not be deemed a Disinterested Member with respect to such person or entity. “Distribution” means a distribution made by the Company to a Member, whether in cash, property, or securities of the Company and whether by liquidating distribution or otherwise; provided, however that none of the following shall be a Distribution: (a) any redemption or repurchase by the Company or any Member of any Units or Unit Equivalents; (b) any recapitalization or exchange of securities of the Company; or (c) any subdivision (by a split of Units or otherwise) or any combination (by a reverse split of Units or otherwise) of any outstanding Units. “Distribute” when used as a verb shall have a correlative meaning. “Drag-along Member” has the meaning set forth in Section 8.03(a). “Drag-along Notice” has the meaning set forth in Section 8.03(c). “Drag-along Sale” has the meaning set forth in Section 8.03(a). “Dragging Member” has the meaning set forth in Section 8.03(a). “Electronic Transmission” means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process. “Estimated Tax Amount” of a Member for a Fiscal Year means the Member’s Tax Amount for such Fiscal Year as estimated in good faith from time-to-time by the Board. In making such estimate, the Board shall take into account amounts shown on Internal Revenue Service Form 1065 filed by the Company and similar state or local forms filed by the Company for the preceding taxable year and such other adjustments as in the reasonable business judgment of the Board are necessary or appropriate to reflect the estimated operations of the Company for the Fiscal Year. “Excess Amount” has the meaning set forth in Section 6.03(c). “Fair Market Value” of any asset as of any date means the purchase price that a willing buyer having all relevant knowledge would pay a willing seller for such asset in an arm’s length transaction, as determined in good faith by the Board based on such factors as the Board, in the exercise of their reasonable business judgment, consider relevant. ANNEX 1 – DEFINED TERMS PAGE 7 OF 12 4840-1943-8017, v. 1 “Financing Document” means any credit agreement, guarantee, financing or security agreement, or other agreements or instruments governing indebtedness of the Company. “Family Members” means the spouse, parents, siblings, descendants, (including adoptive relationships and stepchildren) and the spouses of each such natural person. “Federal Cannabis Laws” means any U.S. federal laws, civil, criminal or otherwise, as such relate, either directly or indirectly, to the cultivation, harvesting, manufacturing, production, marketing, commercialization, distribution, transfer sale and/or possession of cannabis or related substances, or products, activities or services containing or relating to the same, including, without limitation, the prohibition on drug trafficking under 21 U.S.C. Ch. 13, et seq., the conspiracy statute under 18 U.S.C. § 846, the bar against aiding and abetting the conduct of an offense under 18 U.S.C. § 2, the bar against misprision of a felony (concealing another’s felonious conduct) under 18 U.S.C. § 4, the bar against being an accessory after the fact to criminal conduct under 18 U.S.C. § 3, and federal money laundering statutes under 18 U.S.C. §§ 1956, 1957, and 1960 , and any other U.S. federal law the violation of which is predicated on the violation of any of the foregoing as it applies to the cultivation, harvesting, manufacturing, production, marketing, commercialization, distribution, transfer sale and/or possession of cannabis or related substances, or products, activities or services containing or relating to the same, and all orders, decrees, rules and regulations promulgated under any of the foregoing. “Fiscal Year” means the calendar year, unless the Company is required to have a taxable year other than the calendar year, in which case Fiscal Year shall be the period that conforms to its taxable year. “Forfeiture Allocations” has the meaning set forth in Section 5.02(f). “Fully Diluted Basis” means, as of any date of determination: (a) with respect to all the Units, all issued and outstanding Units of the Company and all Units issuable upon the exercise of any outstanding Unit Equivalents as of such date, whether or not such Unit Equivalent is at the time exercisable; or (b) with respect to any specified type, class, or series of Units, all issued and outstanding Units designated as such type, class, or series and all such designated Units issuable upon the exercise of any outstanding Unit Equivalents as of such date, whether or not such Unit Equivalent is at the time exercisable. “GAAP” means United States generally accepted accounting principles in effect from time- to-time. “Governmental Authority” means any federal, state, local, or foreign government or any court of competent jurisdiction, administrative or regulatory body, agency, bureau, or commission or other governmental entity or instrumentality in any domestic or foreign jurisdiction, and any appropriate division or any of the foregoing (to the extent that the rules, regulations, or orders thereof have the force of law). For the avoidance of doubt, Governmental Entity includes any Regulatory Authority. “Indemnifying Member” has the meaning set forth in Section 10.01(g). ANNEX 1 – DEFINED TERMS PAGE 8 OF 12 4840-1943-8017, v. 1 “Joinder Agreement” means the joinder agreement in form attached hereto as Exhibit A. “Liquidator” has the meaning set forth in Section 11.03(a). “LLC Act” has the meaning set forth in the preamble. “Losses” has the meaning set forth in Section 12.03(a). “Majority Unitholders” means Members holding greater than fifty percent (50%) of the Membership Interests. “Manager” has the meaning set forth in Section 7.01. “Member” means: (a) each Person identified on the Members Schedule as of the date hereof as a Member and who has executed this Agreement or a counterpart thereof; and (b) each Perso n who is hereafter admitted as a Member in accordance with the terms of this Agreement in each case so long as such Person is shown on the Company’s books and records as the owner of one (1) or more Units. The Members shall constitute the “members” of the Company. “Member Nonrecourse Debt” means “partner nonrecourse debt” as defined in Treasury Regulations § 1.704-2(b)(4), substituting the term “Company” for the term “partnership” and the term “Member” for the term “partner” as the context requires. “Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if the Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations § 1.704-2(i)(3). “Member Nonrecourse Deduction” means “partner nonrecourse deduction” as defined in Treasury Regulations § 1.704-2(i), substituting the term “Member” for the term “partner” as the context requires. “Member Parties” has the meaning set for in Section 1.09(b). “Members Schedule” has the meaning set forth in the Preamble. “Membership Interest” means an interest in the Company owned by a Member, including such Member’s right (based on the type and class of Unit or Units held by such Member), as applicable: (a) to a distributive share of Net Income, Net Losses, and other items of income, gain, loss, and deduction of the Company, in accordance with this Agreement; (b) to a Distribution in accordance with this Agreement; (c) to vote on, consent to, or otherwise participate in any decision of the Members as provided in this Agreement; and (d) to any and all other benefits to which such Member may be entitled as provided in this Agreement. “Misallocated Item” has the meaning set forth in Section 5.05. “Net Income” and “Net Loss” mean, for each Fiscal Year or other period specified in this Agreement, an amount equal to the Company’s taxable income or taxable loss, or particular items thereof, determined in accordance with Code § 703(a) (where, for this purpose, all items of income, ANNEX 1 – DEFINED TERMS PAGE 9 OF 12 4840-1943-8017, v. 1 gain, loss, or deduction required to be stated separately pursuant to Code § 703(a)(1) shall be included in taxable income or taxable loss), but with the following adjustments: (f) any income realized by the Company that is exempt from federal income taxation, as described in Code § 705(a)(1)(B), shall be added to such taxable income or taxable loss, notwithstanding that such income is not includable in gross income; (g) any expenditures of the Company described in Code § 705(a)(2)(B), including any items treated under Treasury Regulations § 1.704-1(b)(2)(iv)(i) as items described in Code § 705(a)(2)(B), shall be subtracted from such taxable income or taxable loss, notwithstanding that such expenditures are not deductible for federal income tax purposes; (h) any gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property so disposed, notwithstanding that the adjusted tax basis of such property differs from its Book Value; (i) any items of depreciation, amortization, and other cost recovery deductions with respect to Company property having a Book Value that differs from its adjusted tax basis shall be computed by reference to the property’s Book Value (as adjusted for Book Depreciation) in accordance with Treasury Regulations § 1.704-1(b)(2)(iv)(g); (j) if the Book Value of any Company property is adjusted as provided in the definition of Book Value, then the amount of such adjustment shall be treated as an item of gain or loss and included in the computation of such taxable income or taxable loss; and (k) to the extent an adjustment to the adjusted tax basis of any Company property pursuant to Code §§ 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulations § 1.704 1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis). “New Interests” means (i) any new type, class or series of Units not otherwise described in this Agreement, which Units may be designated as classes or series of the Common Units but having different rights; and (ii) Unit Equivalents. “Non-Transferring Member” has the meaning set forth in Section 8.05(b). “Nonrecourse Liability” has the meaning set forth in Treasury Regulations § 1.704-2(b)(3). “Officers” has the meaning set forth in Section 7.09. “Partnership Tax Audit Rules” means Code §§ 6221 through 6241, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder (including Treasury Regulations promulgated pursuant thereto) or successor provisions and any similar provision of state or local tax laws. ANNEX 1 – DEFINED TERMS PAGE 10 OF 12 4840-1943-8017, v. 1 “Preferred Return” shall mean the amount of Distributions necessary to provide a return of fifteen percent (15%) per annum on the Unreturned Additional Capital of a Member. The Preferred Return shall be a cumulative, non-compounding, annually-calculated return. “Permitted Transfer” means a Transfer of Units carried out pursuant to Section 8.02. “Permitted Transferee” means a recipient of a Permitted Transfer. “Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity. “Pro Rata Portion” means a fraction determined by dividing: (a) the number of Common Units on a Fully Diluted Basis owned by such Member immediately prior to the applicable issuance or transfer, as applicable; by (b) the total number of Common Units on a Fully Diluted Basis held by the Members on such date. “Profits Interest Hurdle” shall have the meaning set forth in Section 6.07(b). “Profits Interest Members” shall have the meaning set forth in Section 6.07(b). “Regulatory Allocations” has the meaning set forth in Section 5.02(e). “Regulated Activities” means any activities or intended activities of the Company and its subsidiaries’ businesses that pursuant to applicable state and local laws requires a license or franchise (including, without limitation, permit, approval, order, authorization, registration, finding of suitability, exemption, certification, clearance, waiver and similar qualification) from a state or local governmental agency to conduct such activities, including without limitation the cultivation, harvesting, manufacturing, production, marketing, commercialization, distribution, transfer, sale and/or possession of cannabis or related substances, or products, activities or services containing or relating to the same. “Regulatory Authorities” means any state or local regulatory or licensing bodies, instrumentalities, departments, commissions, authorities, boards, officials, tribunals and agencies with authority over or responsibility for the regulation or licensing of Regulated Activities within any applicable state, local or tribal jurisdiction for Regulated Activities, including without limitation, the City, the California Department of Consumer Affairs Bureau of Cannabis Control, CalCannabis Cultivation Licensing, and the California Department of Health Manufactured Cannabis Safety Branch. “Regulatory Laws” means any applicable state and local laws, statutes and ordinances requiring a license or franchise (including, without limitation, permit, approval, order, authorization, registration, finding of suitability, exemption, certification, clearance, waiver and similar qualifications), including, without limitation the Fresno Code of Ordinance, for Regulated Activities and all orders, decrees, rules and regulations promulgated thereunder, and all policies and interpretations of the applicable Regulatory Authorities of such laws, statutes, ordinances, orders, decrees, rules, and regulations. “Regulatory License” any licenses or franchises (including, without limitation, permits, approvals, orders, authorizations, registrations, findings of suitability, exemptions, certifications, ANNEX 1 – DEFINED TERMS PAGE 11 OF 12 4840-1943-8017, v. 1 clearances, waivers and similar qualifications) from Regulatory Authorities or pursuant to Regulatory Laws. “Regulatory Redemption Date” means the date directed by a Regulatory Authority and, if not so directed, fixed by the Disinterested Members for the redemption of Units and Unit Equivalents pursuant to Section 8.06 “Regulatory Redemption Notice” means that notice of redemption delivered by the Company pursuant to Section 8.06 to a Member that is an Affected Person if the applicable Regulatory Authority so requires the Company, or if the Disinterested Managers, or if there are no Disinterested Managers the Disinterested Members, deem it necessary or advisable, to redeem such Affected Person’s Units and Unit Equivalents. Each Regulatory Redemption Notice shall set forth (i) the Regulatory Redemption Date, (ii) the number and type of Units to be redeemed, (iii) the Regulatory Redemption Price and the manner of payment therefor, and (iv) if applicable, the manner and place where any certificates for such Units (if any) shall be surrendered for payment, and (v) any other terms and conditions imposed by the applicable Regulatory Authority or the Disinterested Managers or the Disinterested Members, as applicable. “Regulatory Redemption Price” shall mean the per share price for the redemption of any Units and Unit Equivalents to be redeemed pursuant to Section 8.06, which shall be (i) the price (if any) required to be paid by the applicable Regulatory Authority, or if no such price is required, (ii) the amount deemed reasonable by the Disinterested Managers, or if there are no Disinterested Managers, the Disinterested Members (which determination may account for, in their discretion, the original purchase price per Unit and Unit Equivalents to be redeemed, the then fair market value of such Unit and Unit Equivalents, the closing price per share of such Unit and Unit Equivalents on any securities exchange (if listed), the costs and expenses of the Company incurred in performing its obligations and exercising its rights under Section 8.06 and any applicable circumstances or events of such Affected Person). “Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants, and other agents of such Person. “ROFR Notice” has the meaning set forth in Section 8.05(a). “ROFR Price” has the meaning set forth in Section 8.05(a). “Secondary ROFR Election” has the meaning set forth in Section 8.05(b). “Secondary ROFR Notice” has the meaning set forth in Section 8.05(b). “Secondary ROFR Period” has the meaning set forth in Section 8.05(b). “Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time. “Shortfall Amount” has the meaning set forth in Section 6.03(b). “Subscription Agreements” means, collectively, those certain Subscription Agreements, a form of which is attached hereto as Exhibit B, by and between the Company and the respective ANNEX 1 – DEFINED TERMS PAGE 12 OF 12 4840-1943-8017, v. 1 Member named therein, pursuant to which the named Member has acquired that number of Units set forth opposite such Member’s name on the Members Schedule. “Subsidiary” means, with respect to any Person, any other Person of which a majority of the outstanding units or other equity interests having the power to vote for directors are owned, directly or indirectly, by the first Person. “Target Capital Account” means the balance in the Capital Account maintained for each Member as of the end of each Fiscal Year, increased by any amount that such Member is obligated to restore under this Agreement, is treated as obligated to restore under Treasury Regulations § 1.704-1(b)(2)(ii)(c), or is deemed obligated to restore under the penultimate sentences of Treasury Regulations §§ 1.704-2(g)(1) and (i)(5). “Tax Advance” has the meaning set forth in Section 6.03(a). “Tax Amount” of a Member for a Fiscal Year means the product of: (a) the Tax Rate for such Fiscal Year; and (b) the Adjusted Taxable Income of the Member for such Fiscal Year with respect to its Units. “Tax Rate” of a Member, for any period, means the highest marginal blended federal, state, and local tax rate applicable to ordinary income, qualified dividend income, or capital gains, as appropriate, for such period for an individual residing in California, taking into account for federal income tax purposes, the deductibility of state and local taxes and any applicable limitations on such deductions. “Tax Representative” has the meaning set forth in Section 10.01(a). “Taxing Authority” has the meaning set forth in Section 6.04(b). “Third Party Purchaser” means any Person who, immediately prior to the contemplated transaction, does not directly or indirectly own or have the right to acquire any outstanding Units. “Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate, or similarly dispose of, either voluntarily or involuntarily, by operation of law or otherwise, or to enter into any contract, option, or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation, or similar disposition of, any Units or Unit Equivalents or any interest (including a beneficial interest) in any Units or Unit Equivalents and any agreement, arrangement or understanding, whether or not in writing, to effect any of the foregoing. “Transferor” and “Transferee” mean a Person who makes or receives a Transfer, respectively. “Transferring Member” has the meaning set forth in Section 8.05(a). “Treasury Regulations” means the final or temporary regulations issued by the United States Department of Treasury pursuant to its authority under the Code, and any successor regulations. “Unallocated Item” has the meaning set forth in Section 5.05. ANNEX 1 – DEFINED TERMS PAGE 13 OF 12 4840-1943-8017, v. 1 “Unit” means a unit representing a fractional part of the Membership Interests of the Members and shall include all types and classes of Units, including the Common; provided, however, that any type or class of Unit shall have the privileges, preference, duties, liabilities, obligations, and rights set forth in this Agreement and the Membership Interests represented by such type or class or series of Unit shall be determined in accordance with such privileges, preference, duties, liabilities, obligations, and rights. “Unit Equivalents” means any security or obligation that is by its terms, directly or indirectly, convertible into, exchangeable for, or exercisable for Units, and any option, warrant, or other right to subscribe for, purchase, or acquire Units. “Unpaid Preferred Return” means, with respect to any Member, on any date, an amount equal to the excess, if any, of (a) the Preferred Return allocated to a Member with respect to its Additional Capital pursuant to this Agreement, minus (b) the aggregate amount of all Distributions made (or deemed made) to such Member in payment of such Preferred Return pursuant to this Agreement, regardless of the source, kind or character. “Unreturned Additional Capital” means, with respect to any Member, on any date, an amount equal to the excess, if any, of: (a) the aggregate Additional Capital contributed by a Member to the Company, minus (b) the aggregate amount of all Distributions made (or deemed made) to such Member in return of such Additional Capital pursuant to this Agreement, regardless of the source, kind or character. “Withholding Advance” has the meaning set forth in Section 6.04(b). OPERATING AGREEMENT || 1261 WISHON OPCO, LLC EXHIBIT A – FORM OF JOINDER AGREEMENT EXHIBIT A FORM OF JOINDER AGREEMENT The undersigned is executing and delivering this JOINDER AGREEMENT pursuant to the Limited Liability Company Operating Agreement dated as of the 1st day of December, 2020, (as amended, modified, restated or supplemented from time to time, the “Operating Agreement”), among 1261 Wishon OPCO, LLC, a California limited liability company (the “Company”), and its Members party thereto. By executing and delivering this Joinder Agreement to the Company, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the provisions of the Operating Agreement in the same manner as if the undersigned were an original signatory to such agreement. The undersigned agrees that the undersigned shall be a [Manager/Member], as such term is defined in the Operating Agreement. Accordingly, the undersigned has executed and delivered this Joinder Agreement as of this [______ day of ______________________, 20__]. By: Name: EXHIBIT B FORM OF SUBSCRIPTION AGREEMENT Prospective Subscriber: ______________________ Phone: Email: Number and Class of Units:____________________ Purchase Price Per Unit: ______________________ Total Capital Commitment: ___________________ 1261 WISHON OPCO, LLC SUBSCRIPTION AGREEMENT THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is entered into by and among 1261Wishon OPCO, LLC, a California limited liability company (the “Company”), and the investor identified on the face page hereto (the “Subscriber”) in connection with the Subscriber’s purchase of the number of the Company’s [CLASS OF UNITS] Units (the “Units”) set forth on the face page hereto at a price per Unit identified on the face page hereto. The Subscriber hereby subscribes for the Units, and the Company and the Subscriber hereby agree as follows: 1. Commitment. The Subscriber agrees to contribute in immediately available funds that amount set forth under the heading “Total Capital Commitment” on the face page hereto within five (5) business days of the date hereof or, if agreed by the Company, to contribute services with a fair market value equal to such “Total Capital Commitment”. 2. Acceptance of Subscription. The Subscriber understands and agrees that this subscription is made subject to the following terms and conditions: (a) the members of the Company (the “Members”) reserve the right to review the suitability of any person desiring to purchase Units and, in connection with such review, to waive such suitability standards as to such person as the Members deem appropriate under Applicable Law; (b) the Members shall have the right to reject this subscription, in whole or in part; (c) the Members shall have no obligation to accept subscriptions in the order received; (d) the Units to be created on account of this subscription shall be created only in the name of the Subscriber, and the Subscriber agrees to comply with the terms of this Agreement and to execute any and all further documents necessary in connection with becoming a unitholder of the Company; and (e) the Subscriber hereby undertakes in respect of the Units that the Subscriber understands that upon a default of the Subscriber’s capital contribution obligations to the Company, the Units may be subject to forfeiture. 3. Conditions to Closing. Company’s obligations hereunder are subject to acceptance by the Company of the Subscriber’s subscription, and to the fulfillment, prior to or at the time of closing, of each of the following conditions: (a) the representations and warranties of the Subscriber contained in this Agreement shall be true and correct at the time of closing; and (b) all EXHIBIT B – FORM OF SUBSCRIPTION AGREEMENT PAGE 2 OF 5 4840-1943-8017, v. 1 proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be satisfactory in substance and form to the Members, and the Company shall have received all such counterpart originals or certified or other copies of such documents as the Company may request. 4. Subscriber’s Representations. In connection with the Subscriber’s purchase of the Units, the Subscriber makes the following representations and warranties on which the Members, Company and Company’s legal counsel are entitled to rely: (a) The Units will be held under the following type of ownership (Please check the applicable box):  Individual  Trust  Company  Other: (b) The Subscriber has received and read and understands the Company’s Limited Liability Company Operating Agreement (the “Operating Agreement”) and this Agreement. THE SUBSCRIBER HEREBY EXPRESSLY ACKNOWLEDGES AND AGREES THAT IT HAS CAREFULLY REVIEWED THE OMNIBUS RISK FACTORS ATTACHED TO THE COMPANY’S OPERATING AGREEMENT AS EXHIBIT C (THE “RISK FACTORS”), INCLUDING, WITHOUT LIMITATION, ALL RISK FACTORS RELATING TO THE COMPANY’S PROVISION OF GOODS AND SERVICES TO ENTITIES IN THE CANNABIS INDUSTRY. THE SUBSCRIBER HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT THE RISK FACTORS DO NOT REFLECT ALL OF THE RISKS INVOLVED IN AN INVESTMENT IN THE COMPANY. (c) No representations or warranties have been made to the Subscriber by the Company, the Members, or any agent of said persons, other than as set forth in this Agreement. Subscriber acknowledges that the Company has made no representations whatsoever to Subscriber regarding the value of the Units and Subscriber has independently arrived at his, her or its own opinion as to the value of the Units. (d) The Subscriber is acquiring the Units solely for the Subscriber’s own account and not directly or indirectly for the account of any other person whatsoever (or, if the Subscriber is acquiring the Units as a trustee, solely for the account of the trust or trust account named below) for investment. The Subscriber does not have any contract, undertaking or arrangement with any person to sell, transfer or grant participation to any person with respect to the Units. (e) The Subscriber has such knowledge and experience in financial and business matters that the Subscriber is capable of evaluating the merits and risks of the investment evidenced by the Subscriber’s purchase of the Units, and the Subscriber is able to bear the economic risk of such investment. (f) The Subscriber has had access to such information concerning the Company as the Subscriber deems necessary to enable the Subscriber to make an informed decision concerning the purchase of the Units. The Subscriber has had access to the Members and the EXHIBIT B – FORM OF SUBSCRIPTION AGREEMENT PAGE 3 OF 5 4840-1943-8017, v. 1 opportunity to ask questions of, and receive answers satisfactory to the Subscriber from, such Members concerning the offering of Units in the Company and the Company generally. The Subscriber has obtained all additional information requested by the Subscriber to verify the accuracy of all information furnished in connection with the offering of Units of the Company. (g) The Subscriber understands that the Units have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any securities law of any state of the United States or any other jurisdiction in reliance on an exemption for private offerings, and the Subscriber acknowledges that the Subscriber is purchasing the Units without being furnished any offering literature or prospectus other than the Operating Agreement and this Agreement. (h) The Subscriber is aware that the Subscriber must bear the economic risk of investment in the Units for an indefinite period of time, possibly until final winding up of the Company, because the Units have not been registered under the Securities Act, there is currently no public market therefor, the Subscriber may not be able to avail itself of the provisions of Rule 144 of the Securities Act with respect to the Units and the Units cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available. The Subscriber understands that the Company is under no obligation, and does not intend, to affect any such registration at any time. The Subscriber also understands that sales or transfers of the Units may be further restricted by the provisions of any laws or regulations promulgated or enacted by state or local jurisdiction in which the Company has operations pertaining to cannabis cultivation, dispensing, sale, storage, manufacturing, distribution, transporting, testing or other commercial cannabis activities within its respective jurisdiction (the “Cannabis Laws”) and, as applicable, securities laws of other jurisdictions and the states of the United States. (i) The Units will not be sold, pledged, transferred or disposed of except in accordance with the terms of this Agreement and the Cannabis Laws, and subject to the approval of the Members, and will not be sold or transferred without registration under the Securities Act, or pursuant to an applicable exemption therefrom. (j) Accredited Subscriber Representation. The Subscriber makes one (1) of the following representations regarding the Subscriber’s status as an “accredited investor” (within the meaning of Rule 501 under the Securities Act), and has checked the applicable representation:  (i) If an individual, the Subscriber has a net worth, either individually or upon a joint basis with the Subscriber’s spouse, of at least ONE MILLION UNITED STATES DOLLARS ($1,000,000.00 USD) (within the meaning of such terms as used in the definition of “accredited investor” contained in Rule 501 under the Securities Act).  (ii) If an individual, the Subscriber has had an individual income in excess of TWO HUNDRED THOUSAND UNITED STATES DOLLARS ($200,000.00 USD) for each of the two (2) most recent years, or a joint income with the Subscriber’s spouse in excess of THREE HUNDRED THOUSAND UNITED STATES DOLLARS ($300,000.00 USD) in each of those years, and has a reasonable expectation of reaching the same income level in the current year. EXHIBIT B – FORM OF SUBSCRIPTION AGREEMENT PAGE 4 OF 5 4840-1943-8017, v. 1  (iii) The Subscriber is an irrevocable trust with total assets in excess of FIVE MILLION UNITED STATES DOLLARS ($5,000,000.00 USD) whose purchase is directed by a person with such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment.  (iv) The Subscriber is a corporation, company, business trust or limited liability company, not formed for the purpose of acquiring the Units, or an organization described in § 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), in each case with total assets in excess of FIVE MILLION UNITED STATES DOLLARS ($5,000,000.00 USD).  (v) The Subscriber is an entity in which all of the equity owners are accredited investors.  (vi) The Subscriber cannot make any of the representations set forth in clauses (i) through (v) above. (k) The execution and delivery of this Agreement, the consummation of the transactions contemplated thereby and the performance of the obligations thereunder will not conflict with or result in any violation of or default under any provision of any other agreement or instrument to which the Subscriber is a party or any license, permit, franchise, judgment, order, writ or decree, or any statute, rule or regulation, applicable to the Subscriber. (l) The Subscriber has full power and authority to make the representations referred to in this Agreement, to purchase the Units pursuant to this Agreement and to deliver this Agreement. This Agreement creates valid and binding obligations of the Subscriber and is enforceable against the Subscriber in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting creditors’ rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance. (m) The Subscriber acknowledges that the Subscriber understands the meaning and legal consequences of the representations and warranties made by the Subscriber herein. Such representations and warranties are complete and accurate, shall be complete and accurate at the time of closing and may be relied upon by the Company and its legal counsel. Said representations and warranties shall survive delivery of this Agreement. If in any respect such information shall not be complete and accurate prior to the time of closi ng, the Subscriber shall give immediate notice of such incomplete or inaccurate information to the Company, specifying which representations or warranties are not complete and accurate and the reasons therefor. (n) The Subscriber confirms that he, she or it has been advised to consult with his, her or its attorney regarding legal matters concerning the Company and to consult with independent tax advisers regarding the tax consequences of investing in the Company. The Subscriber further acknowledges that he, she or it understands that any anticipated United States federal or state income tax benefits may not be available and, further, may be adversely affected through adoption of new laws or regulations or amendments to existing laws or regulations . The Subscriber acknowledges and agrees that the Company has no warranty or assurance regarding the EXHIBIT B – FORM OF SUBSCRIPTION AGREEMENT PAGE 5 OF 5 4840-1943-8017, v. 1 ultimate availability of any particular tax treatment of the Company’s investments or of any tax benefits to the Subscriber by reason of the Subscriber’s investment in the Company. (o) None of the cash or property that the Subscriber has paid, will pay or will contribute to the Company has been or shall be derived from, or related to, any activity that is deemed criminal under United States law and no contribution or payment by the Subscriber to Company, to the extent that they are within the Subscriber’s control, shall cause Company or the Members to be in violation of the United States Bank Secrecy Act, the United States Money Laundering Control Act of 1986 or the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, and any regulations promulgated thereunder. The Subscriber further understands that the Company or the Members may release confidential information about the Subscriber and, if applicable, any underlying beneficial owners, to proper authorities if the Members, in their sole discretion, determine that it is in the best interests of the Company in light of relevant rules and regulations under the laws set forth in above. 5. Indemnification. The Subscriber hereby agrees to indemnify and hold harmless the Company, the Members and each director, officer or employee thereof from and against any and all loss, damage or liability due to or arising out of any inaccuracy or breach of an y representation or warranty of the Subscriber set forth herein. 6. Survival of Agreements, Representations and Warranties. All agreements, representations and warranties contained herein or made in writing in connection with the transactions contemplated by this Agreement shall survive the execution of this Agreement, any investigation at any time made by the Subscriber, the Company or the Members or on behalf of any of them and the sale and purchase of the Units and payment therefor. 7. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. 8. Amendments. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only with the written consent of the Subscriber and the Members. 9. Governing Law. All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Agreement shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of California. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties hereto have executed this Agreement and investor questionnaire as of the dates set forth below. SUBSCRIBER: Name: ______________________________ Dated: Total Capital Commitment: _____________ Mailing Address: Telephone Number: Email Address: State/Country of Domicile: Federal Tax ID (or Soc. Sec. #): 1261 WISHON OPCO, LLC: By: Name: Title: Dated: _____ EXHIBIT C RISK FACTORS Legal and Political Risks Cannabis remains illegal under federal law. Cannabis is a Schedule-I controlled substance and is illegal under federal law in the United States. It remains illegal under United States federal law to grow, cultivate, sell or possess cannabis for any purpose or to assist or conspire with those who do so. Additionally, 21 U.S.C. 856 makes it illegal to “knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance.” Even in those states in which the use of cannabis has been authorized, its use remains a violation of federal law. Any person that is connected to the cannabis industry, including, but not limited to, the Subscriber or investors in the Company, may be at risk of federal criminal prosecution and civil liability. Any investments could also be subject to civil or criminal forfeiture and a total loss. Since federal law criminalizing the use of cannabis preempts state laws that legalize its use, strict enforcement of federal law regarding cannabis would likely result in the Company’s inability to proceed with its business plan and a possible total loss of its investment. Additionally, pursuant to 26 U.S. Code § 280E, any business engaged in the trafficking of a controlled substance may be prohibited from making certain deductions or obtaining certain tax credits. Some courts have determined that contracts relating to state legal cultivation and sale of cannabis are unenforceable on the grounds that they are illegal under federal law and therefore void as a matter of public policy. This could substantially impact the rights of parties making or defending claims involving the Company and any lender or member of the Company. Due to the federal illegality of cannabis and the charged political climate surrounding the cannabis industries of various states, political risks are inherent in the cannabis industry. It remains to be seen whether policy changes at the federal level will have a chilling effect on the cannabis industry. Rescission of the “Cole Memo.” On January 4, 2018, then-Attorney General Sessions rescinded the previously issued memoranda from the Justice Department which de-prioritized the enforcement of federal law against cannabis users and businesses who comply with state cannabis laws, adding uncertainty to the question of how the Federal government will now choose to enforce federal laws regarding cannabis. Attorney General Sessions issued a memorandum to all United States Attorneys in which Attorney General Sessions affirmatively rescinded the previous guidance as to cannabis enforcement, calling such guidance “unnecessary.” Attorney General Sessions’ one-page memorandum was vague in nature, stating that federal prosecutors should use established principals in setting their law enforcement priorities. Under previous administrations, the U.S. Department of Justice indicated that those users and suppliers of medical cannabis who complied with state laws, which required compliance with certain criteria, would not be prosecuted. As a result, it is now unclear if the Justice Department will seek to enforce the Controlled Substances Act against those users and suppliers who comply with state EXHIBIT C – OMNIBUS RISK FACTORS PAGE 2 OF 10 4840-1943-8017, v. 1 cannabis laws. If such enforcement occurs, the federal government may raid the Company, seize all of its equipment and inventory, and arrest all of its officers, executives, and owners, including the Subscriber. However, current Attorney General William Barr indicated he would not promote prosecution against companies that have relied on the Cole Memo, nor would he upset expectations or reliant interests related to it. At this point, it is unclear whether, and to what extent, the risk of federal enforcement will be altered under Attorney General Barr. The FinCEN Memo could be rescinded. Despite Attorney General Sessions’ rescission of the Cole Memorandum, the Department of the Treasury, Financial Crimes Enforcement Network has not rescinded the “FinCEN Memo” dated February 14, 2014, which de-prioritizes enforcement of the Bank Secrecy Act against financial institutions and cannabis-related businesses which utilize them. This memo appears to be a standalone document, and is presumptively still in effect. At any time, the Department of the Treasury, Financial Crimes Enforcement Network could elect to rescind the FinCEN Memo. This would make it more difficult for the Company to access the U.S. banking system and conduct financial transactions, which would have a material adverse effect on the Company Business (as defined herein). Enforcement of the Bank Secrecy Act against the Company would also be made more likely by the rescission of the FinCEN Memo. This would subject the Company’s officers, executives, and owners, including the Subscriber, to potential criminal prosecution, and would have a material adverse effect on the Company Business. Even with the FinCEN Memo in place, prosecution of the Company for violations of the Bank Secrecy Act remains possible, as the FinCEN Memo is only prosecutorial guidance and does not have the force of law. The 2015 Appropriations Rider must be reauthorized every year to provide any protections. In 2014, Congress passed a spending bill (the “2015 Appropriations Bill”) containing a provision (the “Appropriations Rider”) blocking federal funds and resources allocated under the 2015 Appropriations Bill from being used to “prevent such States from implementing their own State [medical marijuana] law.” The Appropriations Rider seemed to have prohibited the federal government from interfering with the ability of states to administer their medical cannabis laws, although it did not codify federal protections for medical cannabis patients and producers. Moreover, despite the Appropriations Rider, the Justice Department maintains that it can still prosecute violations of the federal cannabis ban and continue cases already in the courts. Additionally, the Appropriations Rider must be re-enacted every year. While it was continued in 2016, 2017, and through a series of short-term spending bills in 2018 and early 2019, the Appropriations Rider was briefly not in effect during the federal government shutdown that began on December 22, 2018. However, on February 15, 2019, Congress passed the Consolidated Appropriations Act, 2019, extending the Appropriations Rider through September 30, 2019. Prior to the expiration of the Consolidated Appropriations Act, 2019, Congress passed a continuing resolution on September 26, extending the Appropriations Rider through November 21, 2019, and EXHIBIT C – OMNIBUS RISK FACTORS PAGE 3 OF 10 4840-1943-8017, v. 1 later passed an additional continuing resolution on November 21, 2019, extending the Appropriations Rider through December 20, 2019. The Appropriations Rider was most recently renewed on December 20, 2019 through the signing of the FY 2020 omnibus spending bill, which will remain effective through September 30, 2020. The Company’s business is dependent on laws pertaining to the cannabis industry, and further legislative development is not guaranteed. The Company’s business plan involves the cultivation, distribution, manufacture, storage, transportation, and/or sale of medical and adult use cannabis products in compliance with applicable state law, but in violation of federal law, (generally referred to herein as the “Company Business”). Continued development of the cannabis industry is dependent upon continued legislative and regulatory authorization of cannabis at the state level. Any number of factors could slow or halt progress in this area. Further progress is not assured. While there may be ample public support for legislative action, numerous factors impact the legislative and regulatory process. Any one of these factors could slow or halt business operations relating to cannabis or the current tolerance for the use of cannabis by consumers, which would negatively impact the Company Business. The cannabis industry faces strong opposition. Many believe that several large, well-funded businesses may have a strong economic opposition to the cannabis industry. The Company believes that the pharmaceutical industry does not want to cede control of any product that could generate significant revenue. For example, medical cannabis will likely adversely impact the existing market for the current “marijuana pill” sold by mainstream pharmaceutical companies. Further, the medical cannabis industry could face a material threat from the pharmaceutical industry should cannabis displace other drugs or encroach upon the pharmaceutical industry’s products. The pharmaceutical industry is well funded with a strong and experienced lobby that eclipses that of the medical and retail cannabis industries. Any inroads the pharmaceutical industry makes in halting or impeding the cannabis industry could have a detrimental impact on the Company Business. Tax matters. To the extent that § 280E of the Internal Revenue Code is applicable to the Company and its business, the Company may not be able to deduct certain business expenses, thereby reducing its taxable income, and as a result may pay much higher federal taxes than other businesses. This could have a materially adverse impact on the Company’s financing results and ability to fund its operations and the Company may, in fact, operate at a loss, after taking into account its U.S. income tax expenses. The Company and its advisors have not provided any tax advice or made any representations relating to the tax treatment of any investment in the Company, including any acquisition of the Units by the Subscriber. THE SUBSCRIBER SHOULD SEEK TAX ADVICE, BASED ON THE SUBSCRIBER’S PARTICULAR CIRCUMSTANCES, FROM AN INDEPENDENT TAX ADVISOR PRIOR TO ACQUIRING THE UNITS. EXHIBIT C – OMNIBUS RISK FACTORS PAGE 4 OF 10 4840-1943-8017, v. 1 The legality of cannabis could be reversed. The voters or legislatures of California could potentially repeal Applicable Laws which permit both the operation of medical and retail cannabis businesses. These actions might force the Company to cease the Company Business. Enforceability of contracts. It is a fundamental principle of law that a contract will not be enforced if it involves a violation of law or public policy. Notwithstanding that cannabis-related businesses operate pursuant to the laws of states in which such activity is legal under state law, judges have on a number of occasions refused to enforce contracts for the repayment of money when the loan was used in connection with activities that violate federal law, even if there is no violation of state law . There remains doubt and uncertainty that the Company will be able to legally enforce contracts it enters into if necessary. As the Company cannot be assured that it will have a remedy for breach of contract, the Subscriber must bear the risk of the uncertainty in the law. If borrowers fail or refuse to repay loans and the Company is unable to legally enforce its contracts, the Company may su ffer substantial losses for which it has no legal remedy. Risk of criminal prosecutions for money laundering. One possible repercussion for the Subscriber is a prosecution for violation of federal money laundering statutes, specifically U.S.C.A. § 1956 and § 1957. Because these statutes criminalize certain transactions involving the proceeds of activity which is itself criminal, it is possible that the Subscriber could be subject to prosecution for investing in, obtaining dividends from, or otherwise transacting with the Company. While there have been no recent prosecutions of creditors to or investors in cannabis-related businesses for violation of either § 1956 or § 1957, this could change along with federal enforcement priorities. Risk of civil asset forfeiture. Because the cannabis industry remains illegal under federal law, any property owned by participants in the cannabis industry which are either used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owner of the property were never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture. Risk of RICO prosecution or civil liability. The Racketeer Influenced Corrupt Organizations Act (“RICO”) criminalizes the use of any profits from certain defined “racketeering” activities in interstate commerce. While intended to provide an additional cause of action against organized crime, due to the fact that cannabis is illegal under U.S. federal law, the production and sale of cannabis qualifies cannabis-related businesses as “racketeering” as defined by RICO. As such, all officers, executives, and owners in a cannabis- related business could be subject to criminal prosecution under RICO, which carries substantial criminal penalties. EXHIBIT C – OMNIBUS RISK FACTORS PAGE 5 OF 10 4840-1943-8017, v. 1 RICO can create civil liability as well: persons harmed in their business or property by actions which would constitute racketeering under RICO often have a civil cause of action against such “racketeers,” and can claim triple their amount of estimated damages in attendant court proceedings. The Company as well as its officers, executives, and owners could all be subject to civil claims under RICO. Legal uncertainty. Laws and regulations affecting the medical and retail cannabis industry are constantly changing, which could detrimentally affect the Company’s proposed operations. Local, state, and federal cannabis laws and regulations are broad in scope and subject to evolving interpretations, which could require the Company to incur substantial costs associated with compliance or alter its business plan. In addition, violations of these laws, or allegations of such violations, could disrupt the Company Business and result in a material adverse effect on the Company’s operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to the Company Business, including, but not limited to, regulations or laws impacting the amount of production that the Company’s partners are authorized to produce. The Company cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can the Company determine what effect additional governmental regulations or administrative policies and procedures, if promulgated, could have on the Company Business. The Company Business is dependent on the acquisition and retention of vari ous licenses by its partners and customers. The Company Business is dependent on obtaining and maintaining various licenses from various municipalities and state licensing agencies in the State of California. There can be no assurance that the Company will obtain any or all licenses necessary to operate their businesses, which could have a negative impact on the Company Business. If a licensing body were to determine the Company had violated the applicable rules and regulations, there is a risk the licenses granted could be revoked, which would negatively impact the Company Business. Further, there is no guarantee the Company will be able to obtain any additional licenses necessary to expand the Company Business. The Company’s management team or other owners could be disqualified from ownership in the Company. The Company Business is in a highly regulated industry in which many states have enacted extensive rules for ownership of a participant company. The Company’s founders, investors, or other owners (which could include the Subscriber) could become disqualified from having an ownership stake in the Company under relevant laws and regulations of applicable state and/or local regulators, if the applicable owner is convicted of a certain type of felony or fails to meet the requirements for owning equity in a company like the Company. EXHIBIT C – OMNIBUS RISK FACTORS PAGE 6 OF 10 4840-1943-8017, v. 1 The Company may have difficulty accessing the service of banks and bankruptcy protections, which may make it difficult for them to operate or unwind. Since the use of cannabis is illegal under federal law, there is a compelling argument that banks cannot lawfully accept for deposit funds from businesses involved with cannabis. Consequently, businesses involved in the cannabis industry often have trouble finding a bank willing to accept their business. The inability to open bank accounts may make it difficult for the Company or its partners or customers to operate and the reliance on cash can result in a heightened risk of theft. Additionally, some courts have denied cannabis businesses bankruptcy protection, thus, making it very difficult for lenders to recoup their investments. The Company will not have full access to federal intellectual property protections. The United States Patent and Trademark Office does not allow trademarks directly related to cannabis and cannabis products to be registered due to the illegal nature of the business and products under federal law. While patent protection for inventions related to cannabis and cannabis products is available, there are substantial difficulties faced in the patent process by cannabis- related businesses. There can be no assurances that any proprietary business processes, patents, copyrights or trademarks that may be issued to a cannabis business will offer any degree of protection. Insurance risks. In the United States, many cannabis-related companies are subject to a lack of adequate insurance coverage including, without limitation, general coverage for cultivating cannabis and traditional commercial insurance covering dispensary transit. In addition, many insurance companies may deny claims for any loss relating to cannabis for reasons such as it is illegal under federal law, a contract for an illegal item is unenforceable, or there can be no insurable interest in an illegal item. Product liability in cannabis-related companies. Many cannabis-related companies are subject to strict product liability laws where a cannabis- related retailer who sells a defective product to a consumer is subject to liability for any harm that befalls that consumer due to the defect. For example, a retailer who sells cannabis infused products could be held liable if that product was tainted in the manufacturing process or inadequately labeled and a consumer subsequently fell ill, even if the retailer had nothing to do with the manufacturing process. Any suit against any cannabis-related business could adversely affect the Company and cause substantial losses for the Company. This area of law is unsettled and there is very little statutory or case law regarding cannabis and products liability. Risks associated with young industries. The cannabis industries in those states which have legalized such activity are not yet well- developed, and many aspects of these industries’ development and evolution cannot be accurately predicted. While the Company has attempted to identify many risks specific to the cannabis industry, the Subscriber should carefully consider that there are probably other risks that the Company has not foreseen or not mentioned in this document, which may cause the Subscriber to EXHIBIT C – OMNIBUS RISK FACTORS PAGE 7 OF 10 4840-1943-8017, v. 1 lose some, or all, of the Subscriber’s investment. Given the limited history, it is difficult to predict whether the cannabis market will continue to grow or whether it can be maintained. For example, as a result of the Company’s limited operating history in a new industry, it is difficult to discern meaningful or established trends with respect to the purchase activity of the Company’s customers. The Company expects that the market will evolve in ways which may be difficult to predict. For example, the Company anticipates that over time it will reach a point in most markets where the Company has achieved a market penetration such that investments in new customer acquisition are less productive and the continued growth of the Company’s revenue will require more focus on increasing the rate at which the Company’s existing customers purchase products. In the event of these or any other changes to the market, the Company’s continued success will depend on the Company’s ability to successfully adjust the Company’s strategy to meet the changing market dynamics. If the Company is unable to successfully adapt to changes in its markets, the Company’s business, financial condition, and results of operations could suffer a material negative impact. Possible shrinkage or lack of growth in the cannabis industry. If no additional states, U.S. territories, or countries allow the legal use of cannabis, or if one or more jurisdictions which currently allow it were to reverse position, the Company may not be able to grow, or the market for the Company’s products and services may decline. There can be no assurance that the number of jurisdictions which allow the use of cannabis will grow, and if it does not, there can be no assurance that the existing jurisdictions will not reverse position and disallow such use. If either of these events were to occur, not only would the growth of the Company’s business be materially impacted in an adverse manner, but the Company may experience declining revenue as the market for its products and services decline. Illiquid investment, restrictions on transfer. The Units are subject to legal and other restrictions on transfer and are investments for which no liquid market exists. As a consequence, the Subscriber may not be able to sell their Units if the Subscriber desired to do so, or to realize what it perceives to be fair value in the event of a sale or liquidation. There is no market for the Units and it should not be assumed that a public market will develop. The Units may not be resold, transferred, or otherwise disposed of by any holder except in compliance with applicable securities laws and the transfer restrictions contained in the Organization Documents. Accordingly, the Subscriber may not be able to liquidate their investment in the Company, or pledge the investment as collateral, and should consider their investment to be long-term. Units not registered under the Securities Act or state Blue Sky laws. The Units will not be registered for public sale or resale under the Securities Act or the securities laws of any state, in reliance upon exemptions which depend in part upon the investment intent of the Subscriber. There is no present plan to register the Units in the future. Accordingly, the Units must be acquired for investment purposes only and not with a view to resale or other distribution. The Units will only be offered and sold to such persons who are “accredited investors” as defined in Rule 501 of Regulation D promulgated under the Securities Act. The Units will be offered EXHIBIT C – OMNIBUS RISK FACTORS PAGE 8 OF 10 4840-1943-8017, v. 1 without registration in reliance upon the Securities Act exemption for transactions not involving a public offering. The Subscriber will be required to make certain representations to the Company, including that they are acquiring interests in the Company for their own account, for investment purposes only, and not with a view to their distribution. Need for additional financing. The Company anticipates that it will be able to raise sufficient capital to fund its anticipated development and operation through various sources. However, the estimated budget is based on certain assumptions, including assumptions related to the performance of the business, and there can be no assurance that unanticipated unbudgeted costs will not be incurred or that the business will not perform as expected. Future events, including problems, delays, expenses and difficulties frequently encountered in the industry, as well as changes in economic, regulatory, or competitive conditions, may lead to cost increases that could make it necessary or advisable for the Company to seek additional financing. There can be no assurance that the Company would be able to obtain any necessary additional financing on terms acceptable to the Company, if at all . Also, additional financings may result in dilution of equity stakes in the Company. Product risks. The Company’s product line is in a new and unique product category and there can be no guarantee that any products will be appealing to consumers or will be a success commercially. As with any product, there is the possibility that a claim could be brought against the Company if any consumer has a negative reaction to the product. Product recalls. Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety, and inadequate or inaccurate labeling disclosure. Such recalls cause unexpected expenses of the recall and any legal proceedings that might arise in connection with the recall. This can cause loss of a significant amount of sales. In addition, a product recall may require significant management attention. Although the Company has detailed procedures in place for testing its products, there can be no assurance that any quality, potency, or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action, or lawsuits. Additionally, if one of the Company’s brands or products were subject to recall, the image of that brand and the Company could be harmed. Additionally, product recalls can lead to increased scrutiny of operations by applicable regulatory agencies, requiring further management attention and potential legal fees and other expenses. Results of future clinical research. Research in Canada, the U.S., and internationally regarding the medical benefits, viability, safety, efficacy, dosing, and social acceptance of cannabis or isolated cannabinoids remains in early stages. There have been relatively few clinical trials on the benefits of cannabis or isolated cannabinoids (such as CBD and THC). Future research and clinical trials may prove such EXHIBIT C – OMNIBUS RISK FACTORS PAGE 9 OF 10 4840-1943-8017, v. 1 statements to be incorrect, or could raise concerns regarding, and perceptions relating to, cannabis. Given these risks, uncertainties, and assumptions, the Subscriber should not place undue reliance on such articles and reports. Future research studies and clinical trials may reach negative conclusions regarding the medical benefits, viability, safety, efficacy, dosing, social acceptance, or other facts and perceptions related to cannabis, which could have a material adverse effect on the demand for the Company’s products with the potential to lead to a material adverse effect on the Company’s business, financial condition, results of operations, or prospects. Reliance on key inputs. The cannabis business is dependent on a number of key inputs and their related costs including raw materials and supplies related to growing operations, as well as electricity, water , and other local utilities. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact the business, financial condition, results of operations, or prospects of the Company. Some of these inputs may only be available from a single supplier or a limited group of suppliers. If a sole source supplier was to go out of business, the Company might be unable to find a replacement for such source in a timely manner or at all. If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to the Company in the future. Any inability to secure required supplies and services or to do so on appropriate terms could have a materially adverse impact on the business, financial condition, results of operations, or prospects of the Company. Competition from synthetic production and technological advances. The pharmaceutical industry may attempt to dominate the cannabis industry through the development and distribution of synthetic products which emulate the effects and treatment of organic cannabis. If they are successful, the widespread popularity of such synthetic products could change the demand, volume, and profitability of the cannabis industry. This could adversely affect the ability of the Company to secure long-term profitability and success through the sustainable and profitable operation of its business. There may be unknown additional regulatory fees and taxes that may be assessed in the future. Constraints on marketing products. The development of the Company’s business and operating results may be hindered by applicable restrictions on sales and marketing activities imposed by government regulatory bodies. The regulatory environment in the United States limits companies’ abilities to compete for market share in a manner similar to other industries. If the Company is unable to effectively market its products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for its products, the Company’s sales and results of operations could be adversely affected. Fraudulent or illegal activity by employees, contractors, and consultants. The Company is exposed to the risk that its employees, independent contractors, and consultants may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless, and/or negligent conduct or disclosure of unauthorized activities to the EXHIBIT C – OMNIBUS RISK FACTORS PAGE 10 OF 10 4840-1943-8017, v. 1 Company that violates: (i) government regulations; (ii) manufacturing standards; (iii) federal and provincial healthcare fraud and abuse laws and regulations; or (iv) laws that require the true, complete, and accurate reporting of financial information or data. It may not always be possible for the Company to identify and deter misconduct by its employees and other third parties, and the precautions taken by the Company to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting the Company from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against Company, and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on the Company’s business, including the imposition of civil, criminal, and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of the Company’s operations, an y of which could have a material adverse effect on the Company’s business, financial condition, results of operations , or prospects. The foregoing list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Company. The Subscriber should read this Agreement in its entirety and consult with their own advisors before deciding whether to invest in the Company. In addition, as the Company’s investment program develops and changes over time, an investment in the Company may be subject to additional and different risk factors. 1261 Wishon OPCO, LLCIntroducingRetailBusiness ApplicationCITY OF FRESNO Cookies is revolutionizing cannabis. For almost 25 years, Cookies has developed unique cannabis strains with standout cannabinoid profiles, changing what people demand in their cannabis flower. Cookies has not just transformed the cannabis community, we have reimagined what a cannabis company can be, reaching out into media and pop culture. With celebrity endorsements, a hype fashion brand, and an active social media presence, Cookies is more than a neighborhood dispensary. Cookies is a global brand and customers travel from far and wide to shop at our retail locations. Cookies is changing the game when it comes to the retail cannabis experience. With a futuristic look and a consistent design theme, Cookies provides customers with an immersive shopping experience unlike anything else. Our retail locations feature white and metallic surfaces accented by our signature cyan blue. Our layout encourages customers to interact with products and people in a new and enlightening way. We have abandoned the concept of tv monitor menus for community connection. Round flower tables spark conversations between customers and our budtenders. We try to go bigger and better with each new concept and Fresno will be no exception. Cookies is a platform for providing prosperity to communities. We come from humble roots; specifically, a garage in San Francisco, and we know what it means to play a part in uplifting the community. Helping the communities we serve is in our DNA. We work rigorously with local leaders, organizations, and businesses to ensure that our success is felt communitywide. In Fresno, we have assembled an advisory board of community leaders and developed relationships with impactful nonprofits, including United Way Fresno and Madera Counties, Poverello House, Breaking the Chains, Barrios Unidos, and others. Our model estimates that at least will be spent annually in our community benefits program. From humble roots, Cookies has grown to become the most innovative cannabis brand in the country. The cannabis industry is changing and our popularity is increasing with each new store that we open. This proposal lays the framework and vision for our dispensary in Fresno. We are ready to launch and get the dispensary off the ground in short order. ONE OF THE MOST RESPECTED ANDTOP-SELLING CANNABIS BRANDS IN CALIFORNIA. Introducing Cookies1 1261 Wishon OPCO, LLC • District 1 • • • 1 THE PROJECT Cookies is proposing a Lemonnade dispensary at 1264 N. Wishon Avenue, in a 7,125 square foot standalone commercial building on a 12,780 square foot lot. This building is commonly known as the old Bank of America building. There is an abundance of parking on both sides of our building, which includes ADA-compliant parking and a van loading area with a sidewalk ramp directly next to our storefront. Our property is strategically located in the heart of the Tower District, Fresno’s dining, arts and entertainment district. The Tower District is perfectly suited for a cannabis retailer and we are the only applicant to earn an endorsement from the Tower District Marketing Committee. We expect to create 33 middle class jobs with benefits and serve 18 customers per hour and 250 customers per day. This will generate an estimated million in gross receipts in year one, which equates to in local taxes. The project will provide a necessary service for Fresnans, stable middle-class jobs, and a substantial source of tax revenue for the city. LEMONNADE STOREFRONT Lemonnade is Cookies’ sister brand. It was founded in 2015 by Cookies co-founder Berner and industry legend Brett Wilson who saw something special in the cannabis cultivar, Lemon Diesel. Notoriously difficult to cultivate, but with a vibrant terpene profile and euphoric psychoactive effects common among sativa-dominant strains, it was quickly made popular by Berner and other California-based recording artists. After years of research and development, Lemonnade has created a full menu of flavor-forward sativa-dominant strains beloved by both cannabis connoisseurs and new consumers looking for exotic tasting products that cannot be found anywhere else. With more than 15 flavorful cannabis varieties and product lines including indoor, greenhouse and sun grown flower, pre-rolls, extracts, and concentrates, customers can always expect something special at a Lemonnade store. To match the originality of its product offerings, the Lemonnade dispensary experience is like nothing else in the industry. With an emphasis on human interaction and shared experiences, customers at Lemonnade learn about the craft behind the crop from a staff with in-depth cultivation knowledge. The cannabis industry is changing. Many consumers now value flavor over potency and the more uplifting sativa-dominant cultivars over the more sedative indicas. Lemonnade has long anticipated this change and is committed to creating a fresh experience with innovative products that appeals to this changing demographic. LOCALLY OWNED AND OPERATED Although Cookies is a global brand, we are a locally owned business. Fresno resident, Kacey Auston, is the majority shareholder of Lemonnade Fresno. Kacey was born and raised in Fresno and cares deeply about her community and fights for its future. The hardships Kacey faced in Fresno as a single mother have shaped her career. Like many in the area, Kacey, then 23 years old, found herself struggling to survive. For five years, she worked full time and found odd jobs on the weekends. She knew if she wanted to provide a better life for her family and others, it would take hard work and creativity. Always an entrepreneur at heart, in 2005, Kacey made the life changing decision to bet on herself to become an advocate for others and launched Auston Consulting. Through her consultancy, she has worked to connect businesses with local governments, achieving client goals that were in the best interests of the Fresno community. By believing in herself, working hard, and following through on a creative vision, Kacey was able to provide a better future for her children and a better future for Fresno. Business Plan 1 1261 Wishon OPCO, LLC • District 1 • • • 2 When Fresno announced its intention to regulate cannabis, Kacey wanted the city to select operators that would love and support Fresno the same way she does. In order to find a good operator for Fresno, she employed the same test she uses to evaluate clients of her consultancy: they must share her belief in livable wages and employee benefits and they must support the Fresno community. In Cookies, she found a match. From their first meeting, she saw a team that embraced community benefit, employee support, and what it means to be a Fresnan. Kacey is excited to partner with Cookies and introduce Cookies to Fresno. Fresno is not only her home, it is where she has advocated for her community while raising her family and maintaining a business. Kacey has dedicated her life to creating a strong economic future for her children and grandchildren. She has found a strong partner in Cookies through its business plan, commitment to equity, and community engagement. Her work with Cookies is not only an investment for her family, it is also an investment in the community that she loves and has built her life around. OUR EXPERIENCE Cookies is the most qualified cannabis business to operate in Fresno. As explained in more detail in Section 1.1, we have assembled an unprecedented ownership and executive team. Our multidisciplinary team includes innovators in cannabis cultivation, real estate development, financing, marketing and branding, security, cannabis compliance, and retail operations. We know how to build, launch, and operate successful dispensaries. Our approach has transformed Cookies into the world’s largest cannabis consumer-recognized brand. In addition, Cookies has developed scalable infrastructure that will allow us to execute a seamless launch in Fresno. Cookies has 21 storefronts in 5 states and zero compliance violations. Our license information is set forth below. We have systems for launching stores, compliant operations, and world class customer service. The team identified in this application has opened 9 retail storefronts in 2020. From urban areas like Haight St. in San Francisco to our 4,000 square foot facility in suburban Oklahoma City, we know how to tailor our operations to the communities that we serve. Our best in class operations is set forth in more detail in sections 1.5-1.6. No other applicant has accomplished what we have accomplished in the last two years. Because a Cookies retail storefront is a regional destination, Cookies transitions the most customers to the regulated market. This captures tax revenues for cities and combats the unregulated cannabis market. In Fresno, we expect to do per year at our Wishon location. Our numbers in other cities support our estimates. Cookies customers on average travel 50 miles to our storefront and spend per visit. Eighty one percent (81%) of Cookies customers are repeat shoppers. Our flower strain Gary Payton is the number one selling cannabis product in the country according to industry analytics. We also have achieved the highest market share in the jurisdictions where we operate. In Michigan for example, Cookies is responsible for 15% of total sales in a state with 220 dispensaries. In Oklahoma, Cookies sales are 7,000% higher than the average dispensary. Unlike other applicants, Cookies offers a unique value proposition: we have an in demand product line that is available only at Cookies retail storefronts. Sales of Cookies products constitute 70% of sales at a Cookies dispensary. Simply put, we can capture segments of the market that other applicants cannot. Our success is due to the fact that Cookies is an authentic cannabis company with nearly 25 years of history. We know who our customers are, and we deliver the authentic cannabis buying experience that they are looking for. Because of our unique product offerings, our best-in-class operations and operations team, and ability to drive revenue in the regulated marketplace, we are the most qualified applicant to deliver regulated cannabis to the city of Fresno. WE EXPECT TO DO PER YEAR AT OUR WISHON LOCATION LOCALLY OWNED LOCALLY OPERATED Kacey has found a strong partner in Cookies through its BUSINESS PLAN, COMMITMENT TO EQUITY, COMMUNITY ENGAGEMENT, and NATIONAL EXPERIENCE. Business Plan 1 1261 Wishon OPCO, LLC • District 1 • • • 3 State of California Department of Public Health California Bureau of Cannabis Control State of Washington Washington State Department of Revenue California Division of Tax andFee administration California Department of Food and Agriculture Adult-use &/or Medical Retailer Cultivation Nursery Annual Provisional None Processor Microbusiness Colorado State Department of Revenue Marijuana informant division Oregon Liquor Control Commission State of Michigan Marijuana Regulatory Agency LEGEND ENTITY NAME LICENSE NUMBER LICENSE TYPE LICENSING AGENCY STATUS DISCIPLINARY ACTION ADDRESS 2CW PRODUCTIONS CDPH-10002394 2351 Circadian Way Santa Rosa, CA 95407 2351 CIRCADIAN WY LLC CDPH-10002394 2351 Circadian Way Santa Rosa, CA 95407 COOKIES MANUFACTURING CDPH-10002394 2351 Circadian Way Santa Rosa, CA 95407 2351 CIRCADIAN WY LLC CCL18-0000223 2351 Circadian Way Santa Rosa, CA 95407 AFTER CARE PATIENT'S GROUP LLC C10-0000-604-LIC 5338 Alhama Dr. Woodland Hills, CA 91364 GOLDEN HEALTH & WELLNESS C10-0000188-LIC 1115 Fee Dr. Sacramento, CA 95815 License Table1 1261 Wishon OPCO, LLC • District 1 • • • 4 GREEN DOOR REDDING LLC C10-0000467-LIC 1700 Cypress Ave E Redding, CA 96002 HAYWARD STATION C10-0000743-LIC 1004 B St. Hayward, CA 94541 INFINITY ASSETS MERCED LLC C10-0000655-LIC 811 Main St W Merced, CA 95340 JIVA SBD LLC C10-0000742-LIC 494 Orange Show Road Rd. W Suite D San Bernandino, CA 92408 JONESA LLC C10-0000638-LIC 1944 Orangeburg Ave W Modesto, CA 95350 KIND HOUSE, INC C11-0000937-LIC 2765 Griffin Ave Santa Rosa, CA 95407 KOB RETAILERS INC 604132656 3111 S Pine St Tacoma, WA 98409 MAGIC CASTLE INC CTS # 050-10055695C26 11321 SW 64th Ave Portland, OR 97219 MEDICAL MIRACLE LLC C10-0000407-LIC 7935 El Cajon Blvd. La Mesa, CA 91942 MODERN BUDS LLC C10-0000247-LIC 3730 E Broadway Long Beach, CA 90803 510 RETAIL EVENTS INC C10-0000605-LIC 1776 Broadway Oakland, CA 94612 OCEAN HYE LLC C10-0000210-LIC 1017 E Ocean Ave Unit A Lompoc, CA 93436 KOB RETAILERS INC A39272323 830 E Fairhaven Ave Burlington, WA 98223 GREEN DOOR MERCED 252571648 - 00001 811 Main St W Merced, CA 95340 MAYWOOD L'CHAIM C12-0000233-LIC 5815 Maywood Ave Maywood, CA 90270 E2T2 LLC 402-00768 2057 So. Broadway Denver, CO 80210 PURPLE HEART COMPASSION LLC C10-0000405-LIC 8360 Melrose Ave Bldg 1 Los Angeles, CA 90069 ROBERTSON CAREGIVERS BEVERLYWOOD C10-0000296-LIC 12800 Wentworth St Arleta, CA 91331 License Table1 1261 Wishon OPCO, LLC • District 1 • • • 5 SUNSET POINT NURSERY, LLC CCL19-0005091 9676 Harvest Road Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005071 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005072 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005073 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005075 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005077 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005078 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005079 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005080 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005081 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005082 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005083 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005076 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005087 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005088 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005090 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005089 9676 Harvest Rd. Unincorporated, CA 93440 SUNSET POINT NURSERY, LLC CCL19-0005083 9676 Harvest Rd. Unincorporated, CA 93440 PATIENTS AGAINST PAIN INC.C10-0000495 8016 Melrose Avenue, Los Angeles CA 90046 AEY CAPITAL LLC PC-000368 6030 East 8 Mile Rd, Detroit MI 48324 License Table1 1261 Wishon OPCO, LLC • District 1 • • • 6 1.2: STARTUP BUDGET Cookies submits the following budget for constructiooperation, and maintenance, compensation of employeeequipment costs, utility cost, and other operation costs fo Startup Budget1.2 - 1.3 1261 Wishon OPCO, LLC • District 1 • • • 25 1.5: HOURS OF OPERATION AND OPENING AND CLOSING PROCEDURES HOURS OF OPERATION To accommodate customers with busy schedules while respecting neighboring businesses and residents, we will operate our Fresno dispensary and delivery service within the timeframe allowed by state and local regulations. Our regular retail hours will be from 8:00 a.m. to 10:00 p.m. Pacific Time. Our staff will prepare the storefront and may receive cannabis shipments between 6:00 a.m. and 8:00 a.m., prior to opening to the public. Our hours are designed to encourage customers to transition from the unregulated marketplace to the regulated marketplace. We will not open our dispensary to the public or deliver any cannabis goods outside of our regular retail hours. To ensure compliance with this policy, management will instruct all employees not to allow the sale of any cannabis goods outside of our regular retail hours, and the point-of-sale system will be programmed so that sales cannot be processed before 6:00 a.m. or after 10:00 p.m. Last call for sales will occur at 9:45 p.m., and the last transaction will only be initiated if there is enough time to complete the purchase, including returning to the dispensary after a delivery, within regular retail hours. Any change to our regular retail hours will need to be approved by management, who will ensure the hours remain between 6:00 a.m. and 10:00 p.m. 16 CCR § 5403; FMC § 9-3310(a)(1). To communicate scheduled opening and closing times to our customers, we will post our hours of operation in a conspicuous location in the dispensary lobby. Further, we will provide our hours of operation on our website and all social media platforms. Our uniformed security guards will ensure that all customers have exited the premises by conducting a sweep of the premises at closing time and politely escorting any remaining customers off the premises. To optimize security when the dispensary is closed, during non-business hours: (i) the premises will be securely locked with commercial-grade locks; (ii) the premises will be equipped with an active alarm system that will be responded to by the security company; (iii) cannabis goods and currency will be securely stored; and (iv) only authorized personnel with a legitimate business purpose will be allowed to enter the premises. 16 CCR § 5403.1. OPENING AND CLOSING PROCEDURES To ensure a safe, clean, and welcoming environment at our Fresno dispensary, we will implement our best-in-class standard operating procedures for opening and closing the dispensary each day. As experienced operators, we understand that security risks are heightened during opening and closing times, when both customer traffic and the presence of dispensary personnel are lowest. To mitigate security risks, improve efficiency and consistency, and minimize mistakes in opening and closing our dispensary, dispensary personnel will utilize standard opening and closing checklists. At least two employees (including one manager) and at least one security guard will be present to open and close the facility so that the facility is adequately monitored and protected while opening and closing procedures are performed. The security guard, management, and any other personnel will arrive at least one hour prior to opening. (Regular opening hours will be from 6:00 a.m. to 8:00 a.m., and regular open-for-retail hours will be from 8:00 a.m. to 10:00 p.m.) Management will either perform or supervise the performance of each task described below. OPENING PROCEDURES. Upon arrival at the premises, the security guard will first perform a visual check of the building exterior, and if concerned, will call 911. Once the guard confirms safety, management will unlock the main entrance, turn off the alarm system, and relock the door after entering. The guard will perform another visual check of the premises interior, as well as verifying proper lighting and camera views for the video surveillance system. If the guard encounters any issues with the surveillance system, operations will be discontinued until the system is repaired. Once assured that the surveillance system is operational, management will open the vault, remove the cash register tills, secure the vault, and take the tills to the office to be counted and picked up by employees at the start of their shifts. Management will then turn on all non-security computers and the HVAC system, adjusting as needed for customer comfort and/or cannabis storage. To ensure adequate odor control, management will confirm all carbon filters are operational and unobstructed. Management and assigned personnel will then prep the storefront for customers, including setting up displays and generally tidying the premises. Management will then check emails, turn on the POS stations, and check for Track-and-Trace alerts. After addressing any emails and/or Track-and-Trace alerts, management will meet with employees to delegate daily tasks and review the schedule. Finally, the security guard will confirm that all exterior doors, limited-access area doors, the vault, and the restroom are securely locked before giving management approval to unlock the customer entrance and open the dispensary to the public. Hours of Operation and Opening and Closing Procedures1.5 1261 Wishon OPCO, LLC • District 1 • • • 39 FORM FOR LEMONNADE RETAIL Hours of Operation and Opening and Closing Procedures1.5 1261 Wishon OPCO, LLC • District 1 • • • 40 CLOSING PROCEDURES. Management will announce last call to any customers in the retail area at least 15 minutes before closing and lock the customer entrance from the inside to prevent new customers from entering. At this time, transactions will only be initiated if there is enough time to complete the purchase within regular retail hours. An employee will be stationed at the door to let any remaining customers out one at a time and to report any loitering customers to security. The security guard will survey the premises at closing to confirm there are no remaining customers on site. Once assured that all customers have exited the premises, management will transfer any cannabis goods from the retail area into the vault and will close out the registers by counting cash and balancing in the office, settling all credit card machines, and placing all tills in the locked vault. Management will then confirm that all necessary data has been uploaded to METRC for the day. Next, management and/or assigned personnel will complete daily janitorial tasks like cleaning and restocking restrooms, dusting and mopping floors, and emptying trash receptacles. Finally, management will turn off non-security computers, the HVAC system (except as needed to preserve cannabis goods), all lights (except security lighting), and all POS stations before setting the alarm, exiting the dispensary, and locking the main entrance door from the outside. FORM FOR LEMONNADE RETAIL Hours of Operation and Opening and Closing Procedures1.5 1261 Wishon OPCO, LLC • District 1 • • • 41 1.6: DAY-TO-DAY OPERATIONS At Cookies, we approach operations with a whole community perspective in how we operate internally as a company and externally in the communities we serve. Our understanding of the complexities of regulations, compliance, and procedures is paramount to our success, and the execution of this in any location is dependent upon our staff and leadership. At Lemonnade, we will implement an open education platform that includes cross-training staff in areas of compliance and operations not limited to their job titles. This will empower staff with a base of knowledge in all areas of operations. For example, reception staff will be trained in cannabis products and local regulations to help inform customers before they enter the salesroom, and sales staff will be trained in basic back of house operations (e.g., intake, inventory, storage) so they can spot any irregularities. All these varied efforts cumulate in a culture of compliance in our operations. Our operation standards extend beyond our stores and into our communities. We recognize the success we will achieve is dependent on community partnerships, education, and support. To that end, we have begun and will continue to execute robust community engagement programs, working with neighbors, community groups, and local law enforcement to educate and elicit feedback to ensure our operations are not only effective and compliant but enriching our communities. We have already developed a formal relationship with several local non-profits and have met with former Fresno Chief of Police and incoming Mayor, Jerry Dyer, to discuss security concerns. Our day-to-day operations constitute best practices. Our extensive experience as cannabis dispensary operators in a variety of jurisdictions allows us to elevate Lemonnade’s’ internal operations and external community engagement from merely complying with state and local regulations to setting the standard for worldwide commercial cannabis best practices. In order to ensure that we continue to set the standard for best practices, we hire the most qualified individuals to oversee our operations. Cookies recently hired David Chiovetti to serve as COO of Retail. David is a retail operations professional with over two decades experience overseeing retail operations at national retailers, including Lucky, True Religion, and Guess. For two years, he worked for MedMen as Senior Vice President of Retail Operations and Executive Vice President of Retail. At MedMen, he oversaw retail operations for all retail locations in California, Nevada, Arizona, Florida, Illinois, New York, and Massachusetts. MedMen drew national praise for its innovative and compliant operations while David was at the helm. At Cookies, David oversees operations at all Cookies retail locations. He is personally involved in developing Cookies operating procedures and training protocols for all stores. He understands the importance of balancing compliant operations with an experiential shopping destination. In order to stay up to date with best practices, he attends industry conferences and regularly consults with peers at other commercial cannabis businesses. Once a year, Cookies reviews its operations with third party consultants to identify areas in which it can improve its operations. We have learned invaluable lessons from our years of experience and continue to innovate the cannabis shopping experience. We are eager to apply our innovative approach to dispensary operations that is not only compliant, but best in its class, in the City of Fresno. LOCALLY OWNED AND OPERATED Although Cookies is a global brand, we are a locally owned business. Fresno resident, Kacey Auston, is the majority shareholder of Lemonnade Fresno. Kacey was born and raised in Fresno and cares deeply about her community and fights for its future. The hardships Kacey faced in Fresno as a single mother have shaped her career. Like many in the area, Kacey, then 23 years old, found herself struggling to survive. For five years, she worked full time and found odd jobs on the weekends. She knew if she wanted to provide a better life for her family and others, it would take hard work and creativity. Always an entrepreneur at heart, in 2005, Kacey made the life-changing decision to bet on herself to become an advocate for others and launched Auston Consulting. Through her consultancy, she has worked to connect businesses with local governments, achieving client goals that were in the best interests of the Fresno community. By believing in herself, working hard, and following through on a creative vision, Kacey was able to provide a better future for her children and a better future for Fresno. When Fresno announced its intention to regulate cannabis, Kacey wanted the city to select operators that would love and support Fresno the same way she does. In order to find a good operator for Fresno, she employed the same test she uses to evaluate clients of her consultancy: they must share her belief in livable wages and employee benefits, and they must support the Fresno community. In Cookies, she found a match to both. From their first meeting, she saw a team that embraced community benefit, employee support, and what it means to be a Fresnan. Kacey is excited to partner with Cookies and introduce Lemonnade to Fresno. Fresno is not only her home, it is where she has advocated for her community while raising her family and maintaining a business. Kacey has dedicated her life to creating a strong economic future for her children and grandchildren. She has found a strong partner in Cookies through its business plan, commitment to equity, and community engagement. Her work with Cookies is not only an investment for her family, it is also an investment in the community that she loves and has built her life around. COMPLIANCE PROGRAM Our experienced ownership team realizes that successfully operating any business starts with regulatory compliance. Regulatory compliance ensures uninterrupted operations and Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 42 a productive and safe working environment for employees. This is particularly important in the cannabis industry, where regulatory frameworks are complex and evolving and unlicensed operators are thriving. At Lemonnade, all employees will be taught to appreciate the importance of compliance by taking a top-down approach, i.e., providing compliance-related education and training to all employees, from the most junior to the most senior. We will operate our Fresno dispensary in compliance with the regulations promulgated by the California Bureau of Cannabis Control (“BCC”) and the City of Fresno (“City”) and all other applicable rules and regulations. To ensure compliance, we have invested in hiring a full-time experienced Director of Compliance. Our Director of Compliance Aaron Herzberg is a seven-year compliance professional who has implemented successful compliance programs for renowned dispensaries including Bud and Bloom in Orange County and OC3 in Santa Ana. The Director of Compliance will be responsible for developing compliance plans and training materials for all staff and will perform unannounced audits and spot checks to ensure operations comply with regulations. As needed, we will bring in third-party compliance auditors or legal counsel to review operations. We will also maintain compliance with State and local building, fire, and zoning requirements or regulations. No construction will occur without verifying compliance with state and local codes and without first obtaining permits. Further, we will not make a physical change, alteration, or modification of our premises that materially or substantially alters the premises or the use of the premises from the Premises Diagram originally filed, without approval from the City and the BCC. 16 CCR § 5027(a). If our premises (or the use of our premises) is to be materially or substantially changed, we will submit a written request for premises modification to the BCC. 16 CCR § 5027(a). The modification request will be submitted to the BCC using the Notification Request Form and will include a new Premises Diagram and the associated fee. 16 CCR § 5027(c). We will also provide any other documentation requested by the BCC to evaluate the modification request. 16 CCR § 5027(d). We will not materially or substantially change our premises unless and until we receive approval from the BCC, and we will ensure the property remains in compliance with applicable codes. STANDARD OPERATING PROCEDURES To standardize company policies and procedures and to ensure compliance with all applicable government regulations and industry best practices, we will operate our Fresno dispensary under a documented system of standard operating procedures (“SOPs”). There will be written SOPs to govern the major steps of all aspects of our business, including but not limited to recordkeeping, sales, inventory, quality control, security, and communicating with regulators. We will maintain copies of all current and prior SOPs on the premises and provide copies to regulators upon request. 16 CCR § 5023(a). Copies of our SOPs will be maintained in the back office both electronically and in hard-copy form. To ensure sensitive information remains confidential, electronic copies of the SOPs will be secured via password-protection, and hard copies will be stored in a locked, fire-proof filing cabinet. Our SOPs will be accessible only to dispensary employees; management will further restrict access according to employee roles and responsibilities as needed for security purposes by providing unique keys and/or passwords to certain employees. Dispensary employees will have ready access to relevant SOPs via tablets in the retail area, and management will produce our SOPs in either electronic or hard-copy form for regulators immediately upon request. We will review our SOPs at least quarterly from the issue date of our license and update as needed due to changes in industry standards or as requested by the City or the BCC. Our executive team will review SOPs at their annual meeting. The Chief Operating Officer and Director of Compliance will present proposed changes to the SOPs for consideration, and the executive team will incorporate changes to the SOPs due to changes in industry standards or as requested by the City or the BCC. At Lemonnade, we have unrivaled in-house compliance experience. Our Director of Compliance Aaron Herzberg has developed and implemented cannabis standard operating procedures for a premier multi-state cannabis operator and has overseen operations at multiple licensed cannabis dispensaries in California. Our written SOPs will include, but will not be limited to, the procedures summarized in this section. We will provide the City and the BCC with any requested information within 24 hours, unless otherwise specified by the requesting regulator. 16 CCR § 5011; FMC § 9-3331(c). EXAMPLES WHERE PRACTICES HAVE WORKED Our Cookies family has a track record of successful, profitable, and compliant dispensary operations. This experience allows us to standardize company policies and procedures and streamline operations across all our locations in California, including Los Angeles, San Francisco, Oakland, Maywood, Modesto, and Redding. To the extent possible within the frameworks of each local jurisdiction’s specific regulatory requirements, we employ the same compliant operations and industry best practices at each of these locations. More importantly, none of our existing locations have ever failed a regulatory compliance audit or been disciplined by a regulatory agency. This history of compliance and clean track record evidence our successful implementation of the policies and procedures described in this section. Moreover, we have compliantly operated cannabis dispensaries in diverse neighborhoods and have served diverse populations, which has not only helped inform our universal SOPs, but also has provided experience in tailoring those SOPs to each unique location’s needs. This experience Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 43 is a testament to our ability to successfully implement and refine our policies and procedures in any locality. EMERGENCY PREPAREDNESS We understand the necessity of preparation for and flexibility in the face of an emergency. Our ability to quickly and effectively adapt our procedures during a time of need is evidenced by our responsiveness to the Coronavirus pandemic at our existing dispensaries in California, including developing a COVID Prevention Policy, taking precautions to preserve the cleanliness of our facility and the health and safety of our employees, and working with the BCC and local regulators to begin offering curbside pickup and delivery at our dispensaries where delivery had not previously been offered. We are similarly committed to supporting our Fresno community during this and any other emergency. COVID-19 RESPONSE. At Cookies, we have modified our operations to comply with COVID-19 guidance issued by the Centers for Disease Control and Prevention, Cal-OSHA, and the Department of Public Health. We will continue utilizing COVID-19 procedures for as long as health officials deem necessary. CURBSIDE PICKUP MASKS FOR STAFF GLOVES FOR STAFF CUSTOMER HAND SANITIZER MARKINGS FOR SOCIAL DISTANCING AND OCCUPANCY LIMITS NOTIFICATION TO CUSTOMERS ON DISTANCING Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 44 CUSTOMER CHECK-IN PROCEDURES AGE AND IDENTITY VERIFICATION At Lemonnade, we will only sell cannabis to adult-use customers that have been verified to be over the age of 21 and medical patients that have been verified to be over the age of 18. 16 CCR § 5404(a)–(b); FMC § 9-3309(i)(4). We appreciate the public health interest in ensuring that minors do not access cannabis and take this responsibility seriously. We are also aware that young adults who are not yet of legal age may attempt to patronize our dispensary. Thus, we have implemented several policies to ensure that only individuals who are at least 21 years old or at least 18 years old with a valid doctor’s recommendation and/or Medical Marijuana Card can enter our dispensary and purchase cannabis. 16 CCR § 5400; FMC § 9-3309(i). To ensure purchasers are of legal age, customers will be required to show government-issued identification and, if applicable, doctor’s recommendation or medical card both: (i) to gain access to our dispensary; and (ii) at the point-of-sale station at the time of purchase. 16 CCR § 5402(a), 5404(a)–(b); FMC § 9-3309(i). All customers will enter our premises through the same entry point and lobby, and six-foot social distancing guidelines will be enforced. This ensures that customers cannot access the retail area without undergoing age verification. Moreover, the sales room entrance door cannot be unlocked from the lobby without our Receptionist “buzzing in” the customer. Upon entering the dispensary lobby, and before accessing the retail area, each individual will be greeted by our well-trained Receptionist, who will politely explain that age and identity verification are required to enter the retail area. We will also prominently post notices at the entrance to the dispensary stating that no person under the age of 21 (except a medical patient over the age of 18) is permitted on the premises. FMC § 9-3307(i). When inspecting customer identification, the Receptionist will confirm the date of birth to ensure customers are of legal age and will conduct a visual examination to confirm the height and the hair and eye color stated on the identification document are consistent with the actual appearance of the customer. (If necessary, the Receptionist will ask customers to remove hats and glasses.) The Receptionist will also visually confirm that the identification card is unexpired and contains a photograph of the customer. The Receptionist will use a mobile scanner device that is compatible with our COVA point-of-sale system to scan magnetic strips to confirm authenticity of identifications and a black light to check for applicable license logos. Further, we recognize that some customers will not be United States citizens and will present alternative proof of age and identity, such as passports. To facilitate verification of identifications from the United States and abroad, we will train our employees on the identity verification procedures contained in both the ID Checking Guide, U.S. & Canada Edition and the ID Checking Guide, International Edition and will maintain copies of each guide at reception and each register for employees to reference on-the-job. Management will review these materials at least annually to ensure that we possess the latest edition with the most up-to-date rules and guidance. If an employee suspects a customer is presenting false or misleading documentation, the employee will deny the customer access to the facility. If necessary, a manager will be available to review the identification presented. The manager will retain ultimate authority to either admit or turn away the customer. Management may refer the matter to law enforcement. We will require management err on being overly cautious with the forms of identification presented. The Receptionist will verify patient and/or caregiver status by confirming the medical recommendations via the third-party verification website listed on the recommendation and/or calling the doctor, reviewing and scanning any caregiver paperwork, and designating any caregiver in the patient’s profile in the point-of-sale system. Under no circumstances will we provide doctor recommendations at our dispensary. FMC § 9-3310(a)(2). To ensure safety, we will supply our Receptionist with a face mask, gloves, a protective barrier, and hand sanitizer. LOBBY SIGNAGE AND EDUCATION Our lobby will be designed as an educational touch point with readily available information about state and local cannabis regulations, an explanation of the customer experience upon entering the sales area, and educational materials on current product offerings. Our lobby will also feature required signage. For example, we will prominently post notices inside the lobby stating that no minors are permitted on the premises. FMC § 9-3307(i). Further, we will display signage reminding customers that consumption of cannabis is prohibited in public, including on or near our premises. FMC § 9-3307(h)(3). In addition to the signage stating prohibited activities, we will conspicuously display our state and local licenses in the lobby. 16 CCR § 5039; FMC § 9-3309(k). All signage will be written in English but may be translated to or displayed in different languages as needed and/or required by regulators. We will also include signage in Spanish in light of Fresno’s population demographics. ENTRY CONTROL BUZZER SYSTEM The entrance to the dispensary sales floor will be locked at all times, and entry will be strictly controlled via a buzzer system. FMC § 9-3310(a)(4). Once customers have been properly checked in, the Receptionist will grant the customer access to the retail sales area using the buzzer system, which will disengage the door-locking mechanism with a sound. All entry doors will remain operable from the inside to allow for egress without the use of a key. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 45 SUPERVISED, SUPPORTIVE SHOPPING To ensure adequate monitoring of the retail area and as a means of offering personalized, on-demand customer service, we will ensure a constant one-to-one customer-to-employee ratio in the retail area. This is necessary for two reasons. The first is for loss prevention. Having an employee supervise the customer reduces the risk of diversion and loss. It should be noted though that all packaging on the sales floor is empty and does not contain cannabis. The second is to provide customers, especially first-time customers, with a trained cannabis expert who can educate the customer and answer any questions the customer may have during the retail experience. Our employees will comply with social distance guidelines. Our staff will receive comprehensive training on products, onset times, and ingestion methods. Our goal is to have our employees be active listeners, taking their time with each customer to find products that work for them. This enables us to develop an ongoing conversation with customers to continue to educate and empower them on each visit to make the best decisions regarding their use of cannabis products. Staff will also be trained to detect signs of impairment and to immediately report to management if they encounter an intoxicated customer. We will implement safeguards to ensure this policy is adhered to. The first will be that the Receptionist will control customer flow to the sales area. The retail sales area will not be accessible to the customer until the Receptionist unlocks the door via an electronic switch. FMC § 9-3310(a)(4). The Receptionist will verify there is an available sales employee to serve the customer. The second will be that at least three employees will be assigned to the retail area at all times to ensure that the retail area remains adequately supervised while other employees are assisting customers or performing duties away from the retail area. If necessary, employees may escort any customers from the retail area to the lobby to be supervised by the Receptionist until the retail area can be adequately staffed. After perusing our product selection, customers will check out at one of the point-of-sale locations as described in the Processing Sales section, below. RESTROOM ACCESS We understand that all restrooms need to remain locked and under the control of management. FMC § 9-3310(a)(6). We will have one restroom accessible through the retail area that will remain locked at all times. Should a customer need to use the restroom during the shopping experience, a member of management will be called to the retail area to unlock the restroom door and allow the customer entry. The restroom door will lock automatically behind the customer upon exiting the restroom. Similarly, if a non-managerial employee needs to use the restroom, they will need management to grant them access; however, employees will utilize separate designated restrooms on the second floor, off of the employee break room. LOCATION AND PROCEDURES FOR RECEIVING DELIVERIES DURING BUSINESS HOURS RECEIVING DELIVERY LOCATION We will instruct all distribution drivers to enter the dispensary parking lot from Wishon Avenue and to park in the designated van accessible loading area, which will be inconspicuous and separated from the public roadway by the dispensary building exterior along one side and by professionally maintained landscaping along the other. Distribution drivers will be escorted by security through the main entrance to sign in at reception before returning to their vehicle to begin the unloading process. We will receive deliveries at the rear, non-public doorway. We will not use the public-facing front entryway for receiving deliveries. The rear doorway provides ample security for receiving deliveries, including commercial-grade locks, chip-activated key card access control, and security cameras, and provides private access to the intake area and secured storage room. Our Inventory Manager will inspect shipments in the intake area before moving accepted inventory into the secured storage room. The loading area, rear doorway, and shipment intake area will be monitored and recorded 24 hours per day by the video surveillance system, and at no time will cannabis shipments enter our facility through a publicly available entrance or exit. 16 CCR § 5422(c). RECEIVING DELIVERY PROCEDURES Our shipment intake policies have been developed to ensure the secure, accurate receipt and recording of cannabis goods shipments from licensed distributors. 16 CCR § 5422(a). Upon placing an order with a California-licensed cannabis business, we will coordinate with a licensed distributor to schedule a shipment with at least 72 hours’ notice. Deliveries will Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 46 only be accepted if they are scheduled in advance within our hours of operation. While scheduling deliveries in advance enables us to be fully prepared to safely receive shipments when they arrive, advance notice without having additional safeguards could increase the risk of theft at the time of shipment delivery. That is why shipment delivery dates will be kept confidential between the distributor and our management team, and the time of delivery will not be provided to us until the day that the delivery is scheduled to arrive. Knowledge of scheduled delivery times will be maintained only by the General Manager, Inventory Manager, security guards, and the licensed distributor. To afford our security team and managers time to prepare to receive shipments, we require that distribution drivers call us 30 minutes prior to arrival and again when the driver parks at our facility. Upon arrival, our security guard will greet the driver and will remain in the driver’s presence until the delivery has been completed and the driver leaves our facility. If the driver is not parked in the designated loading area, the security guard will direct them to park in the loading area. The guard will then escort the driver to the lobby to sign in. Once the distributor agent is on site in the lobby, our Inventory Manager or security guard will request a METRC shipping manifest to check its validity and to confirm that Lemonnade’s’ license number is present on the manifest. Once verified, the distributor agent, who will remain supervised at all times, will be escorted to reception, where the agent will sign in on our visitor log and will be provided with a visitor’s badge that must be worn at all times within our facility. We will collect and maintain in our visitor log: (i) the name of the agent; (ii) the company the agent works for or is affiliated with; (iii) the reason the agent will enter any limited-access areas; (iv) the date of the visit; and (v) the times the individual entered and exited any limited-access areas. 16 CCR § 5042(d). SHIPMENT INSPECTION When a shipment arrives, after the distribution delivery driver signs in, our security guard will radio our Inventory Manager, who will meet the security guard and distributor agent in the intake area to inspect the shipment. For additional security throughout the inspection process, the Inventory Manager will carry an iPad displaying our live surveillance footage and will periodically check the footage for suspicious activity. The Inventory Manager will then proceed to inspect shipments for accuracy and for quality. For Track-and-Trace and accounting purposes, the Inventory Manager will check the contents of each shipment to verify that it contains all of and only cannabis goods listed on the sales invoice or receipt. Additionally, the Inventory Manager will ensure that the cannabis goods have not been damaged, have compliant labels, and are not expired. We will reject cannabis goods that are: (i) not accurately reflected on the sales invoice or receipt; (ii) damaged; (iii) non-compliant with labeling requirements; or (iv) expired. When a shipping manifest includes several line items, the Inventory Manager may choose to reject one or more of the line items that are defective or do not accurately reflect our order by ticking the appropriate “reject package” box on the shipping manifest within METRC. Furthermore, if the number of items ordered does not reflect the number of items received in a shipment, the Inventory Manager will document the actual number of items received in METRC. Once an order is deemed acceptable by the Inventory Manager, the Inventory Manager and distributor agent will each sign two copies of the final shipping manifest. We will maintain one copy on file with a copy of the corresponding shipment invoice, and the other copy will be provided to the distribution driver. The distribution driver will then be escorted to reception by our security guard (who accompanies the driver throughout their visit), where the driver will return their visitor badge and sign out on our visitor log. The shipment inspection process will be recorded by our video surveillance system. 16 CCR § 5044(d). After a cannabis delivery has been accepted, the goods will be handled as described in the Product Handling Procedures section, below. NAME OF POINT-OF-SALE SYSTEM AND NUMBER OF POINT-OF-SALE LOCATIONS Sales will be processed using the COVA point-of-sale system at one of our seven point-of-sale locations, all of which will be under video surveillance. The point-of-sale locations will be at the service counter in the retail area. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 47 ESTIMATED NUMBER OF CUSTOMERS TO BE SERVED PER HOUR/DAY We estimate that our Fresno dispensary will serve 18 customers per hour and 250 customers per day. The estimates are based on other Cookies store locations and populations of similar size to Fresno and Fresno County. PROPOSED PRODUCT LINE AND ESTIMATED PERCENTAGE OF SALES While Cookies is best known for its innovative and exclusive merchandise, we recognize that our potential product offering is not without limits. As such, our first priority in establishing our product lines will be to ensure that our inventory selection remains compliant with all state and local regulations regarding prohibited product types and potency limits. In Fresno, we will not sell: (i) alcoholic beverages (or goods labeled with terms that would create a misleading impression that the product is an alcoholic beverage) (16 CCR § 5025(d), 5040.1; FMC § 9-3309(b)); (ii) tobacco products (FMC § 9-3309(c)); (iii) edible cannabis products exceeding 10 milligrams of THC per serving or 100 milligrams of THC per package (except for orally dissolving medical products, which may contain up to 500 milligrams of THC per package); (iv) non-edible cannabis products exceeding 1,000 milligrams of THC per package for adult-use products and 2,000 milligrams of THC per package for medical products; or (v) cannabis goods designated as “For Medical Use Only,” to any person other than a verified medical customer (16 CCR § 5032(e)). The products that we will offer for sale include flower, pre-rolls, concentrates, vape pens and cartridges, edibles, infused beverages, topicals, tinctures, capsules, suppositories, bath bombs, and branded accessories. Moreover, we consider ourselves a lifestyle brand, not just a cannabis brand. As such, we will emphasize sales of our non-cannabis merchandise, including t-shirts, hoodies, hats, backpacks, trays, keychains, shoes, rolling papers, candles, and batteries. A breakdown of our proposed product line is below. We estimate that our sales will consist of 65% cannabis flower and 1.5% cannabis pre-rolls. Manufactured cannabis products will constitute 29.9% of sales of all cannabis goods. Manufactured cannabis products can be further divided into concentrates and vapes (15.7%), edibles (13%), and topicals (1.2%). A more detailed breakdown of cannabis goods sales is included in our pro forma. Additionally, accessories and clothing from Cookies and our highly coveted lifestyle brands will account for 3.6%. Please note that sales of accessories and clothing have been omitted from gross revenue when calculating percentage of sales. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 48 Flower • Cookies is known for its cannabis flower. Our curated cannabis inventory will feature high-quality, laboratory-tested cannabis at all price points from our family of Cookies brands. THC content on cannabis will range from 10% to 35%. Cannabis flower varieties will include indica, sativa, and hybrid. Pre-Rolls • Lemonnade will carry pre-roll joints from its Cookies, Runtz, and social equity brand Grandiflora. We also carry pre-rolls from popular California brands like West Cost Cure. THC content will range from 10% to 35%. Cannabis varieties will include indica, sativa, and hybrid. Concentrates • Lemonnade will carry concentrates like badder and resin. Lemonnade will carry concentrates under the Cookies, Minntz, and Grandiflora brand. It will also carry concentrates from California brands like Stiiizy, Raw Garden, and 710 labs. Vapes • Lemonnade does not carry disposable vape pens. Oil Cartridges or Pods • An oil cartridges or pod is a pre-filled container of cannabis oil or concentrate designed for use with a reusable e-cigarette or vape rig. Cookies will carry oil cartridges in its Cookies, Lemmonade, and Minntz brands. THC content of oil cartridges ranges from 35% to 90%. Edibles • Edibles are a food infused with cannabinoids. Cannabis edibles come in many forms, including brownies, cookies, gummies, and mints. Lemonnade will carry a variety of edible products from licensed California cannabis businesses, including Wyld, Plus Products, and Raw Garden. Cannabis edibles typically contain 5–10 milligrams of THC per serving, with a maximum of 100 milligrams of THC per edible cannabis good. Beverages • Cannabis-infused beverages include seltzers, sodas, non-alcoholic “hoppy water,” and other drinks. Cannabis-infused beverages contain 5–10 milligrams of THC. Lemonnade will carry licensed California brands like Keef beverages, Cannabis Quenchers, and Hifi Hops. Topicals • Topicals are cannabis-infused lotions, balms, and oils that are absorbed through the skin for localized relief of pain, soreness, and inflammation. Because they are non-intoxicating, topicals are often chosen by patients who want the therapeutic benefits of cannabis without the cerebral euphoria associated with other delivery methods. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 49 TOP-SELLING PRODUCTS AND BRANDS Since its inception under Prop 215, Cookies has earned a reputation for exotic cannabis strains: a reputation Cookies and its family of brands upholds with cannabis connoisseurs by pushing the industry to favor rich terpene profiles over simple cannabinoid concentrations, and in the process, garnering tasting notes on par with the finest California wines. Under MAUCRUSA, Cookies and its family of brands carefully brought its stable of high-quality genetics from indoor controlled-environment agriculture settings to state-of-the-art greenhouses, allowing Cookies to offer its genetics at both premium and accessible price points. Whereas Cookies’ indoor-grown flower retails at up to for an 1/8 oz., the same strain is available to consumers under the Sungrown offering starting at 1/8 oz. before taxes. Additionally, Cookies offers Highlights: pre-rolls and pre-roll packs which allows customers to sample multiple of its prized strains. Below is a list of the top 10 best-selling products at the average Cookies dispensary. Cookies is proud to say its best-sellers are all flower and all proprietary Cookies or Cookies family brands. In fact, Cookies and Cookies family brands constitute approximately 70% of total sales. ALL PRODUCTS ACCESSIBLE TO CUSTOMERS ARE DISPLAY ONLY AND DO NOT CONTAIN CANNABIS. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 50 Gary Payton | Eighths: SALES 7% A unique strain named after the legendary Seattle SuperSonics and Hall of Fame player Gary Payton. This strain was bred by Powerzzzup genetics and is a cross between Snowman x The Y. The aroma is heavy but smooth, with some fruit and reminiscent of gas and rubber. The resulting effect is deep relaxation in the body, without sedating the mind. Cereal Milk | Eighths: SALES 6% Cereal Milk is a cross between Snowman x Y-life. Like sipping down the last bit of milk at the bottom of your cereal bowl, you’ll taste sweet fruity cream all the way through the exhale. This strain offers a happy cerebral feeling paired with a relaxed body feel. Londonchello #10: SALES 3% A perfect marriage between Lemonchello 10 x London Pound Cake 97, this Cookies/Lemonnade collaboration smells like a berry lemonade, both sweet and tart. The effect is a functional but potent head-high. Georgia Pie | Eighths: SALES 2% A Cookies original, Georgia Pie is a cross of KM11 x Cookies’ own Gelatti. With a sweet and pungent aroma, with a minty aftertaste, Georgia Pie delivers a creative and energetic rush. Jealousy – Indoor | Eighths: SALES: 2% A Gelato 41 crossed with Sunset bx1, by Seed Junky Genetics in collaboration with Cookies, Jealousy buds have a dark purple hue and a frosty shine, which boast calming and uplifting qualities. The flavors are a balanced blend of creamy, funky, and sweet. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 51 Grenadine | Eighths: SALES: 2% Like Londonchello, Grenadine traces its genetics to Lemonchello 10 and London Poundcake 97. In this iteration, a thick, sweet pomegranate and cherry flavor has a happy and uplifting effect. London Poundcake 75 | Eighths: SALES: 2% London Pound Cake 75 was grown for its unique appearance, aroma, and taste. Like nothing you’ve smelled or tasted before, these dark green and purple nugs will overwhelm your senses with a gassy, sweet, blueberry and lemongrass aroma and flavor. A perfect hybrid for any time of day. London Pound Cake 75 comes from a cross between Nepali OG x Sunset Sherbert. London Pound Minntz | Eighths: SALES: 1% A collaboration between Cookies and the renowned breeder Seed Junky Genetics, London Pound Minntz is an indica-dominant hybrid strain created through crossing the delicious Sunset Sherbet with another indica-heavy hybrid strain. Named for its insanely delicious flavor, London Pound Minntz packs a sweet berry and grape flavor accented by nutty lemon and citrus. Berry Pie | Eighths: SALES: 1% Working with London Pound Cake 75 and Kush Mints 11, Cookies and Seed Junky Genetics bred Berry Pie. The strain smells of blueberry and waffle batter, with undertones of cream, and a floral finish. The effect is euphoric and slightly stimulating. Pink Rozay | Eighths: SALES: 1% Starting with Lemonchello 10 and London Pound Cake 97, Cookies brought out aromas that evoke a sparkling rosé: bright, floral, with a hint of yeast and a smooth velvety finish. Pink Rozay relaxes the body and mind. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 52 At Cookies, our commitment to and investment in prized, unique genetics echoes throughout our dispensaries’ offerings. While Cookies’ genetics inform our flower and concentrate products, our obsession with quality, expertly grown cannabis means our dispensaries can only sell (and offer our seal of approval to) other cannabis products that meet our own stringent standards. TOP 10 SELLING BRANDS IN ORDER 40% 9.4%6%3.4% 3.4%3.3%2.7% 2.1%1.9%1.6% In addition to cannabis, we will sell a variety of manufactured cannabis goods. Manufactured cannabis goods include edibles (gummies, cookies, and savory snacks), concentrates (vaporizes, cartridges, and various oils, waxes, and crumbles), and topicals and tinctures. We will curate a variety of manufactured cannabis goods to meet a variety of customer needs and price points. In addition to our top selling baked goods like Cookies, we will carry well-known brands such as Kanha and Wyld for edibles, Stiiizy and Raw Garden for extracts, and Papa & Barkley and Mary’s Medicinals for wellness products. PRODUCT HANDLING PROCEDURES We have developed comprehensive procedures to ensure that our products are properly handled from product intake to customer sale. Our product handling procedures as they relate to receiving deliveries are described in the Receiving Deliveries section, above. After a cannabis goods delivery has been received and accepted, the goods will be handled as described in this section. POINT-OF-SALE SYSTEM For our inventory management and point-of-sale system, we will be using COVA, a real-time, web-based system that is compatible with the City’s recordkeeping systems (FMC § 9-3309(e)) and seamlessly integrates with the State’s Track-and-Trace system so that regulators will be able to easily access information shared through the point-of-sale system at any time. COVA will allow us to track and report on all aspects of our Fresno dispensary’s business, including cannabis tracking, inventory data, gross sales (by weight and by sale), and other information deemed necessary by the City. FMC § 9-3309(e). COVA will also allow us to produce historical transactional data for review. FMC § 9-3309(e). Moreover, we will utilize hardware (e.g., label printers, barcode scanners) approved by and compatible with COVA to effortlessly track these inventory statistics via automated data entry. All dispensary sales and other significant inventory events will be automatically tracked and reported to Track-and-Trace via the COVA system; however, we will train authorized Track-and-Trace users to manually enter data into Track-and-Trace in case there are technical difficulties with syncing. Information documented using COVA will be provided to regulators immediately upon request. For more information on our inventory tracking systems, see the Inventory Control Procedures section, below. INVENTORY STORAGE After receiving inventory shipments as described above, we will store the inventory inside our premises in secured, locked limited-access areas to which customers, vendors, and visitors will not have access. 16 CCR § 5033(a)–(b); FMC § 9-3309(d). When the dispensary is closed, all cannabis will be stored in the secured storage room. We will not store any cannabis goods on the retail sales floor besides the products that are available for customer inspection, which will be secured in sealed containers. At the end of each day, any cannabis products remaining on the retail sales floor behind the service counter will be moved back into the secured storage room. We will track the movement of cannabis goods between storage and the sales floor using “Inventory” and “Live” designations in the COVA system. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 53 We will ensure that the oldest stock of a cannabis product is distributed first by storing all cannabis goods using the first-in, first-out (“FIFO”) method. Further, our point-of-sale system, COVA, will track product expiration dates and alert management as these dates approach so that we can prioritize sale of these products. Cannabis goods will be stored under appropriate conditions to ensure that their packaging, strength, quality, and purity are not adversely affected. Management will routinely check temperature and humidity monitors to ensure that the cannabis storage room remains below 70 degrees Fahrenheit and at 60% relative humidity. We will utilize and maintain an HVAC system to ensure proper environmental conditions for inventory storage. Furthermore, the secured storage room door will remain closed when not in use to prevent the entry of heat, light, and unwanted environmental contaminants that might compromise the integrity of the inventory. Cannabis storage areas and equipment will be maintained in a clean and sanitary condition. Management will develop schedules with appropriate cleaning materials and methods to be used in each area of the facility. The cannabis storage areas will be cleaned during daily inventory counts and as needed. The staff member who cleans the cannabis storage area will record the task by signing and dating the associated cleaning log. Cleaning products will be clearly labeled and stored in the janitor’s closet away from any cannabis goods. All labeled directions will be followed when using cleaning products. CUSTOMER INSPECTION SAMPLES To aid customers in choosing the cannabis goods that will satisfy their individual needs and quality expectations, we will make cannabis goods available for supervised customer inspection in the retail area. 16 CCR § 5405(a). However, to prevent theft, we will not keep live cannabis goods on the floor. Instead, we will utilize dummy packaging. Furthermore, customers cannot access cannabis goods and inspection containers without assistance from a dispensary employee. 16 CCR § 5405(b). Due to COVID-19, we have suspended customer inspection of cannabis. Under normal circumstances, we will display our cannabis flower in the retail area in sealed jars that are tethered to an inspection table by cables made of strong load bearing 304 stainless steel with galvanized plastic coating. The jars can be twisted to allow for customers to smell the product. Signage will be conspicuously posted to inform customers that they must ask a dispensary employee for assistance to inspect a sample. Upon request, a dispensary employee may present an inspection container to the customer—the inspection container will never leave the employee’s hands and will remain tethered to the inspection table at all times. 16 CCR § 5405(b). We will further prevent customer access to inspection samples by enforcing the company policy of a constant one-to-one customer-to-employee ratio in the retail area. Secure rolling rack storage behind the counter holds live inventory; all product packaging on the retail floor is display only and does not contain cannabis. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 54 Pictures illustrating our customer inspection container tethering system are included below: PROCESSING SALES Customers will order cannabis goods on the retail floor on an iPad operated by a dispensary employee. Dispensary employees will process customer sales at the registers in the retail area under full video surveillance. At each point-of-sale location, camera placement will 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. 16 CCR § 5044(e). Each point-of-sale location will have a dedicated security camera. FMC § 9-3310(b)(1)(viii)(6). Each of the seven registers will be equipped with COVA point-of-sale software, which will facilitate compliance with daily sales limits, record identifying information about the customer and their purchase history (if consented to by the customer), and seamlessly integrate with the State of California’s Track-and-Trace system. We will discontinue dispensary operations if either the point-of-sale system or the State’s Track-and-Trace system is inoperative. Management will train dispensary employees to process customer sales using the COVA point-of-sale system in compliance with regulatory requirements. When a customer is ready to make a purchase, the dispensary employee will direct the customer to the service counter in the retail area, where a designated employee will re-verify the customer’s age and identity using the procedures described in the Age and Identity Verification section, above. FMC § 9-3310(a)(3). The customer will have their identity re-verified and order confirmed at the service counter prior to making a purchase. Once an order is entered on the iPad, the order will then become accessible to the Inventory Manager, who will immediately gather the items listed on the order from storage and will inspect each good to ensure that: (i) the good has not exceeded its best-by, sell-by, or expiration date; (ii) the packaging is intact and unopened; and (iii) the labeling is intact and legible. The Inventory Manager will then take the ordered products to the designated employee at the service counter, who will check the items against the order to ensure it has been correctly fulfilled. The employee at the service counter will then scan or manually enter each item into the point-of-sale system and will enter the following information into Track-and-Trace: (i) name and type of cannabis goods; (ii) UID of cannabis goods; (iii) amount of cannabis goods, by weight or count; (iv) date and time of sale; and (v) any other information required by the BCC or any other applicable licensing authorities. 16 CCR § 5049(b). If the customer consents to the recording of their personal information, the employee will also record the sale in the customer’s profile in the point-of-sale system, so that cannabis goods sold by Lemonnade can be tracked in the event of a product recall. We will not sell more than 28.5 grams of non-concentrated cannabis, 8 grams of cannabis concentrate, or 6 immature cannabis plants to an individual adult-use customer in a single day. 16 CCR § 5409(a). We will not sell more than 8 ounces of medical cannabis to an individual medical cannabis patient (or authorized primary caregiver for each patient they are authorized to make purchases for) in a single day, unless the patient or caregiver presents a physician’s recommendation stating that 8 ounces does not meet the daily requirement of the patient’s needs, in which case the patient or caregiver can purchase no more than the amount recommended by the physician and documented in the physician’s recommendation. 16 CCR § 5409(b)–(c). We will not allow customers to combine the adult-use and medical limits to purchase cannabis goods in excess of these limits. 16 CCR § 5409(d). Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 55 Prior to finalizing the sale, the employee at the service counter will verify the customer is not intoxicated, offer any appropriate customer education or support materials, and remind the customer that consumption of cannabis is prohibited in public, including on or near Lemonnade’ premises. We will not sell cannabis goods to customers who appear to be intoxicated. EXIT PACKAGING All cannabis goods purchased by a customer will be placed in opaque exit packaging prior to leaving our premises. 16 CCR § 5413(c). Opaque exit bags ensure that the contents of the customer’s purchase remain undetectable. Further, included in each exit bag will be an insert card reminding customers that public consumption of cannabis is prohibited. ON-SITE CONSUMPTION PROHIBITION Consumption of cannabis will be strictly prohibited on or near our premises. Dispensary employees will instruct customers that they must leave the premises with the unopened cannabis goods inside of the opaque exit packaging provided at the point of sale, and that under no circumstances may the cannabis goods be opened or consumed on or near the premises. As a reminder, we will visibly post at the customer entrance a clear and legible notice indicating that consuming cannabis on or near the premises is prohibited. FMC § 9-3307(h)(3). CUSTOMER RETURNS At Cookies, customer safety and satisfaction are of utmost importance. As experienced dispensary operators, we have learned that a flexible and realistic return policy can be crucial to a customer’s experience—even if this entails a financial loss for Lemonnade. As such, we will accept returns of cannabis goods on a case-by-case basis. Alternatively, we will allow customers to exchange defective cannabis products that were previously sold at the premises for a non-defective version of the same type of cannabis product. Any such returns or exchanges will only be allowed within 30 days from the original date of sale. If an employee receives a return request from a customer, the employee will relay the request to management. Management will check the customer’s purchase history in the point-of-sale system or will require the customer to provide a physical receipt (if purchase history is unavailable) to verify that the goods were purchased within the past 30 days and were originally sold by Lemonnade. If management cannot locate the original sale in the point-of-sale system and the customer does not have a physical receipt, or if the timeframe for returning or exchanging the product has elapsed, management will explain to the customer that the return or exchange cannot be processed. If management approves a return, an authorized user will record the following details about the returned product in the point-of-sale system and Track-and-Trace: (i) the name and type of cannabis goods returned; (ii) the UIDs of cannabis goods returned; (iii) the amount (by weight or count) of cannabis goods returned; and (iv) the date and time of the return. 16 CCR § 5049(b). Management will immediately place the returned goods in the cannabis waste storage area of the secured storage room (a reinforced limited-access area), where they will be quarantined until they can be rendered into cannabis waste (i.e., destroyed) and hauled to an allowed solid waste facility (16 CCR § 5410(c)), unless the returned goods are defective manufactured cannabis products, in which case they may be returned to the distributor from whom they were obtained (16 CCR § 5410(e)). RECALLS We have written policies and procedures on mandatory and voluntary recalls of cannabis products. Our recall procedures are based on FDA guidance. We will assemble a Recall Response Team to efficiently and effectively communicate recall information within the company and to regulators, law enforcement, and impacted vendors and customers. To facilitate identification of defective or potentially defective cannabis products, we will maintain open channels of communication with both customers and vendors (i.e., to receive customer complaints or notice of a recall). We will also perform internal quality control inspections for potential defects, both during inventory reconciliations and prior to sale to customers. Moreover, all employees will be trained to identify potentially defective products and immediately communicate potential defects to management. To ensure communication of recall information to relevant parties, our recall procedures include: (i) procedures for communicating with the City, the BCC, the Department of Food and Agriculture, and the Department of Public Health within 24 hours of discovering defective or potentially defective cannabis; (ii) a mechanism to identify and contact the licensee that produced the cannabis; and (iii) a mechanism reasonably configured to contact consumers who have, or Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 56 likely have, obtained the product from Lemonnade, including the policy for return of the recalled product. Our procedures to notify regulators of defective or potentially defective cannabis within 24 hours include maintaining contact information within our SOPs and utilizing template communications for each regulatory agency. Our procedures to notify the originating licensee include pre-establishing with each vendor who is responsible for which recall procedures and how to contact one another in the event of a recall. Our procedures to notify customers who have, or likely have, obtained defective or potentially defective cannabis products from Lemonnade include: (i) encouraging (but not requiring) customers to provide contact information and consent to retention of that information at the point of sale; (ii) utilizing template communications for impacted customers to explain the recall and recommended response (based on the severity classification of the recall); (iii) making the recall public through social media and general news media outlets (e.g., local news channels or newspapers), by conspicuously posting a recall notice in the lobby for all customers to see, and by issuing press releases as needed to notify those customers who have not provided Lemonnade with contact information; and (iv) following up with customers who have consented to notification but have not been directly contacted via telephone call, personal visit, and/or follow-up letter. At a minimum, all recall communications will: (i) identify the recalled products (e.g., by type, brand, size, batch number, photograph); (ii) explain the reason for the recall (e.g., mislabeled, failed or improper testing, non-compliant packaging); (iii) provide customer instructions (for return and/or destruction); and (iv) include Lemonnade’ contact information (i.e., telephone number, email address, physical address). Mailed communications will include a response form and postage-paid envelope bearing Lemonnade’s address. We will document all recall correspondences and retain copies of this documentation for at least seven years in accordance with our recordkeeping procedures. Upon notice of a recall and/or discovery of defective or potentially defective cannabis, management will immediately remove all impacted products from inventory and place them in quarantine in the cannabis waste storage area of the secured storage room (a reinforced limited-access area). Management will similarly quarantine any recalled and/or defective or potentially defective products returned by customers. These quarantined products will be disposed of via our cannabis waste procedures. CANNABIS WASTE DISPOSAL Our cannabis waste disposal policies and procedures are detailed in the Neighborhood Plan submitted with this application. Our waste disposal procedures comply with 16 CCR § 5054. INVENTORY RECONCILIATION The Inventory Manager will conduct daily inventory reconciliation documenting and balancing cannabis inventory to confirm that the State’s Track-and-Trace system matches our point-of-sale system and the amount of physical product at our facility. 16 CCR § 5051(a). Reconciliations will be conducted “continuously” so that the entire inventory is reconciled weekly. During inventory counts, the Inventory Manager will visually inspect each good, ensuring that: (i) the good is not expired; (ii) the packaging is intact and unopened; and (iii) the labeling is intact and legible. DELIVERY SERVICE PROCEDURES, NUMBER OF VEHICLES, AND PRODUCT SECURITY DURING TRANSPORTATION At Cookies, we recognize that a delivery service can be invaluable to those customers who are unable to travel to our dispensary storefront. To ensure we are prepared to offer a secure and effective delivery service, we have developed the policies and procedures described in this section. We will initially start with one delivery vehicle and add vehicles to our fleet based on the demands of the community. Our ability to quickly implement these policies and procedures is evidenced by our quick response to the recent Coronavirus pandemic, working with the BCC and local regulators to begin offering delivery from and curbside pickup at our storefronts across California. Similarly, we will accommodate our Fresno customers with delivery to ensure we do our part to preserve public health. RECEIVING DELIVERY ORDERS We intend for our customers to be able to place delivery orders by telephone or through our website via Dutchie’s online dispensary sales software. We utilize Dutchie software for delivery at our other dispensaries and are confident that the software will be suitable for our Fresno location. Upon receiving a new delivery order, a Sales Associate will first confirm that the order is within the daily sales limit per customer. Next, the Sales Associate will check inventory to ensure that the goods ordered are in stock. If any of the goods are not in stock, the Sales Associate will use professional judgment to offer a suitable alternative to the customer. If the goods ordered are available, the Sales Associate will record the customer’s identifying information and will check the customer-provided delivery address online to verify that it is: (i) a physical address in California; (ii) not on publicly owned land or on land or in a building leased by a public agency; and (iii) not a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center. 16 CCR § 5416. Customers will be informed that age and identity verification will be required at the time of delivery and that order fulfillment is contingent upon age and identity verification. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 57 DELIVERY ORDER PROCESSING The Sales Associate will prepare a Delivery Request Receipt for the order containing the following: (i) Lemonnade’ name and address; (ii) first name and employee number of the employee who delivers the order; (iii) first name and employee number of the employee who prepares the order for delivery; (iv) first name and Lemonnade-assigned customer number for the customer who requests the delivery; (v) date and time the delivery request is made; (vi) delivery address; (vii) detailed description of all cannabis goods requested for delivery, including the weight, volume, or other accurate measure of the amount of the cannabis goods requested; and (viii) total amount paid for the delivery, including any taxes, fees, the cost of the cannabis goods, and any other charges related to the delivery. (Upon delivery, the Delivery Employee will update the Delivery Request Receipt to include the date and time of delivery and the customer’s signature.) 16 CCR § 5420(a). The Sales Associate will then scan or manually enter each item into the point-of-sale system and will enter the following information into Track-and-Trace: (i) name and type of cannabis goods; (ii) UID of cannabis goods; (iii) amount of cannabis goods, by weight or count; (iv) date and time of sale; and (v) any other information required by licensing authorities. 16 CCR § 5049(b). If Lemonnade loses connectivity to Track-and-Trace, delivery orders will not be fulfilled until connectivity is restored. 16 CCR § 5050(b). (If the customer consents to the recording of their personal information, the Sales Associate will also record this information in the customer’s profile in the point-of-sale system, so that cannabis goods sold by Lemonnade can be tracked in the event of a product recall.) The Sales Associate will then add the goods ordered to the driver’s Delivery Inventory Ledger, including the following information for each good: (i) type; (ii) brand; (iii) retail value; (iv) UID; and (v) weight or volume. The Sales Associate will verify that the Delivery Inventory Ledger contains less than $5,000 of cannabis goods, based on current retail prices. 16 CCR § 5418(a). The Sales Associate will place all delivery orders into opaque exit packages (16 CCR § 5418(e)) and will provide the packaged orders to the Delivery Employee, along with copies of the associated Delivery Request Receipts and Delivery Inventory Ledger (16 CCR § 5418(e), (g)). DELIVERY VEHICLE LOADING Delivery vehicles will be loaded in the designated loading area. The delivery vehicle loading area will be under 24-hour video surveillance. 16 CCR § 5044(d)(1). Delivery Employees will load cannabis goods into the enclosed delivery vehicle, ensuring that the goods are locked in a fully enclosed box, container, or cage that is secured on the inside of the vehicle (but is not comprised of any part of the body of the vehicle) and are not visible to the public. 16 CCR § 5417(b); FMC § 9-3309(d). Delivery Employees will utilize the following checklist to ensure that all necessary items are in their possession and functioning properly: Delivery Inventory Ledger Delivery Request Receipt Delivery Stop Log Business license Driver’s license Employee identification badge Age verification device Mobile telephone GPS device Sufficient fuel Alarm system Inventory containers and locks Vehicle operator’s manual Spare tire and jack GPS TRACKING Each of our delivery vehicles will be outfitted with a dedicated GPS device for identifying the geographic location of the delivery vehicle and recording a history of all locations traveled to during a delivery. 16 CCR § 5417(d). We will own the GPS devices and will use the devices for delivery only. 16 CCR § 5417(d). The GPS devices will be permanently or temporarily affixed to the inside of the delivery vehicles and will remain active at all times during delivery so that we are able to identify and document the location of the vehicles at all times during deliveries. 16 CCR § 5417(d). The history of all locations traveled to by a Delivery Employee while engaging in delivery will be maintained for at least 90 days, and we will provide this information to regulators immediately upon request. 16 CCR § 5417(d). DELIVERY STOP LOG Delivery Employees will maintain a Delivery Stop Log, i.e., a log of any stops from the time they leave our premises to the time they return to our premises, including the reasons for each stop. 16 CCR § 5418(f). Delivery Employees will complete entries after each stop and before resuming the delivery route. Upon returning to Lemonnade’s’ premises, Delivery Employees will provide the Delivery Stop Log to management, and management will ensure that the log is retained and available for inspection for at least seven years. 16 CCR § 5418(f). Immediately upon request by the BCC, the City, or any law enforcement officer, Delivery Employees will provide the log of all stops from the time the Delivery Employee left our premises up to the time of the request. 16 CCR § 5418(h)(3). DELIVERY EMPLOYEE COMMUNICATION The Delivery Employee and management will communicate via hands-free telephone. Prior to departing from our premises for a delivery, the Delivery Employee will place and receive a test call to verify that the telephone is properly Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 58 functioning. The Delivery Employee will report all adverse delivery events to management, who will record the events in a dedicated incident log. DELIVERY ROUTE GUIDANCE While conducting deliveries, Delivery Employees will follow the preplanned delivery route as assigned by management using Google Maps or another GPS navigation application as necessary for route guidance. If a stop or deviation from the delivery route is necessary (e.g., for rest, fuel, vehicle repairs, or unsafe road conditions or if stopped by a regulator or law enforcement), the Delivery Employee will communicate the stop or deviation to management and record the stop on the Delivery Stop Log. After any necessary stops or deviations, the Delivery Employee will use the GPS navigation application to continue on the preplanned delivery route or to return to our premises. If there are any technical issues with the navigation application, the Delivery Employee will park the delivery vehicle in a reasonable location to address the issues and contact management if necessary for further instruction. DELIVERY BREAKS AND STOPS Delivery Employees will only travel from our premises to a delivery address; from one delivery address to another; or from a delivery address back to our premises, without deviation, except for necessary rest, fuel, or vehicle repair stops, or because road conditions make continued use of the route unsafe, impossible, or impracticable. 16 CCR § 5421. Delivery Employees will record any stops on the Delivery Stop Log (16 CCR § 5418(f)) and will report any delivery delays caused by road conditions or vehicle problems to management via the hands-free mobile telephone located within the delivery vehicle. If, during a delivery, the delivery vehicle is stopped by the BCC, the City, or law enforcement, the Delivery Employee will cooperate with the stop and respond to inquiries with urgency, honesty, and professionalism. (If the stop is by an agent of the BCC or the City, the Delivery Employee will first request to see the agent’s identification badge or other credentials to verify that the agent represents the BCC or the City.) Immediately upon request by the stopping regulator, the Delivery Employee will provide all Delivery Request Receipts, Delivery Stop Logs, and Delivery Inventory Ledgers in the Delivery Employee’s possession at the time of the request. 16 CCR § 5418(h). After the stop, the Delivery Employee will update the Delivery Stop Log to reflect the stop and will call to notify management of the stop. Upon returning to our facility, the Delivery Employee will provide the Delivery Stop Log to management, who will confirm that the log reflects the regulatory stop and ensure that the record is retained in our files. We acknowledge that the BCC and the City may stop and inspect our delivery vehicles at any licensed premises or during delivery. 16 CCR § 5417(f). COMPLETING A DELIVERY Upon arrival at a delivery address, the Delivery Employee will attempt to contact the customer by knocking on the door or ringing the doorbell. If there is no response after a reasonable time, the Delivery Employee will return to the delivery vehicle and will contact the customer by telephone. If there is no response within 10 minutes, the Delivery Employee will return to our facility. If there is a response, the Delivery Employee will first verify that the person responding is the person who placed the order and scan the customer’s identification with the age verification device to confirm that the identification is valid and that the customer is of legal age to purchase cannabis. 16 CCR § 5415(f). After verifying identity and age, the Delivery Employee will accept payment and transfer possession of the cannabis goods to the customer. The customer will sign the Delivery Request Receipt and will be provided with a copy. 16 CCR § 5420(b). The Delivery Employee will retain a copy of the signed Delivery Request Receipt for our records. 16 CCR § 5420(b). POST DELIVERY After completing (or attempting) each delivery, the Delivery Employee will update the Delivery Inventory Ledger to reflect the current inventory in possession of the Delivery Employee. 16 CCR § 5418(e). After completing (or attempting) the final delivery, the Delivery Employee will update the Delivery Inventory Ledger and return to our premises. The Delivery Employee will provide management with the Delivery Request Receipts, Delivery Inventory Ledger, and Delivery Stop Log. Management will confirm that the Delivery Request Receipt and Delivery Inventory Ledger are consistent and will unload any undelivered cannabis goods from the delivery vehicle and return the goods to inventory. 16 CCR § 5418(j). Management will ensure that these delivery records are retained in our records and available for inspection for at least seven years in accordance with our recordkeeping policies (16 CCR § 5037(a)) and that an authorized employee updates the relevant inventory and Track-and-Trace records by the end of the business day (16 CCR § 5418(j)). NUMBER OF DELIVERY VEHICLES Because we have not yet decided to offer delivery services, the estimated number of delivery vehicles is yet to be determined. We anticipate utilizing at least one designated, registered vehicle to deliver cannabis goods to our Fresno customers. PRODUCT SECURITY DURING TRANSPORTATION At Lemonnade, we will enforce the following policies to ensure product security during delivery: Delivery Employees will not carry cannabis goods worth more than $5,000 at any time. 16 CCR § 5418(a). Only authorized Lemonnade employees will be allowed in the delivery vehicle during a cannabis goods delivery. 16 CCR § 5417(a). While carrying cannabis goods for Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 59 delivery, Delivery Employees will only travel in an enclosed delivery vehicle and will ensure the cannabis goods are not visible to the public. 16 CCR § 5417(a)–(b); FMC § 9-3309(d). Delivery vehicles will not have any marking on the exterior of the vehicle that may indicate the presence of cannabis inside the vehicle. 16 CCR § 5417(a); FMC § 9-3310(a)(7). Delivery Employees will not leave cannabis goods unattended in the delivery vehicle unless the vehicle is locked and the alarm system is active. 16 CCR § 5417(c). A dedicated GPS device will be affixed to the inside of each delivery vehicle, enabling management to identify each vehicle’s location during delivery. 16 CCR § 5417(d). CASH HANDLING PROCEDURES CASH PROTOCOLS INSIDE THE RETAILER Cash is currently the most popular method of payment for transactions involving cannabis goods. Steps will be taken to ensure that cash is handled properly and that criminals do not target dispensaries and employees for their cash inventory in addition to their cannabis inventory. Additionally, cash will be monitored to guard against employee theft and diversion practices. We will have an accounting software system in place to provide point-of-sale data as well as audit trails of both product and cash as per FMC § 9-3310(b)(1)(xvi). We will have at least two cashiers (and/or Sales Associates, who are cross-trained with cashiers) working during all business hours in order to expedite any purchases and ensure that the number of visitors present at any one time never becomes overwhelming for both the employees and the on-site security guards. There will be duress alarm buttons placed on the underside of the check-out counter within easy reach of every cashier. The employee will always print a receipt for the products purchased. Every transaction will be recorded by the point-of-sale inventory system that provides both the customer and Lemonnade with a record of the sale. Further, each point of sale will be monitored and recorded 24 hours per day by a dedicated camera as part of our video surveillance system. All cash received, except that needed for retail customer transactions, will be kept in a secure receptacle such as a drop safe or other type of safe. In the vault, our cash revenues will be removed from the retailer automated cashier daily and placed in the main cash safe located in the vault after the dispensary has closed. Senior management will maintain two-person verification by supervising the daily deposit of revenues into the cash safe. All deposits of cash into the main safe will be logged with an accurate count and signature of management. From time to time, senior management will conduct unscheduled spot checks or audits of cash in the safe. CASHIER ACCOUNTABILITY Each employee handling cash will be trained in efficient and safe cash management techniques. Employees engaged in sales to customers, patients, and caregivers will take the product the customer wants to purchase to the check-out service area, and a dedicated cashier will handle the transaction. A time-delayed drop safe will be located under the counter at the service window, and the cashier will be required to make periodic cash deposits into the drop safe each time the contents of the cash drawer exceeds $500. All employees will be held accountable for the balance of their drawers periodically during working hours and at the close of each day. If an employee does not balance within 1% of perfect on three occasions, that employee may be terminated or removed from any position involving the handling of funds. All funds remaining in cash drawers and all funds in the drop safe will be deposited into the main safe at the close of business each day. Periodically, management will conduct unscheduled audits of cash drawers. CASH PROTOCOLS FOR TRANSPORTING AND DEPOSITING We will contract with a third-party security company, such as Hardcar, that utilizes an armored vehicle or comparable secured transportation to transport cash deposits from the dispensary to our bank. Senior management will order cash pickups at periodic, alternating intervals. Prior to cash pickups, under the supervision of senior management, an employee will: (i) count and sign the safe log for all outgoing deposits; (ii) utilize dual-pouch, tamper-resistant depository bags; (iii) write the deposit information in the space provided on the outside of each depository bag; (iv) record the number of bags and each unique bag number on a deposit ticket and retain a copy of the deposit ticket for Lemonnade’s’ records; and (v) seal all depository bags. Cash pickups will be conducted in the secure intake area of the dispensary in full view of a security camera. During cash pickups, under the supervision of senior management, an employee will: (i) verify the armored truck guard’s identification badge; (ii) record the package quantity being shipped; and (iii) ensure that all guards wear a name tag and are escorted by an employee for the full duration of time they are within the dispensary. NON-CASH TRANSACTIONS We will utilize all possible avenues to make transactions with payment other than cash, such as credit cards and cashless ATMs, whenever feasible. Customers spend more via electronic payments than cash, and employees and customers feel safer when the amount of cash on hand is reduced, leading to less crime and more community activity. We have established relationships with United States-based payment processors, which will enable us to accept electronic payments upon opening. We will have the ability to accept debit cards via cashless ATMs as well as contactless payment through direct ACH. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 60 INVENTORY CONTROL PROCEDURES Proper inventory control is essential for running a healthy, profitable business. At Cookies, we recognize that a failure to maintain inventory in compliance with applicable rules and regulations could lead to product diversion and have a negative impact on our reputation and profitability. Tracking and documenting the receipt and disposition of cannabis goods will be performed meticulously and diligently to ensure that all cannabis goods are accounted for and to maintain product safety. We have established and will implement a written inventory control plan to track the location and disposition of all cannabis goods at its facility, which includes documenting all inventory-related activities into METRC and our inventory control software, reconciling the on-hand inventory of cannabis goods at the premises with the records in Track-and-Trace, and investigating and reporting inventory discrepancies in a timely manner. METRC TRACK-AND-TRACE California Track-and-Trace requirements help to monitor cannabis products throughout the supply chain and ensure that products purchased at licensed cannabis retail stores are tested and safe. We will utilize METRC, the State’s official Track-and-Trace system, as our primary system of record. Unless otherwise specified, all transactions will be entered into METRC within 24 hours of occurrence. We accept responsibility for all actions our Owners or employees take while logged into METRC or otherwise performing Track-and-Trace activities. TRACK-AND-TRACE ACCOUNT MANAGER We will designate one individual Owner as its Track-and-Trace Account Manager. Within five calendar days of license issuance, the Account Manager will complete state-mandated training provided by the State or its designee. The Account Manager will designate METRC users as needed and will require the designated users to be trained in the proper and lawful use of METRC before the users are permitted to access the program. To prevent a breach of Lemonnade’s METRC account, and to protect the integrity of the data in METRC, each authorized user will have unique login credentials with appropriate user permissions. Each authorized user will exclusively use their personal credentials to access METRC and will never share account information with another individual. The Account Manager will maintain an accurate and complete list of all designated METRC users, update the list immediately when changes occur, and cancel any designated users from Lemonnade’ Track-and-Trace account who are no longer authorized to represent Lemonnade. We will notify the BCC in writing of any change to the designated Track-and-Trace Account Manager within 48 hours. The Account Manager will monitor all compliance notifications from METRC and will resolve each issue identified before dismissing the notification. The Account Manager will correct any data that is entered into Track-and-Trace in error immediately upon discovery of the error. COVA We will establish an internal inventory tracking system to supplement our METRC records, which will include the utilization of the COVA cannabis retail management platform as our inventory management software and point-of-sale software. We will use both METRC and COVA point-of-sale software to comply with Track-and-Trace requirements, to facilitate inventory management, and to complete customer transactions. While METRC will be the primary platform utilized throughout shipment intake and to comply with California’s Track-and-Trace requirements, COVA integrates seamlessly with METRC, and data that is imported into COVA from METRC will be used to maintain Track-and-Trace records in real time and to facilitate other inventory-related tasks. SHIPMENT INTAKE Upon receipt of a shipment of cannabis goods from a licensed distributor, and after inspecting the shipment for accuracy, quality, defects, and compliance, management will ensure that a verified shipping manifest is recorded in METRC in accordance with our Shipment Intake Policy. Management will record the following information in METRC for each product received: (i) a description of each item such that the cannabis goods can easily be identified; (ii) an accurate measurement of the quantity of the item; (iii) the date and time the cannabis goods were received by Lemonnade; (iv) the sell-by or expiration date provided on the package of cannabis goods, if any; (v) the name and license number of the distributor that transported the cannabis goods to Lemonnade; and (vi) the price Lemonnade paid for the cannabis goods, including taxes, delivery costs, or any other costs. We will accept or reject “in whole” shipments of cannabis goods, except for cannabis goods that are: (i) not accurately reflected on the sales invoice or receipt; (ii) damaged; (iii) non-compliant with labeling requirements; or (iv) expired. When a shipping manifest includes several line items, the Inventory Manager may choose to reject one or more of the line items that are defective or do not accurately reflect our order by ticking the appropriate “reject package” box on the shipping manifest within the METRC program. Furthermore, if the number of items ordered does not reflect the number of items received in a shipment, the Inventory Manager will document the actual number of items received in the METRC system. Our shipment intake and inspection policies and procedures are described in more detail in the Location and Procedures for Receiving Deliveries During Business Hours section, above. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 61 INVENTORY RECONCILIATION The Inventory Manager will conduct daily inventory reconciliation documenting and balancing cannabis inventory to confirm that the State’s Track-and-Trace system matches our point-of-sale system and the amount of physical product at our facility. 16 CCR § 5051(a). Reconciliations will be conducted continuously so that the entire inventory is reconciled weekly. Any informational errors discovered during inventory reconciliation will be immediately corrected using METRC. However, if discrepancies cannot be explained and corrected, management will conduct an audit to determine the source of the discrepancy and will notify regulators of any reportable activity. 16 CCR § 5051(b). Specifically, all evidence of diversion, theft, or loss, including significant discrepancies (i.e., a difference between actual and recorded inventory of at least 3% of average monthly sales) and evidence of the loss or unauthorized alteration of records, will be reported to local law enforcement, the City, and the BCC within 24 hours of discovery. 16 CCR § 5036(a). Notification to the BCC will be submitted on the Notification and Request Form and will include: (i) date and time of the occurrence of theft, loss, or criminal activity; (ii) name of the local law enforcement agency that was notified; and (iii) description of the incident including, where applicable, the items that were taken or lost. Copies of the Notification and Request Form submitted to the BCC and any other written communications regarding the discrepancies will be retained in our electronic records and made available to regulators in electronic or hard-copy form immediately upon request. SALES Our point-of-sale processes and COVA software help to reduce the likelihood of product diversion on the sales floor by limiting the number of products maintained in the show room at any given time. After becoming familiarized with our product offerings and viewing product samples under the supervision of a dispensary employee, a customer will place their order with a dispensary employee at the service counter in the retail area, who will utilize the COVA point-of-sale system to document the order. COVA will communicate the order to our Inventory Manager, who will immediately gather all items listed on the order from the storage room, inspect them, and take them to the service counter, where a designated employee will check the items against the order to ensure it has been correctly fulfilled. The transaction will then be finalized using COVA, and the employee will place the ordered items in a compliant exit bag and hand it to the customer. For more information on our sales policies and procedures, see the Product Handling Procedures section, above. RETURNS Our COVA inventory management and point-of-sale system will help to facilitate the return of cannabis products in accordance with our Return Policy (see the Product Handling Procedures section, above). When a return is brought to the attention of management, management will use COVA to check the customer’s purchase history to verify that the product was sold by Lemonnade to the customer within the past 30 days. If management cannot locate the original sale in the point-of-sale system, the customer does not have a physical receipt, or the timeframe for returning or exchanging the product has elapsed, management will explain to the customer that the return or exchange cannot be processed. If management approves a return, an authorized user will record the following details about the returned product in both COVA and METRC: (i) the name and type of cannabis goods returned; (ii) the UIDs of cannabis goods returned; (iii) the amount (by weight or count) of cannabis goods returned; and (iv) the date and time of the return. After documenting the return, management will immediately place the returned goods in the cannabis waste storage area of the secured storage room (a reinforced limited-access area), where they will be quarantined until they can be properly destroyed and disposed of. RECALLS We will use Track-and-Trace and on-site documentation to ensure that recalled cannabis products intended for destruction are identified, weighed, and tracked while on our premises and when disposed of. For recalled cannabis products, the Track-and-Trace Account Manager or a designated user will enter the following details into Track-and-Trace: (i) the weight and count of the product; (ii) reason for destruction; and (iii) the date the quarantine period will begin. Our recall policies and procedures are discussed in more detail in the Product Handling Procedures section, above. DESTRUCTION AND DISPOSAL When a product needs to be quarantined, destroyed, or disposed of, we will rely on both COVA and METRC to remove the product from inventory and thoroughly document its disposition. Management will use COVA to change the item’s designation to remove the product from our available inventory and ensure it cannot be processed as part of a sale. METRC will then be used to record the following information within 24 hours of each cannabis waste destruction or disposal: (i) the name and type of cannabis goods; (ii) the UID of cannabis goods; (iii) the amount of cannabis goods, by weight or count; (iv) the date and time of destruction or disposal; (v) the name of employee performing destruction or disposal; (vi) the reason for destruction and disposal; and (vii) the entity disposing of the cannabis waste. Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 62 RECORDKEEPING AND REPORTING In addition to tracking and monitoring cannabis products, our inventory control policies also focus on maintaining precise records and supporting easy communication between Lemonnade and other licensees, regulators, and law enforcement. We will maintain complete and accurate inventory records and ensure that the records are available for inspection for at least seven years. As with all records, we will store inventory records electronically but will be able to produce hard copies immediately upon request. The BCC and the City of Fresno will be granted access to our current inventory records, Track-and-Trace records, and inventory reconciliation results, in either hard-copy or electronic form, immediately upon request. We will allow inventory records to be reviewed by the BCC any time we are exercising the privileges of our license or at any other time as mutually agreed to by the BCC and Lemonnade. We understand that this review may occur without prior notice and outside of our standard business hours. LOSS OF CONNECTIVITY If we lose connectivity to METRC, the Track-and-Trace Account Manager will ensure that comprehensive records detailing all required inventory tracking activities conducted during the loss of connectivity are prepared and maintained. 16 CCR § 5050(a). When connectivity is restored, the Account Manager or a designated user will document why connectivity was lost and the date and time connectivity was lost and restored. 16 CCR § 5050(c)(2). The Account Manager or a designated user will document all inventory tracking activities that occurred during the loss of connectivity into METRC within three calendar days of connectivity being restored. 16 CCR § 5050(c)(1). We will not receive or deliver any cannabis goods until connectivity is restored and all information is properly recorded in METRC. 16 CCR § 5050(b). Day-to-Day Operations1.6 1261 Wishon OPCO, LLC • District 1 • • • 63 2.0: SOCIAL POLICY AND LOCAL ENTERPRISE PLAN Cookies developed our Social Policy and Local Enterprise plan to support local employment and entrepreneurship in Fresno. From our experience across 21 stores, and leadership’s 110+ cumulative years of regulated cannabis experience, we know that the best way to maintain a dedicated, and motivated staff is to generously compensate employees while affording them the opportunity to live a fulfilling life outside of work. As in our other locations, we will be a role model for employers in the City of Fresno, showing that cannabis businesses can make meaningful contributions to the community through labor and employment practices. As set forth in more detail below, Cookies pays employees a living wage and will provide multiple opportunities to develop new skills through employee training, formal education, and a mentoring program. In addition, we will create new jobs for the Fresno community. As a locally owned and managed business, we appreciate the importance of providing stable, middle class jobs and providing Fresnans a platform for investing in their futures. Furthermore, we commit to a ninety percent (90%) local hire and have allocated fifty percent (50%) of our total annual work hours to individuals who meet one or more of the seven Social Policy hiring criteria described in Section 9-3316(b)(1) of the Fresno Municipal Code. To achieve this goal, we will employ the same recruitment strategies, including working with our non-profit partners and the Fresno Chamber of Commerce, that have worked in other jurisdictions where we have met our hiring goals. Our labor and employment plan is aimed at providing financial stability for people in the community facing economic instability. We will provide our workers with a safe and healthy workplace where employees can prosper and be productive. Evidencing our commitment to supporting our employees’ rights to organize, Cookies has signed a labor peace agreement with the United Food and Commercial Workers Union. We look forward to setting the standard for being a good employer in Fresno. 2.1: COOKIES PAYS A LIVING WAGE Cookies is committed to paying a living wage and will pay all employees above the minimum wage set by the City of Fresno and the State of California. Our hourly wage begins at per hour plus benefits as described below. The average wage at Cookies is per hour. We set wages based on Massachusetts Institute of Technology’s living wage calculation, which lists the Fresno Metropolitan Area as per hour. Our starting wage exceeds MIT’s estimation of Fresno’s living wage by 72%. From both raising children in Fresno as a single mother, and as chair of the Fresno County Commission on the Status of Women, our owner and CEO Kacey Auston uniquely understands the value of this extremely strong starting wage: Fresno County leads the nation for the highest number of women living in poverty. We believe our living wage would support a single mother (like our owner Kacey Auston used to be) raising a child. We also believe in pay equity. Our specific salary information is in the staffing plan on page 71. Every worker will receive equal pay for equal work regardless of their gender, sexual orientation, race, religion, national origin, age, or physical and mental ability. We regularly review wages and salaries to ensure that employee compensation remains fair. 2.2: COOKIES PROVIDES COMPREHENSIVE BENEFITS Our high quality benefits attract and maintain our best-in-class workforce across 21 stores. Cookies provides a comprehensive benefits package that prioritizes a person’s economic well-being as well as their ability to thrive outside of the workplace. Our employees will be provided with a living wage, health insurance, 401k, paid time off, paid volunteer time off, medical leave, and maternity and paternity leave. Our goal with our benefits is to provide security for workers and keep them out of poverty through retirement. HEALTH INSURANCE. Cookies is committed to providing high-quality health insurance to all its employees, including dental and vision care. We pay 100% of an employee’s health insurance premiums. Health benefits are also available for eligible family members, including same-sex and domestic partners. Employees will have the right to pick the most suitable plan for their needs and will be offered a choice of PPO, HMO, and EPO. We not only believe this is the right thing to do, but we also know that gaining access to health insurance improves employees’ health and financial well being. MATERNITY AND PATERNITY LEAVE. Cookies recognizes the value of maternity and paternity leave for allowing both parents to bond with their new child and adjust to their new lives. Eligible employees (in accordance with applicable state laws) will receive up to 12 weeks leave to bond with the new child. We provide both maternity leave and paternity leave benefits to new mothers and new fathers. Mothers and fathers continue receiving health insurance benefits while on leave. Upon returning from maternity and paternity leave, employees are reinstated to their original position or assigned a comparable position if the original position is no longer available. PAID TIME OFF AND MEDICAL LEAVE. Employees receive 15 days of paid time off per year after their probationary period with the company. In addition, each employee will receive 72 hours of sick leave each calendar year. These policies will ensure that: (i) workers will not come to the dispensary when sick; (ii) employees can spend important holidays with their families; and (iii) employees will be able to have meaningful time away from the workplace. Social Policy and Local Enterprise Plan2.0 - 2.2 1261 Wishon OPCO, LLC • District 1 • • • 64 PAID VOLUNTEER TIME OFF. To foster community connection, Cookies provides 40 hours per year for paid employee volunteering. Employees are free to donate their time to a charity, nonprofit, or even their child’s school. The volunteer time off allows team members to develop new skills and empowers them to become leaders in the community. For employees with children, especially single parents, the ability to volunteer in a child’s school without sacrificing income is a point of pride for Cookies. 401K RETIREMENT PROGRAM. Cookies will offer our employees a 401k retirement program for those who wish to participate. Our retirement planning platform is an essential tool for Fresnans to plan and secure a long and stable retirement. We will match 50 cents on the dollar up to 6% of an employees pay. EMPLOYEE EDUCATION COMPENSATION. Investing in our employees’ education is a key part of Cookies strategy to promote from within and supports employee success. Recognizing that only 1 in 5 central valley residents has a 4-year college degree, our program is focused on closing the degree attainment gap. We will provide financial assistance for qualified employees who want to attend courses at Fresno State or State Center Community College. We also support our employees attending conferences to develop additional skills, including but not limited to cannabis expertise, management, human resources, security, and logistics. In accordance with our Internal Promotion Plan, employees who enroll in supplemental education courses will be spotlighted for a promotion. 2.3: COOKIES’ COMPETITIVE COMPENSATION, TRAINING, AND CONTINUING EDUCATION OPPORTUNITIES COMPENSATION With over 370 employees across its 21 locations, Cookies has a proven track record of creating solid, well-paying jobs with competitive employee benefits that provide our workers with stability and the capacity to grow and flourish in their communities. In Fresno, we will continue to provide stable, middle class jobs, wages, and benefits to our employees. Our goal as an employer is to far exceed the minimum, and set a new standard to both attract the best quality workers and compensate them for their commitment to our company. According to the Bureau of Labor Statistics’ May 2019 Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates, the median hourly wage for Retail Salespersons is per hour. The median hourly wage for Retail Supervisors is While these both exceed Fresno’s minimum wage of per hour, we aim higher. To provide our employees with the stability they require, Cookies starting wage in Fresno will be set at per hour for Receptionists and Sales Associates—51.63% higher than Fresno’s median retail wage—with many opportunities for promotions and an increase in earnings. Management will be salaried with the opportunity to make upwards of per year. We believe these wages will entice top prospects to our business while providing workers with the ability to live more complete lives and invest back into the Fresno community. Title General Manager Inventory Co-Manager Hospitality Co-Manager Inventory Lead Inventory Associate Lead Sales Associate Sales Associates Receptionist/Sales Associate Delivery Associate Dispatch Associate Security Guards Cookies’ Competitive Compensation2.2 - 2.3 1261 Wishon OPCO, LLC • District 1 • • • 65 CONTINUING EDUCATION Cookies believes that cannabis can be a platform for empowering others. Our goal is to provide skills to our workers so they can achieve their personal goals. We provide skills training to employees through training, mentoring, and education opportunities. In addition, we promote from within whenever possible. Our program supports development of the employee so they can do work that is positive and meaningful. All employees are compensated for time when taking part in continuing education programs TUITION ASSISTANCE PROGRAM Cookies supports the continuing education of its workforce and will encourage its employees to develop new skills. We provide tuition assistance for employees who want to attend school or conferences to develop additional skills, including but not limited to cannabis expertise, management, human resources, security, and logistics. In addition, after working at Cookies for 1 year, employees in school may apply for a tuition assistance scholarship. The only limitation on this program is that the educational coursework must relate to the employee’s career track. Whenever possible, we will utilize Fresno State or State Center Community College or educational opportunities for employees. CHAMBER OF COMMERCE MENTORSHIP PROGRAM. Cookies has joined the Fresno Chamber of Commerce and is in talks to develop a mentorship program. The proposed program will be a unique cross-industry mentorship program that pairs our employees with executives from Chamber-member companies. The mentors and mentees will meet for monthly formal mentor gatherings facilitated by the Chamber and Cookies. The aim of this program is to provide our employees with skills development opportunities in the cannabis industry and beyond. Possible areas of focus will include topics like leadership, accounting, marketing, logistics, security, management, business startups, and database infrastructure. The program will help to develop skilled workers in the Fresno area. In addition, we support the Leadership Fresno program. We are committed to sponsoring the program in 2021, sponsoring scholarships, and sending qualified Cookies employees to participate. The aim of the program is to develop leaders in Fresno County who will become a pool of people equipped with the skills, motivation and background to lead Fresno successfully into the future. Graduates of Leadership Fresno have gone on to hold leadership positions in a variety of organizations; they have been elected to political office – like former Fresno Mayor, Ashley Swearengin; and many have found their participation in the program positively affected their professional lives. LEADERSHIP TRAINING Cookies is proud to offer leadership training to employees who are on a management track. We use our Leadership Training Program to create a talent pipeline in order to fill leadership roles within the company with internal talent. This saves us money if we are able to promote individuals who are familiar with Cookies and provides career advancement for our employees. Developing effective leaders also increases productivity and morale at our stores. In order to identify candidates suitable for our Leadership Training Program, we conduct regular employee reviews at the store level. Employees who qualify for leadership training may enroll in the Harvard Extension School online program Essential Management Skills for Emerging Leaders. This program is designed to help new managers master core business concepts and build key skills in six subject areas, including leadership, strategy, marketing, communication, and negotiation. We are invested in building our employees skills and want them to grow with our company. Recently, we promoted Candace Tripp, a manager at our San Bernardino store, to our corporate office where she now does Cookies training at each new store launched in the country. EMPLOYEE TRAINING. A key to our company’s success, employee training starts two months before opening and is an ongoing requirement. We prioritize regulatory compliance and customer service in all aspects of operations. Our founder Berner explains his approach to customer service: “I encourage people when you open a dispensary—keep the customer in mind. Someone may be coming from the VA, they may be coming from the hospital, or might be having a terrible day. You want to give them your attention, and make it more personable, not so in and out. That’s why we chose to have the dispensary set up the way we do. We keep that good personable interaction in place.” Employee training begins with General Managers two months before opening, with Co-Managers (Inventory & Hospitality) starting six weeks before opening, Leads (Inventory & Sales) beginning four weeks before opening, and Associate level training starting two weeks before opening. Training for management includes in-person training in an existing Cookies location. Our onboarding training culminates in 5 days of on-site, jurisdiction-specific and Cookies-specific training. This final stage of pre-opening training is a combined effort of the local General Manager after two months of training, with support from the Cookies’ Retail Operations and Marketing teams, alongside top management from other locations who have been selected for Cookies Leadership Training Program.The final 5 days of on-site training reinforce all preceding training, and resolve any employee questions from reviewing training materials. Cookies’ Training and Continuing Education Opportunities 2.3 1261 Wishon OPCO, LLC • District 1 • • • 66 VIRTUAL TRAININGS. Cookies employees take the Cannabis Products and Sales Training (“CPST”) course and obtain CPST certification from the Trichome Institute. The CPST course covers all cannabis products on the market, how to use them, and how they work, enabling our employees to accurately advise customers on topics including dosing, time to effect, product distinctions, and safe consumption methods. We also provide virtual human resources trainings through an organization called Kantola and a learning management system called Lessonly to deliver additional virtual trainings throughout the year. CODE OF CONDUCT. Cookies’ employees are expected to do the right thing. That is why our employee training program starts with its Code of Conduct. Our Code of Conduct provides a framework for ethical decision making that is applicable to all aspects of day-to-day operation. During training, we cover the entire Code of Conduct, including what is expected at the workplace environment, business practices, and community involvement. Most importantly, we encourage our employees to ask for help whenever they are unsure what to do in a situation. CALIFORNIA LAW. Staff familiarity with California law and regulations is important because, even if an employee is not responsible for a certain task, they may notice an irregularity or an aspect of operations that is not in compliance with the law. Regulatory training covers all aspects of day-to-day operations, including age verification, inventory, Track-and-Trace, security, cannabis waste, and premises maintenance. STANDARD OPERATING PROCEDURES. Cookies maintains an extensive catalogue of written standard operating procedures (“SOPs”) that outline employee responsibilities and procedures for day-to-day dispensary operations. SOPs are assigned to employees based on their responsibilities. Throughout training they will be able to reference the written SOPs for confirmation of their duties and proper protocols. The SOPs are a clear, unambiguous distillation of employee obligations. Each SOP lists the policy, the procedure, and who an employee reports to in the event of any compliance-related questions. However, the goal of the SOPs is to put power into the hands of the employees to complete tasks themselves. During training, employees are tested on their knowledge of the SOPs. Management covers issues such as safe and sanitary storage, waste management, and age verification in one-on-one training sessions. During shadowing sessions, Management may ask employees for the next procedure in the task. Employees who have demonstrated a mastery of the SOPs will move on to the next step in the training process. CANNABIS HEALTH RISKS. Cookies trains employees on cannabis health risks so customers can make informative decisions. In recent years, more has been learned about the health risks associated with cannabis All Associate Training Syllabus: Cookies Fam OrientationCookies Code of ConductCookies Compliance Training - Who to Contact- Personal Belongings- Covid Health Questioniarre- Covid Cycle Clean- Personal Appearance Guidelines- Visitor Policy- Employee Badge Policy- State Specific Compliance- Standard Operating Procedures- Reception- Budtending-Cash handling procedures Cannabis ScienceCookies Visual TrainingCookies Consumption MethodsCookies Budtender Sales TrainingCookies Product KnowledgeFront of House: Cova POS TrainingBack of House: Cova Inventory TrainingSecurity Training Management Training Syllabus Cova Management Training: -Cash Skim-Cash Out-Change/Deposits Zipline TutorialTrades TrainingManagement Communication BinderSchedulingAttendance TrackerRest & Meal PeriodsPerformance Management - Performance Mgmt. Tracker- Corrective Action Form Policy & Procedure DocumentsOpening & Closing ChecklistChat in / Chat outVisual Standards - Flower Table Mapping- Checklist of Vendor packaging Odor ControlCommunication TrainingComplaint logging and investigation Cookies’ Training and Continuing Education Opportunities 2.3 1261 Wishon OPCO, LLC • District 1 • • • 67 consumption. Employees learn about how cannabis may impair cognition, increasing risk while driving, the signs of overconsumption, how cannabis effects may vary depending on dosage, and all other health and safety concerns. Owner Dr. Kurtz curates all training material on health risks for medical accuracy. Our training program in Fresno will rely on information provided by the National Institute on Drug Abuse, the California Department of Public Health, and Fresno County Department of Public Health. Cookies emphasizes two specific consumption risks when educating its employees: (i) Cannabis Use Disorder; and (ii) Cannabis Hyperemesis Syndrome. We also pay particular attention to ensure that employees understand the risks of cannabis consumption for pregnant and breastfeeding women. In addition, our training emphasizes that cannabis use can lead to the development of problematic use, known as Cannabis Use Disorder. Our employees receive training on resources available to customers on addiction treatment. SAFE CANNABIS CONSUMPTION. Knowledge of the risks of cannabis use is only one aspect of an overall understanding of safe cannabis consumption. It is vital that all Cookies’ employees understand the ways in which cannabis can be consumed safely and legally if they are to be resources for customers. Educating customers not just about health risks related to cannabis consumption but also about regulations prohibiting cannabis consumption and driving and cannabis consumption in public can save a life or at least help prevent customers from confrontation or fines by law enforcement. Discussing dosing with customers will also allow employees to explain how to avoid and recognize signs of overconsumption. CANNABIS IMPAIRMENT. Cookies trains its employees to recognize individuals who are impaired from cannabis use. It is our policy not to serve any person who is visibly intoxicated. Our employees are able to recognize signs of cannabis impairment, including but not limited to panic, anxiety, poor muscular and limb coordination, delayed reaction times and abilities, distorted senses, and red eyes. If an employee suspects that a customer might be impaired, they are trained to seek out management. Management has discretion to decide whether to deny the sale. If a customer appears to be in distress due to cannabis intoxication, management contacts emergency services for further evaluation and treatment. PRODUCT KNOWLEDGE. Cookies employees are knowledgeable about all products carried at the storefront in order to alleviate confusion and help the customer make an informed purchasing decision. To enable employees to help customers, our training program emphasizes the acquisition of a broad-based scientific and brand-centered understanding. Employees receive training on the differences between product types and modes of ingestion, potency, the major cannabinoids and phytocannabinoids and how they are represented on product labels, the nature of full-spectrum cannabinoids and terpenes, and the different distillates of manufactured cannabis products. In addition, we emphasize terpene flavor profiles and what makes each cannabis product unique since our philosophy is to carry high quality cannabis, not the cannabis with the highest THC content. This knowledge allows our staff to educate customers on what is contained in each cannabis product and the anticipated effects. CULTURAL TRAINING. Fresno is a vibrant and diverse city. Employees will interact with customers of different race, ethnicities, languages, ages, orientations, religions, abilities, and socio-economic backgrounds. In light of this fact, Cookies provides cultural training, so employees are equipped with the skills to interact with customers from all walks of life. Cultural training ensures that each customer can have an inclusive shopping experience. 2.4: COOKIES SUPPORTS SOCIAL POLICY HIRING It is important that Cookies does its part to nurture fairness, equity, and equal opportunity within the cannabis industry. To that end, we have a target of fifty percent (50%), but will ensure that a minimum of one-third of our total annual work hours will be allocated to employees who either have an annual family income that is below eighty (80) percent of the area median income, have been convicted of a cannabis related crime that could have been prosecuted as a misdemeanor or citation under current State law, lived in a low-to-moderate income tract in the City for a minimum of three (3) years, are veterans, are former foster home youths who were in foster care as a minor, who are unemployed, or are receiving public assistance. This translates to roughly 12-17 employees. We will consider these applicants for any position for which they are qualified. Our 4-pronged strategy for Social Policy hiring is set forth below. Our first strategy to recruit employees that qualify under Social Policy Section 9-3316(b)(1) of the Fresno Municipal Code is to host expungement clinics. The Fresno Economic Opportunity Commission Street Saints Program has agreed to collaborate with us on expungement programs. We have donated for the first expungement program. Likewise, we will collaborate with the OneJustice Justice Bus program to host expungement clinics. The Justice Bus is a travelling Cookies Supports Social Policy Hiring2.3 - 2.4 1261 Wishon OPCO, LLC • District 1 • • • 68 free legal clinic serving low income communities throughout the state. The expungement programs will attract local residents with minor criminal convictions, including those who have a cannabis related crime that could be prosecuted as a misdemeanor under current law. We will incorporate a job fair component in our expungement program. If awarded a license, we will host our first expungement program and job fair prior to opening. We look forward to working with individuals who are looking for a second chance after expungement. Our second strategy is to recruit clients of organizations that serve low income individuals in Fresno. Our aim is to identify applicants who have an annual family income that is below eighty percent (80%) of the area median. We have developed relationships with Poverello House, Fresno Economic Opportunity Commission, and Breaking the Chains. We will recruit potential applicants looking for permanent work. In addition, we will target nonprofits and conduct outreach in zip codes with low income designation. These zip codes include but are not limited to: 93650, 93701, 93702, 93703, 93704, 93705, 93706, 93707, 93708, 93712, 93714, 93717, and 93721. In order to determine whether a job applicant qualifies as low income, Cookies will use median income datasets from California Housing and Development and Housing and Urban Development (“HUD”). We will work with Fresno Housing Authority to identify Section 8 program participants looking for work. Section 8 program participants by definition have an annual family income that is eighty (80%) of the area median or lower. By conducting outreach with several organizations, we are confident on our ability to provide opportunities low Income Individuals. Family Size 1 2 3 4 https://www.hcd.ca.gov/grants-funding/income-limits/state- and-federal-income-limits/docs/income-limits-2020.pdf In addition, Cookies’ third strategy is to work with the Fresno Economic Opportunities Commission to put together a workforce recruitment program. In San Francisco, we have collaborated with the San Francisco LGBTQ Center to recruit from a population also facing barriers to employment, and memorialized our program with a signed agreement. Under the program, we are conducting a joint job fair and community outreach program to reach the targeted population. Whenever we have a position open, we provide their employment counselors notice of the open positions before we advertise it to the public. We hope to implement a similar program in Fresno with the Economic Opportunities Commission. Finally, Cookies’ fourth strategy is to conduct outreach with the Central Valley Veterans for the purpose of locating candidates. CVV is a Fresno-based nonprofit that provides support and guidance improve quality of life. One of its priorities is to keep veterans in permanent housing and working. We have contacted VCC and there is mutual interest to collaborate on employment opportunities. In addition, we will participate in the annual “Honor a Hero, Hire a Vet” job and resource fair. This event is sponsored by the California Employment Development Department. The 10-year-old program provides veterans access to employment opportunities, as well as training and resources aimed at helping them succeed in civilian life. Cookies is proud to support veterans, those who are serving, and those who support them. If selected for a commercial cannabis business permit, Cookies will provide the City with ongoing proof of its hour allocations upon request. LOCAL HIRING PRACTICES Cookies hiring practices will be centered around hiring local employees with equity in mind, and we will hire from within whenever possible. It is our practice to actively target local individuals to fill open positions within our business. We will implement a target of a minimum of ninety (90) percent of our employees be from the city of Fresno. We will achieve this through the utilization of local communications channels to disseminate information about open positions. All of our employees or volunteers will be legally authorized to perform work for Cookies under applicable state law. Across all stores, Cookies maintains 90% average local employment rate in the jurisdiction where the license is issued. We provide strong, stable, middle-class jobs above the median income. As an organization led by a lifelong Fresnan, we appreciate that any job that is going to Fresnans is a good thing. PROMOTING FROM WITHIN. Nobody knows our business better than our employees. That is why we hire from within whenever possible. This policy not only allows employees to progress within the same store or department, but also lets employees discover new areas and new stores. As a cannabis business with a corporate parent, employees also can work for our corporate management team. Our co-founder Berner epitomizes our philosophy. He started as a budtender in San Francisco and now runs the largest minority-owned cannabis business in the United States. We honor his ambition in our internal promotion program. For example, Candace Tripp started as a manager at our San Bernardino location, but we promoted her due to her exceptional ability to train employees. Now, Candace trains Cookies teams across the country and helps to open stores in new markets. While she has a busy travel schedule, our flexible work policy allows her to stay in San Bernardino with Cookies Supports Social Policy Hiring2.4 1261 Wishon OPCO, LLC • District 1 • • • 69 her family and friends. At our La Mesa store, we recently promoted Monique Bueno from an Inventory Lead to an Inventory Co-Manger. This is Monique’s 2nd promotion since she started as an Inventory Associate in July. As the fastest growing cannabis company, we haveopportunities for our employees who want to take on newchallenges. OUR PROMOTION FROM WITHIN POLICY ENCOURAGES OUR WORKERS TO GROW, DEVELOP, AND STAY IN FRESNO. 2.5: COOKIES IS A LOCALLY-OWNED AND MANAGED BUSINESS Cookies Fresno is a locally owned business. Lifelong Fresnoresident Kacey Auston is the majority shareholder (51%) andchief executive officer of this project. Included herewith areKacey’s drivers license and a utility bill to establish she hasbeen a Fresno resident since one year prior to March 2, 2020.We have identified Andy Mackey to serve as a local generamanager. With local ownership and management, Fresnanscan rest assured we are committed to the betterment of theCity of Fresno. The buck will stop with Kacey. She provides alevel of accountability to the community that other applicantscannot match. As an experienced public affairs professionain Fresno, everybody in City Hall knows her and that she isjust a phone call away. Kacey will be available to respond tocommunity concerns 24 hours per day, 7 days per week. Through her community relationships, Kacey will be awareof important issues in the community and communityexpectations. She has longstanding relationships withimportant community organizations, including the Fresno Economic Opportunities Commission, the Fresno Economic Development Corporation, the Fresno Chamber of Commerce, the Fresno Metro Black Chamber of Commerce, the Hispanic Foundation, Habitat for Humanity, Tree Fresno, Marjaree Mason, and Fresno Police Officers Association. As a third generation Fresnan, Kacey is excited to partner with these groups and appreciates the opportunity she has to create middle class jobs in the community she loves. Kacey is driven to seeing Cookies and Fresno grow and succeed together. Cookies is a Locally-Owned and Managed Business 2.4 - 2.5 1261 Wishon OPCO, LLC • District 1 • • • 70 2.6: COOKIES STAFFING PLAN Cookies anticipates that it will create 33 local jobs. Our staffing plan is set forth below in two charts. The first is the Cookies corporate management team that provides high-level oversight. The second is the staffing plan for the actual store in Fresno. Included in the charts is the position, the number of hires, and a description of the responsibilities. Cookies Staffing Plan2.6 1261 Wishon OPCO, LLC • District 1 • • • 71 FRESNO RETAIL TEAM #= FILLED POSITIONS #=OPEN POSITIONS Title No.Responsibilities Chief Executive Officer 1 • Developing, executing, and evaluating short- and long-term strategies; Being the ultimate authority in making major company decisions. General Manager 1 • Opening and closing the dispensary; Delivery acceptance; Oversight of sales and dispensary agents; Recordkeeping; Inventory management; Employee training; Regulatory compliance. Hospitality Co-Manager 2 • Execute Cookies world class customer service; Provide a warm and friendly welcome to all customers; Execute Cookies customer first culture through thoughtful communication, product knowledge, and high visual presentation standards; Partner with GM and recruiting team to set hiring standards for all store team members; Oversee management and associate onboarding programs, training modules, ongoing leadership development; Execute training modules, quizzes, video content, and tracking; Measure and follow up on customer satisfaction using tools such as online reviews, surveys, and key KPI’s; work with GM and other Co-Managers to set clear sales volumes and KPI goals; Lead store team to implement all aspects of visual presentation ; Partner with GM, Marketing and PR on community outreach, press, and in-store events. Inventory Co-Manager 2 • Ensuring inventory is accurately reflected in Track-and-Trace; Assisting the General Manager in inventory management responsibilities; Implementing shrink and loss prevention controls; Ensure day-to-day operations run smoothly through the store team. Inventory Lead 2 • Inventory management; Receive, count, and document inventory deliveries; Perform weekly or biweekly inventory/cycle counts; Inform store managers of upcoming inventory needs; Merchandising and restocking; Clerical tasks including maintaining inventory records; Adding products to online platforms and in-store menus; Train and supervise Inventory Associates; Monitor expired products and identifying stagnant inventory; Periodic audits of product labels, pricing, transfers to ensure compliance with protocol. Inventory Associate 8 • Inventory management; Execute operational initiatives as outlined on the master calendar; Ensure day-to-day operations run smoothly by adhering to standard operating procedures. Lead Sales Associate 4 • Execute Cookies world class customer experience; Provide a friendly and warm welcome to all customers; Execute Cookies customer first culture through thoughtful communication, comprehensive product knowledge, and maintaining high visual presentation standards; Support associate onboarding programs, training modules, ongoing leadership development; Continuously follow up with all managers and employees on Cookies customer experience and customer first culture by using tools such as online reviews, surveys, and key KPI’s; Work closely with GM and other Co-Managers to set clear sales volume and KPI goals; Sales Associate 10 • Assisting customers with product inspection and selection; Performing quality checks prior to releasing products to customers; Offering customer service, including customer education and complaints handling; Operating the point-of-sale system; Maintaining and monitoring the retail sales floor. Cookies Staffing Plan 2.6 1261 Wishon OPCO, LLC • District 1 • • • 72 CORPORATE MANAGEMENT TEAM Title No.Responsibilities Chief Operating Officer 1 • Overseeing day-to-day administration, operations, resources, and employees; Developing an operational infrastructure. Chief Financial Officer 1 • Overseeing accounting, budgeting, and financial reporting and developing financial strategies that ensure strong fiscal management. Chief Information Officer 1 • Managing and maintaining information technology and computer systems; Implementing technology for customer experience. Director of Compliance 1 • Ensuring facility and operations remain compliant under state and local law and internal policies and bylaws; Developing training material and auditing facility operations. Security Manager 1 • Developing and implementing standardized procedures to ensure facility remains safe and secure; Monitoring security personnel and security systems. Director of Local Equity 1 • Conducting outreach with community organizations to identify qualified employees; Participating in community events. Director of Marketing 1 • Ensuring smooth marketing operations; Leading the creation and execution of social, community, and product campaigns. Director of Education 1 • Developing and implementing an educational strategy; Developing customer and employee education material based on current research. Prior to hiring anyone, we will ensure that any person who is an employee or who otherwise works or volunteers within our business is legally authorized to do so under state law. This means we will verify the ages of all employees and we will not hire any under the age of 21. Management employees will undergo background checks as required by Fresno Municipal Code Section 9-3318(c). Receptionist/ Sales Associate 2 • Performing clerical duties; Verifying customer age and identity; Maintaining visitor log. Security Guards 6 • Greeting visitors and employees to assure them that Cookies is taking all necessary safety precautions; Ensuring security systems (e.g., video surveillance system, alarm system) remain operational; Monitoring and patrolling the premises to identify and respond to security risks during operating hours; Responding to alarm activation after hours. Dispatch Associate 2 • Taking delivery orders and communicating with staff responsible for fulfillment; coordinating deliveries with delivery drivers; maintaining delivery records; communicating with delivery drivers while they are in the field; and monitoring delivery routes in progress. Delivery Associate 2 • Transporting cannabis orders to consumer customers; Verifying customer identification; securing cannabis products during delivery; maintaining delivery records associated with delivery; fulfilling delivery orders on demand in the field; communicating with dispatchers and Co-Managers; obeying all traffic laws while in the field. Cookies Staffing Plan 2.6 1261 Wishon OPCO, LLC • District 1 • • • 73 2.7: COOKIES HAS SIGNED A LABOR PEACE AGREEMENT Labor is very important to Cookies. We respect our employees’ rights to join or form a union without interference. Because we will have more than five (5) employees on day one, we have entered into a labor peace agreement with United Food and Commercial Workers Union 8. The UFCW Local 8 is a bona fide labor organization that is the recognized or certified exclusive bargaining representative of the employees. FMC Section 9-3316(b)(2). We approached the UFCW in June and signed our labor peace agreement in August. We had numerous meetings with Jay Trumbull, Nichole Trujillo Rice, and UFCW 8 counsel Margo Feinberg. We are excited that our relationship with the UFCW union continues to grow in Fresno. As an experienced cannabis business, Cookies is no stranger to labor peace agreements or cannabis labor unions. We have signed several labor peace agreements with the UFCW across the state. In addition, owner Aaron Herzberg’s previously owned dispensaries have had collective bargaining agreements with the UFCW. Similarly, owner Kacey Auston has had over 30 years of professional and political relationships with the Central Valley Labor Council. She has made a commitment to support and grow with the trade unions. Through Kacey, we have identified several union contractors to work with if awarded a license. Cookies expects its employees to be satisfied with the benefits it provides, but, ultimately, the decision to unionize is with the employees. We will remain neutral and will not disparage any union if our workers decide to organize. ____________________________________________________________________________________ LPA 1261 Wishon OPCO, LLC Page 4 15. This Agreement shall be in full force and effect for three (3) years from the date it is fully executed on behalf of the Licensee and the Union, or if sooner upon execution of a collective bargaining agreement or issuance of an interest arbitration award which concludes the collective bargaining agreement negotiations, either of which explicitly supersedes this document. The Licensee shall notify the Union in writing when it has hired its first three Employees. This Agreement shall automatically renew for successive one (1)-year terms unless either party to this Agreement gives written notice of termination to the other at least sixty (60) days prior to the expiration date or any subsequent term’s expiration date. 16. If any provision of this Agreement is deemed invalid or found to be contrary to law by a court of competent jurisdiction, such provision shall be of no force or effect; but the remainder of this Agreement shall continue in full force and effect. The parties shall meet and negotiate in good faith with respect to any provision found to be in contravention of the law, not later fourteen (14) days after a written request to do so by either party with the goal of addressing the issue raised. 17. In the event of the sale of the licensed medical cannabis and/or adult use cannabis business, operations covered by this Agreement, and/or in the event of a merger of the Licensee, the Licensee will require, as a term of the sale or merger, that the new owner assume all the terms of the Licensee herein and execute a copy of the instant Agreement with the Union, in which event the Licensee assignor shall be relieved of its obligations hereunder to the extent that the assignor has fully transferred its right, title, or interest to the Operation and the Licensee has satisfied all outstanding obligations to the Union that arose prior to the sale. This Agreement will bind all successors to the Licensee herein. Brandon Johnson, Manager Jacques Loveall, President For the Company (print name)For the Union (print name) Signature Signature July 17, 2020 Date Date 1261 Wishon OPCO, LLC 2804 Gateway Oaks Drive, #100 Sacramento, CA 95833 UFCW 8-Golden State 2200 Professional Drive Roseville, CA 95661 Company Name/Corporate Address Union Name/Address August 14, 2020 ____________________________________________________________________________________ LPA 1261 Wishon OPCO, LLC Page 1 LABOR PEACE MEMORANDUM OF AGREEMENT THIS LABOR PEACE MEMORANDUM OF AGREEMENT (“Agreement”) is made and entered between 1261 Wishon OPCO, LLC, ("Licensee") and United Food and Commercial Workers Union Local 8 – Golden State ("Union"). This Agreement pertains solely to Licensee’s cannabis business located at 1261 North Wishon Boulevard, Fresno, CA 93728 (the “Operation”). This Agreement also covers any other DBA under which Licensee operates a cannabis business at this or any other address where Licensee or its DBA may relocate pursuant to a license under State or Local law. 1. This Agreement shall apply to all regular full and part-time employees of the Licensee who are employed in Licensee's Operation and who work in the job classifications set forth in Exhibit "A" (“Employees”). 2. In order to avoid picketing and/or other economic action directed at the Licensee in the event the Union decides to conduct an organizing campaign among Employees the parties hereby establish the following procedure for the purpose of ensuring an orderly environment for the exercise by the Employees of their rights under Se ction 7 of the National Labor Relations Act and to ensure compliance with California Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”). 3. The parties mutually recognize that Federal Labor Law guarantees employees the right to form or select any labor organization to act as their exclusive representative for the purpose of collective bargaining with their employer, or to refrain from such activity. 4. The Licensee will take a neutral approach to unionization of Employees. The Licensee will not undertake any action nor make any statement that will directly or indirectly state or imply any opposition by the Licensee to the selection by such Employees of a collective bargaining agent, or preference for or opposition to any particular union as a bargaining agent. The Licensee will not act or communicate in a threatening, derogatory, or demeaning way, or engage in any coercive conduct or delaying tactics that might interfere with the Employees’ right to choose union representation. 5. The Union and its representatives will not coerce or threaten any Employee in an effort to obtain authorization cards. The Union further agrees that it will not disparage or denigrate Licensee, its managers, supervisors, agents or representatives during the term. 6. The Union shall have reasonable access to the Licensee’s worksite during regular business hours or when Employees are required to work for the purpose of meeting with Employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. In so doing, the Union shall not disrupt the Licensee’s business and will act consistently with MAUCRSA and Local. Cannabis Ordinances. Subject to applicable law, the Licensee will cooperate with the Union in making reasonable arrangement to permit Union representatives to meet with Employees in areas where the Employees will be able to speak to the Union Representative without monitoring by the Licensee. To the extent the Licensee has video surveillance equipment throughout its facility consistent with the law, the parties agree that such equipment will not be utilized to garner information regarding concerted activity or workers’ rights under this Agreement. Labor Peace Agreement2.7 1261 Wishon OPCO, LLC • District 1 • • • 74 2.8: WORKFORCE PLAN Our success in Fresno depends on having a robust and engaged workforce. Without it, we would not be able to deliver the high-quality cannabis goods that our customers deserve or serve as leaders and partners in enhancing the overall community. Current economic challenges facing Fresno, skills gaps in the workforce, and a minimum wage that has not kept pace with the cost of living—all these issues align to make workforce planning an immediate priority for us. Our workforce influences every aspect of operating our storefronts at a high level. Thus, in accordance with FMC Section 9-3316(b)(3), we are committed to taking responsibility for building a robust and ready workforce in Fresno through the workforce plan set forth below. KEY PERSONNEL Cookies’ Fresno owner Kacey Auston will oversee the program. Reporting to Kacey, District Manager Melissa Campos, head of HR Heather Ewing, will recruit, track, report the progress on our workforce commitments. Moreover, they will monitor and revise the program as needed. Monitoring implementation and evaluating results provides the information to ensure that our workforce planning strategies are being implemented as planned, and, most importantly, the strategies are having the desired impact. Our Commitment to Local Hire. Cookies is committed to hiring at least 30% local residents. In fact, consistent with our other stores, we have set an internal target of 90%. In order to contribute to the economic stability of the city and its residents, we must ensure that we are utilizing the local workforce to operate our stores. As a locally owned business, Cookies Fresno owner Kacey Auston’s vision is to create dozens of middle-class jobs for Fresnans. As a result, recruiting and hiring local residents is an essential component of our workforce plan. We have set forth the goal of 90% local hire, which is consistent with our local hiring rate at other Cookies locations. To reach this target in Fresno, we will employ a variety of recruitment strategies to reach local residents, including targeted job postings on indeed.com and other job websites, engaging with local non-profits such as Poverello House and other community organizations, and hosting local job fairs. Our outreach for local hire has already begun. Prior to submitting this application, we twice posted job ads for locating a general manager in Fresno. Our hiring practice is to first hire a general manager and then to fill in subordinate positions. Similarly, we scheduled a job fair and community outreach meeting at our location. However, Covid-19 heath orders prevented us from holding an in-person gathering. Additionally, to supply a pipeline of local applicants, we have also joined the Fresno Chamber of Commerce, the Fresno Metro Black Chamber of Commerce, and the Hispanic Foundation. We believe the investments we make in staff training and education will also help to recruit local talent. To measure the progress on our commitment, we will track how many employees reside in the city of Fresno. We believe that we will be able to meet this goal before the grand opening of our retail storefront. District Manager Melissa Campos and head of HR Heather Ewing will implement this component of our workforce plan and track our progress. Owner Kacey Auston will review hiring data on a quarterly basis. Our systematic approach to local hiring will ensure that we meet our local hire goals in Fresno. Our Commitment to Apprenticeship: Cookies is committed to an apprenticeship program that trains its workforce to become skilled in the cannabis industry. Our goal is to implement an apprenticeship and training program that provides our employees with new skills. The education and training of the workforce is an integral piece of workforce planning and development. Effective education includes not only new workers entering the cannabis industry but also the existing participants in the entire cannabis supply chain. Our apprenticeship program is designed to create a pipeline for entry into middle-skills jobs. We have set forth a development program that reflects our commitment to apprenticeship, through training, education, and continuing education opportunities. At Cookies, we do not require a college degree to work at one of our stores. We teach workers everything they need to know in order to do the job. In addition, our employees are paid during training. Our training includes on the job training, employee shadowing, and classroom training. As a vertically integrated cannabis business, we also offer to interested employees the opportunity to acquire technical skills in the different points of the supply chain, e.g. cultivation, manufacturing, and distribution, as well as at our corporate office. For those on a management track, we provide leadership training. We also support continuing education and provide education support to select employees. We have a strong track record of promotion from within. Workers at individual stores have progressed to leadership positions at Cookies corporate. Our executive team evaluates our training and apprenticeship program annually. For example, we will track and analyze the cost of the program, the productivity of workers, the turnover rate of employees, the number of employees who advance into management position, our overall recruitment costs, and the number of mistakes or errors. We believe that our apprenticeship program leads to well-trained, loyal, and capable workers who want to grow with our company. Our Commitment to Paying a Living Wage: Cookies is committed to playing its employees a living wage. Providing access to jobs with family-sustaining wages, excellent benefits and opportunities for advancement is a foundational principle for our workforce development. At Cookies, we have a starting wage of per hour plus a comprehensive benefits program, including a 401k retirement fund. Our average hourly wage in Fresno will be per hour. We recognize that many employers in Fresno Workforce Plan 2.8 1261 Wishon OPCO, LLC • District 1 • • • 75 pay the minimum wage. But we are a locally owned and operated business that is invested in the future of Fresno. We will deliver on this commitment on day one. Kacey Auston and our leadership team will renew our wage structure based on changes to the cost of living and profitability. For example, we recently increased our starting wage per hour across our California stores. Our Commitment to Diversity. Cookies is committed to having a diverse workforce that is reflective of the community. As the largest minority-owned cannabis business in the United States, having a diverse workforce ensures that employment is equitably distributed throughout the city. Our goal is to allocate 60% of all working hours to women and people who identify as minorities. In order to ensure diversity, we will advertise job opportunities with business groups that serve minority populations including the Fresno Metro Black Chamber of Commerce and the Fresno Area Hispanic Foundation. We will also target groups that serve women in business including the Fresno Women’s network. We will place job advertisements in publications that serve minority and women readers, including Fresno’s Black newspaper The California Advocate and Vida En La Valle. We will also rely on our community non-profit partners to identify candidates, including Poverello House, United Way, and Breaking the Chains. We believe that we will be able to reach our diversity target within our first year. At the same time, we recognize that these hiring goals are not quotas and we will comply with being an equal opportunity employer. We will track the demographic makeup of our workforce. Owner Kacey Auston, District Manager Melissa Campos, and head of HR Heather Ewing will implement and oversee our hiring program. We will track our progress annually and produce an annual report to hold ourselves accountable to our hiring goals 2.9: COOKIES SUPPORTS SOCIAL EQUITY BUSINESSES IN FRESNO Cookies is committed to serving as a social equity incubator for social equity businesses in Fresno. Our co-founder Berner, then a budtender, started Cookies in his garage when he saw from the earliest days of regulated cannabis how it could empower people. However, when Berner started his business, there were no social equity programs and incubators. In fact, there was no help whatsoever for individuals, especially for low income individuals and minorities, looking to enter the business. The growth of Cookies has shown first- hand the transformational power of entrepreneurship. This is a lesson our owner Kacey Auston knows as well. As a single mother struggling to survive, she started her public affairs business in Fresno in 2005. Her local business transformed her life and provided a better future for her family. Both Berner and Kacey are self-made entrepreneurs who bring a commitment to empowering others so they may achieve their business goals. There is a huge diversity gap growing within the cannabis industry. MJBizDaily recently reported that women and minorities are a small make-up of cannabis businesses, where 75% of leadership roles are held by men. We are committed to helping equity start-ups to grow. We have helped bring Grandiflora to everywhere Cookies goes, whether we have a retail footprint there or not: including Arizona, Colorado, Washington, Oregon, Michigan, Oklahoma, Nevada, Maryland, Massachusetts, and Illinois. As explained in more detail below, we have collaborative programs which help people solve problems associated with launching a start-up by providing technical support, brand support, micro loans, mentoring, training and other benefits. SOCIAL EQUITY TECHNICAL SUPPORT Cookies wants to support local social equity applicants in Fresno. The biggest barrier to entering the regulated cannabis industry is obtaining a license. We provide technical support to empower social equity applicants. Our personnel serve as experts providing guidance and support to social equity applicants. Our work in Fresno will concentrate on identifying opportunities for equity applicants in and around Fresno. We will lend expertise on preparing applications, developing operations plans, securing real estate, training, and raising capital. Cookies Head of Licensing Marcus Vik will provide technical assistance on preparing a competitive application and navigating the community outreach and engagement. COO of Retail David Chiovetti will assist on retail best practices and operations plan development. Director of Compliance Aaron Herzberg will aid on securing a compliant location and negotiating with landlords. In total, we will commit 100 hours towards this program annually. If possible, Cookies will collaborate State Center Community College on social equity educational programming. Like we collaborated with the initial social equity groups in San Francisco, we intend to collaborate with any social equity focused non-profits that may form in the future. This program is helpful because it will give Fresnans opportunities for self-employment and business growth. MENTORSHIP PROGRAM While this application is for a retail permit, Cookies is a vertically integrated cannabis business, consisting of cultivation, manufacturing, and dispensing operations. We offer equity applicants an opportunity for individuals to learn the science, technology, business, marketing and sales skills required to be successful in the cannabis industry. Individuals from areas of disproportionate impact, as well as minorities, women, veterans, people with disabilities, people of all gender identities and sexual orientations and persons with drug offenses on their records, can apply for our Mentorship Program to help them gain hands-on experience. Cookies Supports Social Equity Businesses in Fresno 2.8 - 2.9 1261 Wishon OPCO, LLC • District 1 • • • 76 As Cookies co-founder Berner explained our mentorship program on the nationally syndicated radio show The Breakfast Club: “We are doing something different at Cookies. Big businesses are coming in and trying to push people out [of] the culture. We are going to really bring people in and teach them and let them know you have a right to be in the business. We’ll show you how to get in the business. We got the distribution, the manufacturing, the production, we got the knowledge. My breeders are creating new strains all the time. Instead of just using people for equity program, I’m giving back all the time… To actually put people in the game and document it and show people still care is going to be interesting” Participants in the mentorship program can carry over the skills obtained over a range of professional pursuits in the cannabis industry. Cookies has a long history of supporting social equity businesses. We launched the first Black-owned cannabis business and first social equity business in San Francisco: Berner’s on Haight. This project has changed the life of local resident Shawn Richards. He is now a leader in the local community, serving as a member on the San Francisco County Cannabis Oversight Committee, a seat that must be held by the owner of a licensed cannabis storefront retailer. In addition, we also made Grandiflora, an unknown equity brand in Oakland, an overnight sensation by featuring it in our stores. Alongside the Cookies brand, we are in the process of rolling out Grandiflora on a national level. In particular, we are excited to bring Grandiflora to Florida in 2021 as the first social equity brand to enter the state. Whenever possible, Cookies contracts with equity cultivators to grow its products in markets outside of California. We have entered into an agreement with a social equity cultivator in Massachusetts to grow Cookies cannabis. Our dedication to equity has brought many individuals into regulated cannabis who otherwise would have been kept out. SOCIAL EQUITY BRAND SHELF SPACE Cookies features local equity brands on its “Local Fire” social equity brand shelf. The Local Fire shelf is an initiative to elevate small social equity businesses and facilitate consumer support for a diverse cannabis industry. We make it easy for customers to make their voices heard with their wallets. We commit to a target of 20% shelf space for Local Fire. The Local Fire shelf space is located in prime space and is prominently featured. Unlike other businesses, we do not charge slotting fees for inclusion on the Local Fire shelf. Our customers want hyper-local cannabis product and we are thrilled to support local equity brands. We have a dedicated social impact team that scours the surrounding area looking for up and coming equity growers and manufacturers. Once the products pass quality control, we do what we can to support the business and promote the brands. We understand the cost of doing business and want to see equity businesses succeed. Thus, we extend preferential payment terms to social equity businesses with whom we work. By supporting local equity businesses, we hope to fortify a local supply chain, keep money within the Fresno community, and encourage entrepreneurship locally. LOANS Cookies supports loans for equity cannabis business. We are in discussions with the Fresno Economic Opportunity Commission to provide an annual donation for the purpose of EOC issuing loans to social equity cannabis applicants. We have a history of providing loans and grants to social equity businesses. In Michigan, we partnered with a local brand Gage on a social equity dispensary. Under the terms of the equity program, we and Gage agreed to share with social equity participants in cities disproportionately impacted by cannabis prohibition. Similarly, in Massachusetts, we provided equity applicants loans through Green Soul Development Foundation, which is a nonprofit social equity incubator. LEGAL ASSISTANCE Cookies’ Director of Compliance Aaron Herzberg also maintains a law firm for cannabis business: Puzzle Law Group. Cookies and Aaron have agreed to provide social equity applicants with legal services relating to real estate contracts, entity formation, and compliant cannabis operations. The Puzzle Law Group will donate up to 50 hours of pro bono services, which is valued at . The donated legal assistance will provide equity applicants with a solid foundation for their business. EQUIPMENT DONATION As one of California’s premier cultivators, Cookies has access to cultivation equipment for lower prices than the general public. If awarded a cannabis license in Fresno, we will donate worth of Hortilux grow lights to a social equity applicant. The grow lights will help a social equity applicant alleviate some of the financial challenges of entering the regulated market. Cookies Supports Social Equity Businesses in Fresno 2.9 1261 Wishon OPCO, LLC • District 1 • • • 77 3.0: NEIGHBORHOOD COMPATIBILITY PLAN Cookies’ success stems from our localized approach to business that reacts and evolves with the needs of each community we serve. We prioritize transparency, accessibility, and compliance when interacting with our neighbors and our local community. We represent the best in community and culture and, in addition to emphasizing quality and innovation, strive to provide guided service to our customers in a facility that is both comfortable and locally relevant. Our neighbors and customers can rest assured in knowing that we value their input and their safety in every aspect of our day-to-day operations. At Cookies, we have an opportunity to not only to provide high-quality products and services to our customers but to also develop meaningful connections and avenues of communication within our community. Our Neighborhood Compatibility Plan has been developed to address some of the most common complaints against cannabis retail stores, including security, property maintenance, unregulated market contributions, litter and litter nuisances, odor, and noise. Additionally, our Neighborhood Compatibility Plan is flexible and adaptable to circumstances that may arise—our team will continually evaluate the impact we have on our neighborhood and is ready to proactively avoid any situation that could be a nuisance or have a negative impact on our community. Above all, we will emphasize open community-focused communication and nuisance abatement in our operations. LOCATION. The planned location of Lemonnade’s retail storefront is on North Wishon Avenue and East Fern Avenue, at the center of Fresno’s popular Tower District neighborhood, surrounded by several neighborhood-serving businesses, including a bakery, a barber shop, a post office, a dollar store, a market, renowned live theater venues, and various shops and restaurants. The facility is conveniently located right off Highway 180 (the “Sequoia-Kings Canyon Freeway”). Being near high-traffic roads, commerce, and commercial neighborhoods, our location is an exceptional site for ensuring our business will be easily accessible to Fresno residents and to traffic on the Sequoia-Kings Canyon Freeway. Our retail location will help cultivate a natural synergy with surrounding businesses. The proposed location is surrounded by establishments frequented by neighborhood residents and visitors, providing them a one-stop-shopping experience. Customers will be encouraged to visit local markets and restaurants for their shopping needs, and our employees will provide recommendations to local breweries (Sequoia Brewing Company) and coffee shops (Hi-Top Coffee) to inquiring patrons. Similarly, those initially drawn to these other businesses—thanks to the area’s commercial nature and to the facility’s proposed location next to busy roads and highways—will easily be able to locate our space, driving business to our location without drawing unwanted attention. Our location is also in compliance with Fresno’s location requirements as outlined in Sections 9-3307 and 9-3329. Our location at North Wishon Avenue and East Fern Avenue is zoned CMS and meets the zone’s development requirements. We are more than 800 feet away from any school, day care center or youth center. Our building will be fully enclosed with no cannabis products visible from the public right-of-way. Our facility will be constructed to eliminate the detection of cannabis odors off-site. We will also be fully compatible with character of the neighborhood and the existing buildings, ensuring that signage is limited to business identification purposes. In addition, we will produce a signed and notarized statement, prepared by the City Attorney, demonstrating our legal right to occupy our location as a cannabis business. We have obtained a Zoning Inquiry Letter, which we are uploading with this application. 3.1: NUISANCE COMPLAINT RESPONSE Cookies has developed a system for responding to complaints from the public. We have implemented our nuisance complaint response procedures across our 21 locations. We regularly update this procedure in response to changing conditions. Our nuisance complaint response is compatible with both urban and suburban locations. RESPONDING TO COMPLAINTS. Cookies takes complaints seriously. In all aspects of our business, we strive to maintain positive relations with our neighbors while constantly improving our operations. Thus, we have established complaint intake, investigation, and response procedures. Our complaint resolution procedures will ensure good relations with neighbors while maintaining an efficient and effective chain-of-command. COMPLAINT INTAKE. Cookies has established numerous channels for receiving complaints. These channels include our website and telephone, social media platforms, and in-person visits. We will make it clear to neighbors through direct outreach and posted signs at our facility that we are welcoming of any complaints related to light, odor, noise, litter, vehicles, or traffic. We will train each of our employees on how to record a customer’s complaint. Our employees will record the name of the person filing the complaint, a description of the circumstances leading to the filing of the complaint, references to applicable company operations relating to the complaint, and a description of the remedy sought. We will also record the complainant’s contact information so we can follow up after the investigation. Complaints may also be received by our majority owner, CEO, and Community Relations Contact Kacey Auston who is available 24/7 by phone and email. Kacey is a lifelong Fresnan and public affairs professional who specializes in public communications. An emergency contact name and number will be provided to the City Manager so that they are able to reach someone at Neighborhood Compatability Plan3.0 - 3.1 1261 Wishon OPCO, LLC • District 1 • • • 78 our facility at any time of day in accordance with § 9-3309(g). Kacey will also serve as the emergency contact. COMPLAINT INVESTIGATION. The General Manager will be charged with investigating complaints but may delegate this responsibility to a qualified employee. Complaints will be investigated in a manner commensurate with the nature and scope of the complaint. Investigations will be timely, impartial, and complete. The investigating parties will document or assemble evidence necessary to arrive at a decision on whether a nuisance exists. The investigating party may conduct interviews, review security footage, examine records, or conduct any other reasonable action to determine the existence of the complaint. For odor, light, noise, and traffic-related complaints, the General Manager will investigate the following: For odor, light, noise, and traffic-related complaints, the General Manager will investigate the following: Odor • Check whether carbon filters are working properly • Check maintenance logs and whether filters need to be changed • Check whether windows and doors are closed • Check HVAC system and how it is expelling air Light • Check whether bulbs are proper wattage • Check whether light shields are downward facing and working properly • Check common-area lights and follow up with property management Noise • Verify whether noise can be heard outside of premises • Verify dispensary is not playing loud music inside • Verify crowds are not gathering outside • Verify doors and windows are closed Traffic • Check parking lot for existence of complaint • Verify all parking-related signage is in working order • Check security cameras at date/time to verify existence of complaint Once the investigation commences, the General Manager will make a recommendation and take corrective action. COMPLAINT RECORDS. The General Manager will document the conclusion of the investigation and recommendations for corrective actions. In addition, we will record any corrective action taken in response to the complaint. We will maintain a file of all complaints and outcomes in the course of our recordkeeping. The documentation will be clear enough that anybody reviewing the records can determine that a clear, well-reasoned, and diligent effort to resolve the complaint was undertaken. Records relating to complaints will be maintained for at least seven years. FOLLOW UP WITH COMPLAINANT. The General Manager will notify the complainant of the outcome of the investigation. If the complaint cannot be corroborated, the General Manager will notify the complainant and explain that the complaint was investigated but no definite source was found. The General Manager will encourage the complainant to notify us in the future if they observe unacceptable light, noise, odor, litter, or traffic. The General Manger will also emphasize that notification should be made as soon as possible to enable us to investigate and resolve the problem. CORRECTIVE ACTION. If a complaint is substantiated, we will implement a corrective action plan to ensure the issue or condition does not occur again. Corrective action may include but is not limited to revising policies and procedures, training and retraining staff, and utilizing third-party experts. For odor complaints, we will repair ducting or door seals and replace carbon filters or add additional filters to our HVAC system. For light complaints, we will repair light shielding. For noise complaints, our security guards will disperse crowds or contact law enforcement. For litter complaints, we will immediately clean the area surrounding our facility. For traffic and vehicle complaints, our security guards will direct vehicles to appropriate parking spaces. Our designated security representative will be available to report operational issues related to nuisances to the City Manager as outlined in § 9-3310(b)(2). 3.2: PROACTIVE MANAGEMENT TO AVOID NUISANCES Community connection is key to our success. As a locally owned business, we appreciate the privilege of operating a cannabis business in Fresno. Lemonnade is committed to ensuring our operations do not impact neighbors. In order to prevent nuisances from arising, we will implement several policies both before and after licensure to promote open communication with neighbors and nuisance prevention. We will ensure our operations do not adversely impact the quality of life in the neighborhood. COMMUNITY RELATIONS CONTACT. Cookies believes it is imperative to maintain open and effective communication with neighborhood members to Nuisance Complaint Response3.1 - 3.2 1261 Wishon OPCO, LLC • District 1 • • • 79 address their concerns and to protect our commitment to service and community. As evidence of our commitment to being a positive and proactive neighbor in our community, we have designated our majority owner and CEO Kacey Auston-Tibbetts to serve as our Community Relations Contact.. Kacey is a long-term Fresno resident and trusted public communications professional. Kacey helps small and minority-owned businesses, non-profits, and large corporations including Mid Valley Disposal, Producers Dairy, the United Way of Fresno and Madera Counties. And true to her origins, Kacey continually provides pro-bono mentorship to women-owned and small business startups—exhibiting her resolute will and personality as a spirited example of leadership and success in Fresno. She will be available to receive community complaints 24 hours per day via mobile telephone and/or email. Prior to commencing operations, we will provide Kacey’s contact information to all businesses and residences located within 600 feet of our facility. FMC § 9-3309(m)(1). We will also post her contact information on our storefront’s main entrance and on our website. Any community complaints will be promptly addressed in the order received, and non-anonymous complainants will be responded to politely and with utmost professionalism. During the first year of operation Kacey will attend meetings with the City Manager to discuss costs, benefits, and other community issues arising as a result of the implementation of the cannabis program. After the first year of operation, Kacey will be available to meet with the City Manager as requested. Kacey is well-suited for this role as her background is as a professional public affairs consultant in Fresno CANVASSING AND COMMUNITY RELATIONSHIPS. In order to nurture relationships with community members and to provide neighbors with Lemonnade’s’ Community Relations Contact’s contact information, our Community Relations Contact will canvass local neighborhoods within 600 feet of our store prior to licensure. During each introductory meeting with local residents, our Community Relations Contact will provide information about our operations and core values, and each local resident who is contacted will be given an opportunity to ask questions and express their concerns. The Community Relations Contact will provide answers to any questions in a timely manner and will make note of any community concerns that will inform our operations and our commitment to be a good neighbor. QUARTERLY TOWN HALLS. We believe that clear and frequent communication – especially at events conducted in person – is key to achieving a positive impact on the communities in which we operate. Thus, we are looking forward to hosting a quarterly town hall with the local community. Our owner, CEO, and Community Relations Contact Kacey Auston will coordinate this public outreach and listening sessions by reaching out to the community to inform them of the time and place and opportunity to provide feedback on our operations. Our goal is to foster an inclusive environment where neighbors feel safe asking questions and providing feedback about our costs, operations, and philanthropy, among other things. Local stakeholders, including neighbors, business leaders, local government, and community stakeholders will be invited to attend. Information about these meetings will be communicated, a minimum of two weeks in advance, via: 1) email to community stakeholders, as well as every member of our mailing list, 2) snail mail to residents and businesses within 1,000 feet of the Facility, 3) social media posts, and 4) flyers posted at the storefront. Included in these outreach efforts will be a request for ideas and feedback on items that should be included in the agenda. We will accept ideas for agenda items via snail mail, email, social media responses, phone calls and messages left at the storefront. At every meeting, we will have employees greet attendees, as well as be available to answer questions, informally, before and after the event. We will have a sign in sheet for those interested in continuing to receive information about our operations. During the meeting, a member of staff will diligently take notes of all comments and concerns from stakeholders that require follow up. We will also record our meetings, and send, upon request, to members of the community who were interested in attending, but unable. Every meeting will begin with a brief welcome and introduction by Kacey Auston to make the crowd feel comfortable and outline the agenda items. Every meeting will include a question and answer session as well as a report of our efforts to address comments and concerns since the last meeting. Additionally, to help target our planned benefits for the community, we are cultivating partnerships with neighboring businesses and area business associations. We have become members of the Fresno Chamber of Commers, the Fresno Metro Black Chamber of Commerce, and the Fresno Area Hispanic Foundation. We intend to utilize our membership in these civic groups to facilitate beneficial conversations between business professionals, community leaders, and the cannabis industry. Our relationship with the three major chambers of commerce demonstrates our commitment to forging synergistic relationships with local Fresno businesses. GOOD NEIGHBOR POLICY. Cookies has always and will continue to place emphasis on becoming an integral part of our community by earning the appreciation and respect of our neighbors. We will maintain a company-wide Good Neighbor Policy to manage business operations in a way that is beneficial and unobtrusive to all neighbors and helps improve the community. Our Good Neighbor Policy will focus primarily on maintaining solid community connections, keeping the neighborhood safe, and promoting neighborhood accessibility and cleanliness. Specific examples of our policy objectives include: Proactive Management to Avoid Nuisances3.2 1261 Wishon OPCO, LLC • District 1 • • • 80 Community Connections. Creating an inviting, safe store that will be part of the fabric of the Fresno community. Having a full-time Community Relations Contact whom residents and merchants can contact any time. Working closely with neighborhood and merchant groups, community members, local police, and city officials and being responsive to their questions and concerns. Hiring to support the cannabis equity community. Hiring locally, whenever possible. Patronizing local service providers, suppliers, and artists whenever possible. Advocating for the Fresno community—our residents, merchants, and organizations. Cookies has joined the Fresno Chamber of Commerce, the Fresno Metro Black Chamber of Commerce, the Central California Hispanic Chamber of Commerce, and the Fresno County Economic Development Corporation. Safety. Securing the premises and providing security guards to patrol the block for suspicious or criminal activity. Maintaining high-quality security cameras inside and outside of the store, and friendly, professional guards on staff. Discouraging the sale of unregulated, untested cannabis and continuing to advocate for legalization and regulation. Access and Cleanliness. Maintaining the store, entryway, and adjacent sidewalks in good condition at all times. Prohibiting double parking outside the store and ensuring customers, contractors, and staff do not obstruct transportation on nearby streets. Prohibiting loitering and public consumption of cannabis products in or around the premises. Prohibiting littering in and around the premises and actively cleaning any litter seen. Posting clear, well-lit, and prominently displayed notices at the store’s public entrance and exit that: Direct patrons to leave the establishment and neighborhood peacefully and in an orderly fashion; Direct patrons not to litter or block driveways; Advise individuals of the prohibition on loitering; and Advise individuals that smoking cannabis is prohibited in public places. NUISANCE PREVENTION PLAN In addition to standard management practices to mitigate nuisance, the Nuisance Prevention Plan targets the following nuisance behaviors for customers or other individuals that may come within contact of the premises: y Disturbances of peace y Open public consumption of cannabis or alcohol y Excessive pedestrian or vehicular traffic Illegal drug activity y Harassment of passerby y Excessive littering y Excessive loitering Illegal parking y Excessive loud noises, especially late at night or early in the morning hours y Lewd conduct y Police/sheriff detentions and arrests In addition to standard management practices to mitigate nuisance, the Nuisance Prevention Plan targets the following nuisance behaviors for employees: y Improper delivery vehicle maintenance and storage outside of the designated area of the parking lot y Remaining on the premises after the end of a designated shift y Consumption of cannabis y Using compliant packaging if employee purchases have been made The COO will be responsible for developing the Nuisance Prevention Plan and the Community Relations Contact will be tasked with implementing the plan along with the Compliance Director and security personnel. Security personnel have longstanding ties to the Fresno Police Department and will be the first defense against nuisance, observing and reporting crime, and enforcing the rules of the dispensary. All employees and security agents will be trained to enforce the Nuisance Prevention Plan to facilitate our continued operation as a socially responsible CCB. The Nuisance Prevention Plan also reinforces our commitment to federal enforcement priorities, including preventing diversion of cannabis. More detail regarding diversion prevention is covered in 5. Security Plan. LOADING AND UNLOADING. When performed without proper planning, the acts of loading and unloading cannabis products can negatively impact a community in several ways. If a designated loading and unloading area is not carefully chosen, delivery vehicles could obstruct parking lots, streets, or driveways. Additionally, delivery vehicles could be considered a visible nuisance, and, because of the great value of items transported by cannabis Proactive Management to Avoid Nuisances3.2 1261 Wishon OPCO, LLC • District 1 • • • 81 delivery vehicles, loading and unloading periods could be vulnerable to theft if they are not adequately protected. Lemonnade’s building and location will allow us to load and unload products in a way that neither obstructs local traffic nor minimizes visibility and that facilitates the safety of our staff and local residents. To drop off shipments, cannabis distributors will be required to park in the van-accessible loading area of the parking lot, which is inconspicuous and separated from the public roadway by our building on one side and professionally maintained landscaping on the other. Inventory will only be received through a rear entrance that is not publicly accessible. Receipt of inventory will only take place in the presence of management and at least one of our security guards to ensure products are safely received and placed into storage without issue. Moreover, we will only receive shipments during the hours of 9:00 a.m. to 5:00 p.m. This will ensure noise from loading and unloading does not impact neighbors. EXTERIOR MAINTENANCE AND COMMUNITY BEAUTIFICATION. Lemonnade’s proposed location for the storefront is in a premier shopping and dining destination that draws both local visitors and tourists. The commercial properties on and surrounding North Wishon and East Fern are well maintained and aesthetically attractive to both consumers and tenants alike. The property management company is responsible for keeping the proposed facility in good order. We are committed to doing our part to maintain the premises. Our policies and procedures provide for the restoration of any area defaced by graffiti by painting over the area with a color that matches the original design scheme or by removing the graffiti within 24 hours of an occurrence. Security guards and employees will check for graffiti routinely and report any instances discovered to management, who will arrange for prompt repainting or removal. If we are ever unable to restore a defaced exterior area through repainting or cleaning, management will contact the City of Fresno to arrange for graffiti removal and any necessary exterior repairs or restoration. In addition, the property on North Wishon and East Fern contains plants and other vegetation. The property management company is responsible for maintaining these plants. We will make sure the plants are well manicured and healthy, and that trees and grass are trimmed regularly. We have identified the landscaping company responsible for maintenance and will contact the landscaping company if any nuisance issues arise. NOISE REDUCTION. Part of being a good neighbor means not being a nuisance to nearby businesses and residents—taking precautions to ensure our operations go unnoticed by those outside of our facility. As such, out of courtesy to our neighbors, we will prohibit the use of outdoor speakers and pagers. We will only play ambient music inside of our store and will refrain from playing music loud enough for neighboring business to hear it. All noise generated by our business operations will be kept to levels that are undetectable to observers beyond the premises to help maintain positive relationships with those in our community. LIGHT. We will address lighting proactively to ensure light pollution We will address lighting proactively to ensure light pollution does not adversely impact neighbors. Although there are no residential properties directly adjacent to the facility, we are aware of the office building to the northwest and the residential apartment buildings and homes to the north. While light can at times negatively impact neighboring properties, this is not the case with the proposed location. Our building was built in 1958 and enjoys a positive relationship with our surrounding neighbors that we will not disrupt. We will manage light in three ways. First, we will not illuminate our premises at night except to the extent necessary for security operations. Second, we will not utilize an illuminated neon sign. The City of Fresno has imposed sign conditions applicable to the proposed location. One such condition prohibits the use of illuminated signs. FMC § 9-3309(h)(5). Third, the facility’s exterior lighting utilizes shielding. Downward-facing shielding ensures that light is not directed onto neighboring properties. Our proactive management of light ensures that light will not adversely impact neighboring properties. ODOR REDUCTION. Lemonnade’s’ goal is to keep cannabis odors undetectable. We will manage odors proactively in multiple ways. Our Odor Management Plan is set forth in more detail below. Firstly, we will utilize carbon filters to neutralize cannabis odors. Carbon filters are industry standard and scrub cannabis odors from the air. Secondly, our odor control system utilizes negative pressure to draw clean air into the cannabis facility. Thirdly, we will only sell prepackaged goods. Fourthly, cannabis consumption will be prohibited on site in accordance with § 9-3309(a). Finally, we will monitor the environment for the presence of cannabis odor. Security will patrol the premises, as well as the surrounding block, and report to management if cannabis is detectable outside the retail premises. PARKING AND TRAFFIC. The facility on North Wishon and East Fern has 36 parking spaces, including 2 ADA accessible spaces, exclusively reserved for our customers. Although we do not foresee our customers having any trouble finding allocated parking in our parking lot or along East Fern, we will take precautions to prevent our customers from inconveniencing our neighbors by parking in spots reserved for patrons of other businesses or in surrounding residential areas. This will be accomplished by posting parking instructions inside and outside of our building and by providing customers with a written Proactive Management to Avoid Nuisances3.2 1261 Wishon OPCO, LLC • District 1 • • • 82 description of the suitable dispensary parking areas during their first visit. Additionally, our external security guard will be instructed to monitor the parking habits of our customers and to intervene politely when customers park in violation of our Good Neighbor Policy. Security will patrol the parking lot and surrounding block regularly to ensure our customers are parking in the right spots. If parking becomes an issue at any time, our security guard will help direct traffic to avoid congestion and to promote traffic flow in the parking lot and surrounding areas. Similarly, if a line of our customers forms outside of our store, our security guard will manage the line, so it remains orderly and does not obstruct the parking lot or walkway in front of our building or neighboring properties. PEDESTRIAN TRAFFIC. We will manage pedestrian traffic proactively to reduce nuisances. We anticipate two situations whereby pedestrians can adversely impact our neighbors’ day-to-day business. The first is pedestrian traffic in areas not designed for pedestrians. The second is large gatherings of customers on the premises. The proposed location is designed to manage pedestrians and keep them safe. The location contains two points of ingress and egress for cars, and one for pedestrians. We will advise pedestrians to enter on Wishon Avenue. The Wishon Avenue entrance provides access to pedestrians without burdening automobiles accessing the facility. If necessary, we will install a sign identifying the pedestrian entrance on Wishon Avenue. In addition, the location contains an internal pedestrian sidewalk, which is separate from the parking lot utilized by cars. Security will monitor the location to ensure customers are accessing the property safely and utilizing the pedestrian sidewalk. Second, an influx of customers may impact neighboring businesses. Other than a grand opening, we do not anticipate a large crowd ever gathering at the property. Our security guard will patrol the property to ensure crowds do not gather in front of our store, pedestrians are able to access the premises on Wishon Avenue, and pedestrians do not loiter in the alley behind the building. LITTER. Lemonnade strives to maintain cleanliness and safety around our facility and will work proactively to prevent littering and loitering outside of our building. Signs prohibiting both activities will be posted conspicuously on the outside of our building and in the lobby, and our staff will be trained to check for litter on and in front of our premises, as well as on public sidewalks within 100 feet of our building multiple times a day – this will occur, at a minimum, during opening and closing procedures, as well as at shift changes. Staff will be trained to pick up and immediately dispose of any litter they come across. We will continually come up with creative solutions to reduce litter and remain in good standing with members of the Fresno community. Proactive Management to Avoid Nuisances3.2 1261 Wishon OPCO, LLC • District 1 • • • 83 SECURITY. Cookies has always prioritized ensuring our customers have an enjoyable experience at our locations. To that end, ensuring customers feel safe and secure both within our facility and in the surrounding neighborhood is imperative to customer satisfaction. Our Fresno location will have systems and measures in place to protect our visitors and to make the community safer as a whole. NEIGHBORHOOD SECURITY AND PATROL. Our facility will always be monitored closely for crime and suspicious activity—either by our staff and contractors or by our 24-hour surveillance system. We will keep state-licensed, uniformed security guards on staff to secure our premises at least an hour before operations begin, and they will remain on site until all other individuals have left our premises. At least two security guards will remain on site during hours of operation. One security guard will be assigned to our entryway to track and monitor anyone entering or leaving our facility, while the second security guard will constantly patrol the premises to ensure our security protocols are obeyed. In addition to monitoring the premises, our patrolling security guard will routinely walk a route that enhances the security of the entire block. Starting just outside our customer entrance on Wishon Avenue, the patrolling security guard will walk north, turning to walk east on Fern Avenue along the side of the building. The security guard will then walk north up the alley behind the building, circling the entire shared parking lot and back towards our facility on Wishon Avenue. Security will monitor the parking areas on our property and the surrounding properties. When our security guards and staff are unable to watch closely for crime in the area, our surveillance system will continue to maintain a watchful eye over the premises. We will install a state-of-the-art video/audio surveillance system that utilizes commercial-grade equipment. Cameras will not be readily obstructed, tampered with, or disabled. Our video surveillance system will monitor the entire perimeter and parking lot and will record activity 24 hours per day. Our premises will be well-lit, both internally and externally, and we will use advanced cameras and direct line-of-sight camera placement at the dispensary that will be capable of clearly revealing facial detail and identifying all persons on the premises under all lighting conditions in and around the facility, especially in any area where theft or diversion could reasonably occur. CRIME REDUCTION. Statistics show crime is often reduced in areas surrounding licensed cannabis retailers, which is the result of the increased security and foot traffic the businesses create. In addition to monitoring our neighborhood closely using video surveillance and security patrol, we will work with the Fresno Police Department in the Central District, as well as local neighborhood watch organizations, to ensure our operations contribute to the security of the surrounding community and have a positive impact on the neighborhood. We have already met with Police Chief Andrew Hall to discuss security issues involving the property. We strive to create a positive perception of our business by openly familiarizing law enforcement with our operations and best practices, and by proving that we are a law-abiding player. Moreover, we are optimistic that local law enforcement will see our facility as a tool, rather than a threat, by making our outdoor security cameras and security staff available as a resource to help monitor the surrounding area. 3.3: CANNABIS ODOR MITIGATION STRATEGY The proposed cannabis retail project will not include on-site consumption and all cannabis products that enter the building will arrive prepackaged and sold to consumers in an enclosed container. Therefore, cannabis odor/emissions for this project will be much less odorous than typical cannabis cultivation, drying and extraction facilities. Cookies has developed a comprehensive odor mitigation strategy that includes administrative and engineering controls to abate and respond to cannabis odor detection outside of the building. ADMINISTRATIVE CONTROLS Procedural activities: Lemonnade will take measures to minimize all cannabis odor emitting activities. Cannabis products will only be stored in spaces with cannabis odor mitigation systems as outlined in the engineering controls below. These spaces will include doors with door closers to ensure doors are always closed. Staff training procedures: Lemonnade has an extensive training program that includes training specifically for odor mitigation. The importance of keeping doors shut, changing carbon filters are among the other Standard Operating Procedures that all employees must follow. We will conduct weekly staff meetings at these meetings we discuss odor mitigation and discuss with all employees the importance of keeping up with the processes we have in place. Recordkeeping systems and forms: Lemonnade has a carbon filter maintenance card that we use to track filters monthly. We will store extra carbon filters on-site so that replacing filters can occur in a timely manner. Monitoring and inspection: Every space at risk of emitting cannabis odors will be continuously monitored by daily odor inspections. If a high volume of odor is detected by an employee, they will directly inform the General Manager. If a filter needs to be changed it will be done so at this time. If doors are not closing by themselves, doors will be fixed as soon as the problem is detected. ENGINEERING CONTROLS See attached support documents provided by a Professional Mechanical Engineer at TEP Engineering. 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TRACE 13 SF 6(59,&(&281 26 SF 5(7$,/$5($ 19'-0" [ 29'-11" 96'-7" [ 37'-11" LINE OF SECONDFLOOR ABO9E LINE OF SECOND FLOOR ABO9E S D R A104 1 3 2 4 HUDDLE TABLE FOR CUSTOMER EDUCATION 1 S D R 7(57 ACCESS CONTROLLED DOOR LTER3INE :ALL S D R S D R 3.4: SOURCES OF ODOR. The dispensary floor plan included as part of 6. Location, identifies the areas of the facility where cannabis and cannabis products will be stored, displayed, or handled. These areas have been designated as high-risk areas and will be managed accordingly. An additional low-risk area has been identified and will be subject to the same policies and procedures. Intake Area (high-risk): All incoming shipments of cannabis and cannabis products will be received in the Receiving Room of the dispensary facility. This includes all actions required to finalize transactions between our storefront and licensed distributors. Because large quantities of cannabis and cannabis products will be present in this room, it has been designated as high-risk. Retail Area (high-risk): All transactions with our customers will occur in the at the Service Counter of the facility. Cannabis and cannabis products will be present in this area during normal operational hours. Because large quantities of cannabis and cannabis products will be present in this area, it has been designated as high-risk. Secure Storage (high-risk): The Product Vault will house all cannabis and cannabis products during non-operational hours and During operational hours, a selected amount of cannabis and cannabis products will be removed from the Product Vault and loaded onto the racks at the Service Counter. This reserve inventory will be used to replace stock as it is depleted throughout the day, if necessary. All inventory control, reconciliation, inspection and monitoring takes place here. Cannabis waste will also be stored in a designated section until Gaiaca Waste Revitalization comes to pick it up. The consistent presence of cannabis in this room requires stringent monitoring for odor control. Check-In (low-risk): No cannabis or cannabis products will be stored in the Waiting Area of the dispensary facility. However, because the Check-In is adjacent to the Retail Area and provides a direct point of ingress/egress it has nonetheless been labeled as low-risk. Maintaining the airstream quality in this area will be critical for odor management because this area is the buffer zone between public space and the interior of the facility. Sources of Odor3.4 1261 Wishon OPCO, LLC • District 1 • • • 86 Cannabis Odor Complaint Documentation: The below cannabis odor complaint report shall be  provided to individuals who have observed cannabis odors outside the building at 1264 N.  Wishon Blvd. in Fresno, CA and wish to file a complaint. The observer must provide the details  for the upper portion of this form and submit to the Lemonnade at time of the odor detection.  Cannabis Odor Complaint Report    Name of complainant: ___________________________________________________________  Complainant‘s phone number:_____________________________________________________  Date and time of odor observation: _________________________________________________  Description of location where odor was detected:_____________________________________  ______________________________________________________________________________  ______________________________________________________________________________  ______________________________________________________________________________  _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _   Administrative Use  Date and time complaint was received: ______________________________________________  Description of the activities occurring on site when the complainant detected the odors: ______  ______________________________________________________________________________  ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________  Actions implemented in order to address the odor complaint: ___________________________  ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________  ______________________________________________________________________________  Premise Diagram3.4 1261 Wishon OPCO, LLC • District 1 • • • 87 3.5: ODOR CONTROL DEVICES AND TECHNIQUES. Air inside Lemonnade’s’ facility will be filtered, exhausted, and replaced with fresh air multiple times per hour. We will ensure all areas where cannabis odors are present are sealed and constructed in such a way that they force air to leave the facility only through the filtered ventilation system. This ensures cannabis is not detected offsite in the surrounding area. We will rely on our experience as operators in the cannabis industry to utilize the best practices available in regulating air quality and odor control. We have seen which odor management policies work best in practice and intend to apply this knowledge in Fresno. We will implement proven standard operating procedures (“SOPs”) that ensure our business minimizes our environmental impact, improves air quality for our customers and employees, and serves as a leader in the cannabis industry for community integration and nuisance abatement. Our SOPs will account for all aspects of odor control, including premises inspection and maintenance, HVAC system upkeep, employee training, and community relations. We will mitigate odor through a ventilation and negative air pressure system. The purpose of our ventilation system is to filter and exchange air in areas where cannabis odors are present and to maintain a negative air pressure in those areas, so cannabis odor is not detected outside of the facility. Carbon filtration is currently the best and most effective method of controlling cannabis odor. Air exhausted through our ventilation system will be cleaned by inline carbon filters attached to the ducting. Pleated carbon filters attached to package unit air conditioners on the roof of our building will clean the air entering the premises. This ventilation system will allow for multiple air changes per hour, ensuring that the air inside Lemonnade is fresh and the air outside the facility is free from the smell of cannabis. Negative air pressure occurs when the air being brought into a room is lower than the air being exhausted from it. Precise control of a room’s air pressure can essentially allow for the control of where the air in the room—and the odor with it—can travel. We will install inline fans in the ducting of the building that will afford management precise control over the amount of air being ventilated from a specific room. Rooms where cannabis odors are present will be maintained under a negative air pressure by controlling the fan speed or altering the fan size such that the air exhausted from the room through the carbon filters is always greater than the air being brought into the room. Intake and exhaust vents will be located in the ceiling of all rooms where cannabis odors are present on the business premises. Ventilation lines will consist of R8 insulated ducting and KD sheet metal ducting, helping ensure that no air escapes the ventilation system before it passes through the inline carbon filters. Lemonnade’s air filtration system will also utilize a prefilter to increase the lifespan and effectiveness of the carbon filters. Prefilters ensure dust in the ventilation system does not clog the filter. Carbon filters will be replaced according to a schedule determined by the cubic footage of the rooms where air is being cleaned. The pleated carbon filters in the air conditioning units will be replaced at least once per year. Our owners’ previous experience operating other retail cannabis locations has provided them knowledge about how long these filters last and when they need to be inspected. 3.6: ODOR SYSTEM INSPECTION, TRAINING, AND MAINTENANCE PROCEDURES. INSPECTION. Based on our extensive experience with retail odor control systems, system inspections will occur once every month—a sufficient timescale to identify aging carbon filters before they cause a nuisance. The Inventory Co-Manager will be responsible for developing a reminder protocol to ensure activities are carried out in a timely manner. Equipment scheduled for inspection includes: (i) exhaust and inline fans; (ii) ozone generator; (iii) ventilation ducting; and (iv) carbon filters. In addition, management will conduct an inspection of the premises every morning before opening. We will regularly inspect our filters and replace them if they are releasing a smell near the filter effluent or have reached their lifespan according to the manufacturer’s specifications. If the smell of cannabis odor is detected, management will follow our odor complaint and maintenance procedures. If necessary, we will contact a designated HVAC professional to visit the facility immediately and inspect the system. TRAINING. Lemonnade will train our employees on how to change carbon filters, review internal records regarding filter maintenance, and assess the lifespan of existing filters. Employees are also trained to identify off-site odors so that they may be addressed before they become a nuisance to neighboring businesses or residents. In addition, we train our employees to ensure that they are able to receive and record customer and neighbor complaints regarding cannabis odors. Sources of Odor3.5 - 3.6 1261 Wishon OPCO, LLC • District 1 • • • 88 Our will receive training in Standard Operating Procedures (SOPs) for: y Maintaining and monitoring the odor control system y Monitoring for any detectable odors caused by the presence of cannabis or cannabis product y Product handling to reduce potential for odor exposure y Preventing the exposure of any cannabis or cannabis products to the airstream inside the facility or on the immediate premises y Odor complaint resolution protocol y Preventing any on-site consumption of cannabis or cannabis products that may contribute to offsite odor drift Training on complaint procedures and recognizing off-site odors will occur immediately after an employee is hired. Training on carbon filter inspection, maintenance, and replacement will occur during scheduled maintenance with designated employees shadowing management and maintenance personnel to learn how carbon filters work and how they need to be treated. By training employees on our carbon filtration system, we ensure that any filter-related system errors can be immediately addressed before cannabis odors become a nuisance. MAINTENANCE. The odor produced by the presence of cannabis may present a public nuisance to the immediate community and a financial threat to neighboring businesses. In order to mitigate these risks, Lemonnade will take the required actions to ensure that the odor control system is well maintained, facilitating the ability continually to eliminate any potentially offensive odors or smells from entering the community. This will require that the dispensary atmosphere be scrubbed and flushed at least once per minute and we will commit to carrying out this protocol as part of its Odor Control Plan. Lemonnade will perform monthly systems checks. The maintenance schedule will be consistent with manufacturer’s guidelines and/or whenever personnel or visitors detect a problem with odor control. The odor control equipment will be checked for cleanliness, functionality, integrity of cables, solid electrical connections, full air flow, and unusual odors or sounds. The General Manager or designee (including appropriate vendor) will inspect all odor control equipment to ensure proper operation and to promptly resolve any issues. All fans will be inspected visually each week to ensure proper functionality and all carbon filters will be replaced each quarter. Any information will be logged into the Maintenance Log and, if necessary, downtime for sanitation and adjustments will be scheduled. The Maintenance Log will contain: (i) name of the equipment inspected; (ii) date of the inspection; (iii) name of the personnel conducting the inspection; (iv) notes about the condition of the equipment; and (v) any action carried out to correct or report a malfunction. Records of repair and replacement will be retained for at least three years and will be made available to local or state authorities as requested. The General Manager will supervise the installation and maintenance of an odor control and mitigation system to ensure there are no offsite odors, with a comprehensive focus on cannabis odors. Additionally, security and all staff members will be trained to immediately report any odor problems to the Director of Operations. Director of Operations will maintain the odor control system and will be responsible for scheduled routine maintenance and emergency repairs. General Manager shall review OCMP annually to determine if material upgrades are required to continue ensuring an odor-free environment both inside and outside of the dispensary. We will also hire HVAC professionals with previous experience installing odor control systems for cannabis businesses. These same experienced HVAC professionals will be hired to conduct maintenance on the ventilation and air filtration system. We will ensure that our location is maintained in a clean and sanitary condition and that all odor control equipment maintenance, systems and methodology are executed to incorporate the following regulatory guidelines: International Building Code 2015 International Mechanical Code 2015 National Fire Protection Code (58, 100) National Electrical Code (NFPA 70) American Society of Mechanical Engineers Section XIII International Fire Code 2015 Cookies develops SOPs for monitoring and maintenance to ensure HVAC equipment remains within validated limits conduct regular particle counting testing, the most important parameter to measure to demonstrate consistent compliance with ISO 14644-1. Lemonnade will ensure that cross-contamination is prevented for all products by appropriately designing Secure Storage Room to account for air patterns with differential room pressures. We will ensure that all aforementioned HVAC equipment is well-maintained and in proper order by implementing stringent SOPs for HVAC maintenance. Maintenance protocols shall include: • General Manager scheduling a service appointment in the spring and fall to prepare for seasons when cooling and heating needs will be abundant • For air conditioning system, this involves equipment servicing in late winter or early spring • For heating, this involves furnace and other heating equipment servicing in late summer or early fall Odor System Inspection, Training, and Maintenance Procedures3.6 1261 Wishon OPCO, LLC • District 1 • • • 89 • Cleaning any dirt, leaves or debris outside the main exterior housings for HVAC systems • Inspecting base pans for blocked drain openings • Inspecting any cabinets or coils for leaks • Inspecting fan blades while in motion and stationary to determine damage • Inspecting the control box associated with the unit • Cleaning and replacing all filters • Inspecting for leaks in the ductwork • Inspecting for any unusual odors upon system startup • Listening for any unusual noises upon system startup • Inspecting wiring and connections Once per month, the following maintenance activities will be carried out: • Clean debris and vegetation away from any exterior compressors to maintain adequate airflow • Inspecting and potentially replacing the return air filter Lemonnade will contact HVAC installation vendor at the sign of any initial problems, such as: • Inability for equipment to maintain adequate environmental control • Failure of any automate systems, hardware of software • Energy bills increasing but usage rates remaining the same • Cannabis contamination threat is possible 3.7: WASTE MANAGEMENT PLAN Cookies understands that proper destruction and disposal of cannabis waste prevents defective or unsafe products from entering the market and ultimately being consumed by individuals. This is why we prioritize safe and compliant cannabis waste disposal. From waste collection to storage and recordkeeping, Cookies focuses on the safe and efficient destruction and disposal of cannabis waste. In accordance with California cannabis regulations, Lemonnade will destroy all unsold cannabis goods, including outdated, damaged, deteriorated, misbranded, or adulterated cannabis and will maintain written documentation of each cannabis disposition. The Inventory Manager will perform an initial inspection of cannabis goods upon receipt to check for damaged, misbranded, or expired goods. Dispensary employees will perform subsequent inspections during daily inventory counts and prior to sale to a customer. All cannabis waste will be hauled by Gaica, a waste hauler, to a licensed waste facility. Waste hauler transportation will be scheduled by our General Manager. We will dispose of cannabis waste in lockable containers in a separate designated area of the secured storage room. The cannabis waste area will have multiple main layers of security. Cannabis waste containers will be located in a limited-access area. This area will remain locked at all times and will be under 24/7 video surveillance. Employees will not be able to access the limited-access area without an authorized identification card. Our computer system will create a limited-access log detailing which employees access the cannabis waste area. Cannabis waste containers will also be secured by physical locks. Only authorized employees will have a key to unlock the secure waste container. These security measures will ensure cannabis waste remains secure and is protected from diversion. Cannabis goods intended for disposal will be destroyed by, at a minimum, removing the goods from any packaging or container and rendering them unrecognizable and unusable. Whenever practicable, we will use a destruction method that is environmentally friendly and will result in compostable cannabis waste. For example, cannabis flower will be rendered unusable by grinding the flower and incorporating it with cat litter or yard waste, so the resulting mixture is at least 50% non-cannabis waste by volume. The resulting cannabis waste will be secured in a locked receptacle that is restricted to dispensary employees and authorized waste haulers until it is delivered to a permitted waste facility for final disposition. Lemonnade will use COVA, which integrates with METRC, the state’s Track-and-Trace system, to record the following information within 24 hours of each cannabis waste destruction or disposal: (i) name and type of cannabis goods; (ii) UID of cannabis goods; (iii) amount of cannabis goods, by weight or count; (iv) date and time of destruction or disposal; (v) name of employee performing destruction or disposal; (vi) reason for destruction and disposal; and (vii) entity disposing of the cannabis waste. We will maintain cannabis waste destruction and disposal records for at least seven years, per our recordkeeping procedures. 16 CCR § 5037(a)(7). Once properly recorded, unusable cannabis waste will be promptly delivered to a permitted compostable mixed waste facility for final disposition. Lemonnade will obtain documentation from the waste facility evidencing the date and time of the facility’s receipt of the cannabis waste and will maintain this documentation for at least seven years. 16 CCR § 5037(a)(7). Waste Management Plan3.6 - 3.7 1261 Wishon OPCO, LLC • District 1 • • • 90 Below is Gaica’s procedure for waste removal: WASTE REMOVAL PROCESS 1. Prior Day Confirmation Gaica technicians or logistical office staff will contact the Client’s designated point of contact the day prior to the scheduled pickup, anytime between Lemonnade hours of operation (8am-6pm). If Lemonnade answers, they will either confirm or deny the appointment. If Lemonnade fails to answer or return the confirmation call, the original scheduled pickup time will be assumed con firmed. 2. Pre-Arrival Notification Thirty minutes prior to the on-site arrival of Gaica technicians, the passenger Gaica technician will contact and inform Lemonnade’s designated point of contact of their approaching arrival via phone call. Lemonnade’s designated point of contact will inform the rest of their team that the Gaica waste removal vehicle is in transit so that the Client may begin staging the waste. If the security personnel fails to answer the 30-minute courtesy call, the Gaica passenger tech-nician will try again 15 minutes before arrival. If Lemonnade still fails to answer the courtesy call, the scheduled pickup time will be assumed confirmed. Lemonnade will continue to follow all safety procedures and provide the full drums at the designated pickup area regardless of time delay. 3. Waste Staging Once Lemonnade is notified of the Gaica technicians arrival time, dispensary personnel will stage the full waste drums in the designated area of the Secure Storage Room. Security cameras will monitor the designated Waste Staging Area of the Secure Storage Room from a minimum of two angles at all times. Lemonnade will be cognizant of the Gaica pickup schedule and will not store waste for more than one week prior to pick up. The waste staging must occur prior to Gaica’s arrival. The designated waste staging area of the Secure Storage Room will be accessible and have a clear path of travel to the Lemonnade vehicle loading area. 4. Arrival and Check In These steps should be performed relatively quickly and efficiently to minimize risk times. It is policy that Lemonnade will communicate any access control security measures deemed necessary to the Gaica technicians. When Gaica technicians arrive on-site, they will pull up at the entrance and await the Lemonnade’s security personnel to come out. The security personnel will then validate the Gaica technicians for entry. Once the Gaica technicians are validated, the Lemonnade security personnel will allow the vehicle to pass through. The Gaica vehicle will park in a designated loading area, at a secure location on the premises, within a close proximity to the building, with unimpeded access to the Lemonnade’s waste staging area. 5. Full Drum Removal and Empty Drum Drop Off Gaica technicians will conduct the removal and loading of the waste drums, from the Lemonnade’s waste staging area of the Secure Storage Room to the designated vehicle loading area. 6. Documentation and Departure The Gaica Waste Manifest will document all waste removed from the generator’s Fresno facility, in terms of type, volume, and weight. The Waste Manifest will require the name and signature of the Lemonnade personnel signing off on the waste, as well as the name and signature of the Gaica technician collecting and transporting the waste off-site. Once the removal appointment is complete, the Client’s security personnel will allow for the Gaica vehicle to exit the facility premises. Gaica technicians will wait for the security personnel to return to them with any belongings (IDs, etc.) and perform any closing security measures deemed necessary (sign-out, etc.). Once the waste pickup is complete, Lemonnade employees complete the following tasks: (i) Return handling personal protective equipment (PPE) to designated storage area; (ii) Move empty drums from staging area into appropriate storage or satellite accumulation areas; and (iii) Sweep or clean any areas and/or equipment that was soiled during the procedure. Waste Management Plan3.7 1261 Wishon OPCO, LLC • District 1 • • • 91 INTRODUCTION 1261 Wishon OPCO, LLC (Lemonnade) is planning to develop a retail store commercial cannabis business in Fresno, CA and they have retained The Fire Consultants, Inc. (TFC) to evaluate the project and develop a safety plan to identify applicable fire protection criteria for the facility, as well as policies and procedures for medical emergencies and hazardous situations. This report will identify the major applicable fire protection requirements pertaining to the facility and will serve as the basis of discussion between design team members and the City Manager’s Office along with the Authorities Having Jurisdiction (AHJ), including City of Fresno Planning, Building and Fire Departments. The major design objectives are to protect the occupants and inventory from a potential fire and achieve and maintain compliance with the applicable codes. This report does not provide requirements from the insurer but incorporates these where they have been provided to us by the operator. APPLICABLE CODES The project will be subject to the requirements of the 2019 California Building Code (CBC) and California Fire Code (CFC) with City of Fresno amendments, Fresno Municipal Code and City of Fresno Administrative Regulations for Commercial Cannabis Business. BUILDING DESCRIPTION The 1264 N Wishon (Lemonnade) retail store will be approximately 7,125 square feet, will occupy a tenant space in an existing building built in 1948-50 and will have a layout as shown in Section 4.3. The City-approved floor plan will be finalized later, after City approval of the proposed project. The building will include approximately 3,244 SF front-of house (public access after age and identity verification) and the rest will be back-of-house (employee only). OVERVIEW The Lemonnade retail store is classified as Mercantile Group M per the Building Code and will include both front-of-house areas and back-of-house areas. The front-of-house areas will include an entry check-in lobby and retail area. The back of house area will include the secured cannabis storage, service counter, hallway, employee area and restroom. The retail store will sell a variety of cannabis products, including flower, pre-rolls, vapor products, edibles, capsules, topicals, tinctures, concentrates and other accessories. The products will come pre-packaged from distributors; the retail store will not undertake any packaging in the store. The retail store will not include any operations related to cannabis growing, processing, or extraction. SAFETY PLAN The City of Fresno requires a Safety Plan for cannabis retail stores. This document is provided to address City requirements for a Safety Plan for the Lemonnade cannabis retail store at 1264 N Wishon Blvd. Safety Plan4 1261 Wishon OPCO, LLC • District 1 • • • 92 4.1: FIRE SAFETY ASSESSMENT The Fire Consultants, Inc. is a fire protection engineering and consulting firm with widespread experience conducting fire protection and life safety assessments, developing fire protection reports and code compliance assessments, as well as, designing fire alarm, sprinkler and special suppression systems and reviewing those designs by others. Mr. John Stauder, P.E. is a licensed professional engineer, holding both Mechanical Engineering (M 33333) and Fire Protection Engineering (FP 1668) licenses in California. CONSTRUCTION TYPE AND ALLOWABLE AREA The building housing the future retail store is an existing Group B building, built to support individual bank and the Lemonnade retail store will be located within existing 7,125 square foot building and occupy the whole building. Once the project is awarded, height and area requirements for new Lemonnade retail store should be confirmed based on the construction type of the existing building. USE AND OCCUPANCY Lemonnade will contain a display and sales floor, a check-in lobby, inventory and storage rooms, and supporting spaces associated with the retail store. The retail store will be classified as Mercantile Group M, as the retail store will be used for the display and sale of merchandise, and will include associated storage/stock of the goods incidental to the store per CBC Section 309.1, as well as assembly use spaces (with under 50 occupants) incidental to the store per CBC Section 303.1.2. Based on discussion with the operator, the Lemonnade retail store will not contain flammable or combustible liquids or other hazardous materials as listed by CBC Tables 307.1(1) or 307.1(2). Any potentially hazardous materials in the facility would consist of limited amounts (5 gallons or less) of cleaning supplies. The intended operation by these standards is not classified as a hazardous occupancy. HOUSEKEEPING Lemonnade management will maintain controls to prevent accumulation of combustible waste on the premises in accordance with CFC Section 304. All combustible waste material will be stored in approved containers or as acceptable to the Authority Having Jurisdiction until such waste can be removed from the premises. Trash containers with a capacity exceeding 40 gallons are required to be provided with lids and constructed of noncombustible materials, or of combustible materials with a peak heat release rate not exceeding 300 kW/m2 where tested in accordance with ASTM E1354 at an incident heat flux of 50 kW/m2 in the horizontal orientation. Dumpsters will need to comply with CFC Section 304.3.3. Outside the building, the space within 30 feet of the building or to the lot line is required to be maintained free of flammable vegetation or brush per CFC Section 304.1.2. SITE ACCESS The project will be a tenant improvement remodel within an existing tenant space within an existing building. As this is a renovation to an existing building with no change of use, re-evaluation of fire apparatus access roads, fire flow and fire hydrants based on Appendices B, C and D of CFC is not likely to be required. These requirements are always subject to review and approval of the Authority Having Jurisdiction. EMERGENCY CONTACT As per § 9-3309(g) in the Fresno ordinance, our CEO Kacey Auston will serve as both Lemonnade’s Community Relations Contact and its Emergency Contact. A phone number for the Emergency Contact will be provided upon license award. INHALATION ISSUES/THREATS The project will only include retail sales of cannabis products. The products will come pre-packaged from distributors; the retail store will not undertake any packaging in the store. The retail store will not include any operations related to cannabis growing, processing, or extraction and no cannabis will be permitted to be consumed on the premises. Therefore, there will be very limited to no inhalation issues or threats from the retail sales operation or Lemonnade business at this location. FIRE ALARM AND MONITORING SYSTEM Lemonnade retail store will be protected by a fire alarm system as required by Code and local ordinance. The existing building does not have a fire alarm system. A licensed C-10 fire alarm contractor will be retained to provide any required shop drawings and permit submittals for the fire alarm system. A licensed C-10 fire alarm contractor will also be utilized for the required inspection, testing and maintenance (IT&M) and monitoring of the fire alarm system. Fire Safety Assessment4.1 1261 Wishon OPCO, LLC • District 1 • • • 93 4.2: ACCIDENT AND INCIDENT REPORTING FORM The Lemonnade ownership and management is currently managing and operating 21 cannabis retail store locations both in California and other states. The ownership and management team have a combined 110+ years of experience in the regulated cannabis industry. As part of its current retail store portfolio, over 370 people are employed by Lemonnade ownership and management. As experienced cannabis retail store owners and operators, there are procedures and policies in place to document, record and track incidents and accidents. Lemonnade will use the above form to document, track and submit accidents and incidents to the proper authorities. A member of the store’s management team will interview the store employees and document the incident on the form and then forward the form on to the general manager. As a retail store, with no processing, extraction or manufacturing operations, the nature of any accidents or incidents is anticipated to be equivalent to any comparable retail establishment. Accident and Incident Procedures4.1 - 4.2 1261 Wishon OPCO, LLC • District 1 • • • 94 Figure 1- Egress travel path, common path of travel and exit separation for Lemonnade. 4.3: DESCRIBE EVACUATION ROUTES The proposed retail site building includes several evacuation routes as shown above; one through the main entry lobby and an emergency exit from the retail area for public access areas including retail area, lobby and restrooms and one through the employee only back of house space. The rear exit permits only employee access to an exit while maintaining security and separation between public and employee areas but may be used as an additional exit as permitted for intervening rooms by CBC Section 1016. The blue dimensional arrows above show the adequate exit separation, as required by Code. The occupant load for the uses of the spaces in the retail store is tabulated below per CBC Table 1004.5. Describe Evacuation Routes4.3 1261 Wishon OPCO, LLC • District 1 • • • 95 USE OF SPACE OCCUPANT LOAD FACTOR (sq ft/person)SPACE APPROX. AREA (sq ft) OCCUPANT LOAD (persons) 1ST FLR Unconcentrated Assembly 15 net Check-in Lobby 679 46 Employee Area 288 20 Mercantile 60 gross Retail Area 2565 43 Storage, Stock, Shipping Areas 300 gross Secured Storage 463 2 Electrical Room/Janitor 146 2 Service Counter 513 2 Business Areas 150 gross Hallway 45 1 Restroom 57 1 Intake 129 1 TOTAL 1ST 118 2ND FLR Business Areas 150 gross Office 206 2 Restrooms 288 2 Server 69 1 Storage 300 gross Storage 353 2 TOTAL 2ND 7 TOTAL 125 The retail store is separated into front-of-house areas and back-of- house areas. The retail store layout provides separate exiting from each area without passing through the other area. The occupant load for the public-accessed front-of-house area is 89 (including lobby and Sales area), and the occupant load for the back-of- house area is 36. The occupant load for the back of house area is less than 50 occupants, requiring one exit based on occupant load. The public area requires two (2) exits. One will be through the main lobby and the second exit will be from emergency exit in the retail area. The egress path of travel limitations (feet) for the occupancy within the retail store is provided below per CBC Chapter 10 for non-sprinkler protected buildings, as the existing building is not currently sprinkler protected. This is required to be measured along the natural path of travel. The travel distance requirements for both non-sprinklered and sprinkler protected buildings are shown in the table below. The occupant load for the uses of the spaces in the retail store is tabulated below per CBC Table 1004.5. Describe Evacuation Routes4.3 1261 Wishon OPCO, LLC • District 1 • • • 96 OCCUPANCY COMMON PATH OF TRAVEL EXIT ACCESS TRAVEL DEAD END LENGTH Group M (Non-Sprinklered)75 200 20 Group M (Sprinklered)75 250 50 Group B (Second Floor, Non-Sprinklered)75 200 20 Group B (Second Floor, Sprinklered)100 300 50 Where the occupant load will exceed 49, or where the common path limitation is exceeded, a minimum of two exits are required per CBC Table 1006.2.1. These exits are required to be separated by a minimum of one-third the area longest diagonal of the area served for sprinkler protected buildings or one-half the diagonal if not sprinkler protected. The overall retail store facility will contain three separate exits, to meet the required separation; one at the front entry, a second from the retail area and another at the rear, back-of-house area as shown in Figure 1. Lemonnade will install listed panic hardware on the exterior exit doors to meet CBC 1010.1.10 and UL 305. CBC 1010.1.9 requires all egress doors to be readily openable from the egress side at all times, requiring only one operation to open the door, without the use of a key or special knowledge or effort, except in specific situations. The Ordinance Article 33 of the Fresno City Code for Commercial Cannabis Business requires the retail area access door being locked at all times with “buzz-in” access through the electronic/mechanical door from lobby. This door shall be unlocked and readily openable from egress side (retail side), all times. The main door is allowed to be provided with a locking device on the egress side, provided the following requirements are met: a. a. The locking device is readily distinguishable as locked, and b. b. A readily visible durable sign is posted on the egress side of the door (inside) on or adjacent to the door, stating “THIS DOOR TO REMAIN UNLOCKED WHEN THIS SPACE IS OCCUPIED” in 1-inch black letters on a contrasting background. Certain egress doors in the retail store will be provided with card readers to control access into the retail store, back-of-house area, and cannabis goods storage and inventory rooms, as noted on the sketch in Figure 2. This is to meet Article 33 of the Fresno City Code for Commercial Cannabis Business. These doors will be arranged to meet the following provisions per CBC Section 1010.1.9.10 to allow for free egress: c. c. The door hardware that is affixed to the door leaf has an obvious method of operation that is readily operated under all lighting conditions. d. d. The door hardware is capable of being operated with one hand and does not require more than one operation for unlatching. e. e. Operation of the door hardware directly interrupts the power to the electric lock and unlocks the door immediately. f. f. Loss of power to the electric locking system automatically unlocks the door g. g. Operation of the panic hardware releases the lock. h. h. The locking system units are listed in accordance with UL 294. The exit path from the occupied spaces in the rooms or through corridors will need to be a minimum unobstructed width of 36 inches where serving less than 50 occupants; the width increases to 44 inches if serving 50 or more occupants per CBC Table 1020.2. The aisles are required to meet these widths, and the aisle accessways (if not required to be accessible) are required to be at least 30 inches wide per CBC Section 1018.3 and 1018.4. As discussed above, the retail store is separated into a front-of-house area and a back-of-house area, where each area has independent exiting. The public space requires two (2) exits and one exit is required from the back-of-house area. The exit path is allowed to pass through intervening rooms that are accessory to one another, provided that the required width is met, and a discernable path of egress travel is provided per CBC 1016.2. Exit signs are required for rooms where two exits are required, per CBC Section 1013. The facility will be provided with illuminated exit signs to facilitate egress. Emergency lighting will be provided for the means of egress in the facility to meet CBC Section 1008. The facility will be provided with emergency access and emergency evacuation plans to meet state and local fire standards. The facility will not employ any devices that emit any medium such as smoke or fog that could obscure the means of egress in the building as prohibited per CFC Section 316.5. Describe Evacuation Routes4.3 1261 Wishon OPCO, LLC • District 1 • • • 97 4.4: FIRE EXTINGUISHERS AND OTHER FIRE SUPPRESSION EQUIPMENT LOCATION SPRINKLERS The existing building does not include automatic sprinkler system. The retail store should consider providing an automatic sprinkler system, as this greatly enhances life safety, enables code compliance more easily and provides property protection and can reduce business interruption in case of a fire. FIRE ALARM Based on discussion with the Owner/operator, we understand that the existing retail store location is not provided with a fire alarm system. The fire alarm including initiation devices and occupant notification shall be provided as part of tenant improvement once the project is awarded to Lemonnade. The fire alarm system shop drawings, including initiation devices and occupant notification will be provided as part of tenant improvement. Typically, the fire alarm will consist of combination smoke / carbon monoxide / heat detection connected to a fire alarm control panel, and the initiation of such devices will automatically notify emergency responders and employees and public customers. The fire alarm system will need to be installed, inspected, tested, and maintained in accordance with NFPA 72, National Fire Alarm and Signaling Code and California Fire Code and Title 19. FIRE EXTINGUISHERS The retail store is anticipated to contain Class A fire hazards, which are ordinary combustibles such as paper and wood, and Class C fire hazards, which are electrical fires. The primary hazard in the facility is anticipated to be Class A fire hazards. The fire extinguishers in the facility are required to be rated at a minimum 2A:10B:C for the hazards in the building and spaced up to 75 feet travel distance per CBC Table 906.3(1). The fire extinguishers are required to be located in conspicuous locations per CFC Section 906, either mounted on brackets or inside fire extinguisher cabinets, where they will be readily accessible and immediately available for use, with the top no more than 5 feet above the floor. See Figure 2 for the proposed locations of fire extinguishers in the retail store. The fire extinguishers will need to be installed and maintained in accordance with CFC Section 906.2 and California Code of Regulations, Title 19, Division 1, Chapter 3. Exact fire extinguisher locations will be provided to meet 2019 California Building and Fire Code Section 906 as part of the tenant improvement permit submittal. The possible location of devices for fire alarm system and fire alarm control panel is provided in Figure 2. The location of manual pull station shall be confirmed with AHJ. Figure 2- Possible location of fire alarm devices including smoke detectors and CO detectors, fire alarm control panel and fire extinguishers. The fire alarm contractor shall provide the final drawings and verify it meets requirements of NFPA 72. CO detectors are required due to a gas water heater in property. No other hazardous gas will be utilized or stored in the property. Fire extinguishers and other fire suppression equipment4.4 1261 Wishon OPCO, LLC • District 1 • • • 98 4.5: PROCEDURE AND TRAINING FOR ALL FIRE AND MEDICAL EMEGENCIES Lemonnade will establish an employee training program to provide training to employees for response to common fire and medical emergencies. General safety procedures will be documented and reviewed with new hires as part of the formal hiring process and reviewed annually with all staff members. The local emergency contact phone numbers will be conspicuously displayed in the employee break room and at the reception desk in case of fire or medical emergency. Employees will be trained to evacuate the building upon any fire alarm signal and at least two employees will be trained to assist public customers with evacuation during a fire emergency. Employees will also be trained to assist if a customer requires medical assistance within the store. During emergency situations when an employee requires medical treatment for an occupational injury or illness, the local emergency ambulance shall be used to provide transportation for that employee unless other arrangements have been made. In all other cases of an employee injury or illness, a representative of Lemonnade will transport personnel to clinics and medical facilities. FIRST AID LOG Any work-related injury or illness that is reported to a first-aid facility or medical facility must be recorded on a First-Aid Log form. This includes non-occupational cases and injuries or illnesses treated that involve vendors, suppliers, Contractors/Subcontractors, client personnel, and any other third party. First-Aid Logs or any portion of a log are not for general distribution. Requests for such information shall be processed by the human resource manager/supervisor. FIRST AID KITS First aid supplies shall be easily accessible when required. First-aid kits and required contents are maintained in a serviceable condition. The commercial or cabinet-type kits will be provided and do not require all items to be individually wrapped and sealed, but only those which must be kept sterile. Items such as scissors, tweezers, tubes of ointments with caps, or rolls of adhesive tape, need not be individually wrapped, sealed, or disposed of after a single use or application. A roster, denoting the telephone numbers and addresses of doctors, hospitals and ambulance services available to the Lemonnade retail store, shall be posted at or near each first-aid station. SAFETY RULES FOR ALL EMPLOYEES It is the policy of Lemonnade that everything possible will be done to protect employees from accidents, injuries and/or occupational disease while on the job. Safety is a cooperative undertaking requiring an ever-present safety consciousness on the part of every employee. If an employee is injured, positive action must be taken promptly to see that the employee receives adequate treatment. No one likes to see a fellow employee injured by an accident. Therefore, all operations must be planned to prevent accidents. Safety policies will be reviewed with each new hire and annually with all employees. Management will review the safety rules and policy with all employees. To carry out this policy, the following rules will apply: 1. 1. All employees shall follow the safe practices and rules contained in this manual and such other rules and practices communicated on the job. All employees shall report all unsafe conditions or practices to the proper authority, including the human resources manager/supervisor. 2. 2. The human resources supervisor/manager shall be responsible for implementing these policies by insisting that employees observe and obey all rules and regulations necessary to maintain a safe workplace and safe work habits and practices. 3. 3. Good housekeeping must be practiced at all times in the work area. Clean up all waste and eliminate any dangers in the work area. 4. 4. Suitable clothing and footwear must be worn at all times, shoes with thin or torn soles are not permitted. 5. 5. All employees will participate in safety meetings conducted by their supervisor on a regular basis to continuously provide a safe workplace for all. This is an essential part of Lemonnade’s program for protecting our employees from accidents and illness. 6. 6. Anyone under the influence of intoxicating liquor or drugs, including prescription drugs which might impair motor skills and judgment, shall not be allowed on the job. 7. 7. Horseplay, scuffling, and other acts which tend to have an adverse influence on safety or well-being of other employees are prohibited. 8. 8. Work shall be well planned and supervised to avoid injuries in the handling of heavy materials and while using equipment. 9. 9. No one shall be permitted to work while the employee’s ability or alertness is so impaired by fatigue, illness, or other causes that it might expose the employee or others to injury. 10. 10. There will be no consumption of alcohol or cannabis on the job. 11. 11. All injuries should be reported to the Supervisor, or 911 so that arrangements can be made for medical or first aid treatment. 12. 12. When lifting heavy objects, use the large muscles of the leg instead of the smaller muscles of the back. 13. 13. Do not throw things, especially material and equipment. Dispose of all waste properly and carefully. Procedure and Training for all Fire and Medical Emergencies4.5 1261 Wishon OPCO, LLC • District 1 • • • 99 The medical, fire and civil unrest documents are also provided to inform employees how to manage these situations, should they arise. These forms will be posted in the employee break area with appropriate City of Fresno Fire and Emergency information and reviewed as part of the new hire training and orientation. Procedure and Training for all Fire and Medical Emergencies4.5 1261 Wishon OPCO, LLC • District 1 • • • 100 Procedure and Training for all Fire and Medical Emergencies4.5 Create an evacuation plan. Practice this plan with all employees at least once a year. Prepare for a possible lock-down if it is not safe for employees to leave. Always have an up-to-date list of employees, so you can determine who needs access to the building and who does not. Involve local law enforcement officials in your planning and drills. Ensure combustible items (gasoline, paint, oils and flammable liquids) are stored properly. Remove external customer trash bins from the outside the building, as they can be used as weapons. Secure the trash corrals. Make use of panic alarm systems (if equipped), as needed; ensure they are working. Make sure a first-aid kit is in order and accessible to everyone. Prepare an Emergency Bag/Kit that includes water and non-perishable food supplies. Purchase large enough TL-Rated safes to store your most valuable assets. Video record all the assets for insurance purposes and store video offsite. Make sure all recording devices and video surveillance cameras are operational. Consider asking employees to park off-site and shuttle them to the building. From the shuttle, have security personnel (if available) escort them into the building. Communicate with your staff which roads and areas will be targeted and affected by the event. Remove, repair, or replace any loose items on or around the building such as trash receptacles, rocks, blocks, cracked windows, etc. Back up any important digital data to a digital cloud system or store offsite. Consider depositing money often at your bank and ensure all money in the safe is secured. Stay inside if the event becomes dangerous. Actively monitor the news and social media for information on the event. Keep all staff and customers up-to-date on event details that may impact their safety. Upon receipt of instructions from authorities or supervisors to close, and assuming it is safe to do so, follow normal closing procedures. All criminal activity should be reported to the police immediately. Leave the majority of the lights on at closing. Keep cash register drawers in the open position without any money in them. Ensure all doors and windows are secured and locked. Check if outdoor access to the roof is secured. Secure all of the businesses equipment inside the building. Keep trash bins completely emptied to avoid fire. Close and lock all trash coral dumpsters. Double-check your video and intrusion alarm systems to ensure they are on and operating. MOST IMPORTANT: Fill your TL-rated safe with as many valuables as possible. Prepare Ahead of Time Before a Planned Event Prepare Your Business for a Civil Unrest During an Event Before Closing Email us: contact@sapphirerisk.com Let's Talk: 214.845.6838 Learn More: Sapphirerisk.com We're Here to Help. 1261 Wishon OPCO, LLC • District 1 • • • 101 CONCLUSION This report presents the safety plan for the proposed retail store under consideration by 1261 Wishon OPCO, LLC in Fresno, CA. If a protection approach as described in these sections is employed and the facility, inventory, and arrangement is as described herein, our opinion is that the design will meet the applicable requirements and provide adequate protection in accordance with the CBC, CFC, and City of Fresno amendments. We recommend that the information in this report be discussed with the City Manager’s Office and the various Authorities Having Jurisdiction to confirm the approach. Procedure and Training for all Fire and Medical Emergencies4.5 1261 Wishon OPCO, LLC • District 1 • • • 102 Security Plan5 1261 Wishon OPCO, LLC • District 1 • • • 103 Security Plan5 1261 Wishon OPCO, LLC • District 1 • • • 104 6.1: DESCRIPTION OF PROPOSED LOCATION The planned location of Cookies’ retail storefront is at the intersection of North Wishon Avenue and East Fern Avenue, at the center of Fresno’s popular Tower District neighborhood,, surrounded by several neighborhood-serving businesses, including a bakery, a barber shop, a post office, a dollar store, a market, renowned live theater venues, and various shops and restaurants. The facility is conveniently located right off Highway 180 (the “Sequoia-Kings Canyon Freeway”). Being near high-traffic roads, commerce, and commercial neighborhoods, our location is an exceptional site for ensuring our business will be easily accessible to Fresno residents and to traffic on the Sequoia-Kings Canyon Freeway. Our retail location will help cultivate a natural synergy with surrounding businesses. The proposed location is surrounded by establishments frequented by neighborhood residents and visitors, providing them a one-stop-shopping experience. Customers will be encouraged to visit local markets and restaurants for their shopping needs, and our employees will provide recommendations to local breweries (Sequoia Brewing Company), coffee shops (Hi-Top Coffee), and the renowned and iconic Tower Theatre for the Performing Arts to inquiring patrons. Similarly, those initially drawn to these other businesses—thanks to the area’s commercial nature and to the facility’s proposed location next to busy roads and highways—will easily be able to locate our space. Furthermore, the Tower district caters to adult-oriented businesses such as pubs, dance clubs, and bars, making this a suitable location for our business. Our location is also in compliance with Fresno’s location requirements as outlined in Sections 9-3307 and 9-3329. Our location at North Wishon Avenue and East Fern Avenue is zoned CMS and meets the zone’s development requirements. There is no school, day care center or youth center within 800 feet. . Our building will be fully enclosed with opaque windows and doors, and no cannabis products visible from outside the premise. Our facility will be constructed to eliminate the detection of cannabis odors off-site. We will also be completely compatible with character of the neighborhood and the existing buildings, ensuring that signage is limited to business identification purposes. In addition, we will produce a signed and notarized statement, prepared by the City Attorney, demonstrating our legal right to occupy our location as a cannabis business. With a futuristic look, and consistent with the design guidelines of the Tower District, Lemonnade provides customers with an immersive shopping experience unlike anything else that represents Lemonnade’s place as the trend setter in the cannabis industry. Our layout encourages customers to interact with products and people in a new and enlightening way. We have abandoned the concept of tv monitor menus for community connection which reflects the evolution in the cannabis industry where consumers want to know more about the products they are using. Round flower tables spark conversations between customers and our budtenders. We try to go bigger and better with each new concept and Fresno will be no exception. Lemonnade’s association with Cookies and its numerous locations throughout California and the United States allows it to foresee changes in the cannabis customer base and allows it to create a fresh experience and design that appeals to the changing demographic. Location6 1261 Wishon OPCO, LLC • District 1 • • • 124 BUILDING EXTERIOR Cookies’ Lemonnade retail storefront will be located at 1264 N. Wishon Avenue, in a historic building that was once home to the Bank of America Tower District Branch. Built in 1958, the structure was designed to be a bank, and the building remains compliant with federal safety standards. The bank branch eventually closed in late 2017. Since then it has remained vacant and has been a gathering place for loitering. We are now excited and honored to revitalize the building by giving it commercial purpose once again, and to improve the quality of the Tower District by providing both lighting and security to the area. We will not be making any structural changes to our building – we will maintain its original mid-century feel - but we will significantly enhance our exterior aesthetics to convey warmth and our unique personality.. One of our walls protrudes upward above our roof, which allows us to be seen from a busier intersection further down on Wishon. Customers will also be able to identify our store by its yellow-to-orange gradient paint and black trim, as well as Lemonnade’s recognizable name identifier on our building exterior. Our 1264 N. Wishon location is a 7,125 square foot standalone commercial building on a 12,780 square foot lot. There is an abundance of parking on-site on the north side of the property, which includes 36 spaces, ADA-compliant parking, and a van loading area with a sidewalk ramp directly next to our storefront to provide convenient patient access. Our parking lot is advantageous with two points of ingress and egress, making it safer and more convenient for our visitors. The many shops and restaurants nearby in the Tower District will help with the success of our retail store by generating exposure and creating opportunities for us to attract new customers while our dedicated customer base will create more foot traffic for our neighboring businesses . SECURITY FEATURES OF BUILDING EXTERIOR The Lemonnade storefront exterior design artfully incorporates its many security features. The glass on the front and sides of our building will be Armorcentric multi-layered, bullet and impact resistant with anti-graffiti coating. Our high-definition surveillance cameras will be strategically placed on all exterior areas of the building to maximize visibility and deter potential criminal activity. Furthermore, our parking lot and building exterior will be well-lit without causing a nuisance to our neighbors. FLOOR PLAN DESIGN The floor plan of the Lemonnade storefront was designed by award-winning architectural firm, RDC, which has over 40 years of experience designing individual retail storefronts and large-scale shopping centers. RDC has designed award winning landmark facilities throughout California that mesh with surrounding areas and enhance the local community. Our design is based on Lemonnade’s renowned locations currently in operation, taking into account the unique aspects of our community and building, to maximize security, and provide an exceptional customer experience. ROOF PLAN Building Exterior6.1 1261 Wishon OPCO, LLC • District 1 • • • 125 Photographs of Premises6.2 1261 Wishon OPCO, LLC • District 1 • • • 126 WAITING ROOM ENTRANCE Cookies’ Lemonnade storefronts are intended to capture the essence of a Sativa cannabis strain’s flavor and vibrancy, creating stores that are memorable, uplifting, and encourage customer curiosity and education.. The front door of a Lemonnade facility will bring customers into our bright and cheery waiting room with recessed lighting, polished concrete floors, and reflective galvanized metal accents, all surrounded by frosted windows with black trim that let in light but prevent our interior from being seen by the outside world. All persons entering the store will have to check in at our check-in desk within our waiting room, presenting valid proof of age and medical patient eligibility ( if applicable) before they will be granted entry into our retail showroom, as detailed in Security Plan Processes. After customers check-in, they are invited to sit on the multi-colored couches while they await clearance to enter the retail sales room. The double layer of entry through the front door and waiting room provides maximum security between our front entrance and the retail sales floor. Our reception desk is also oriented to avoid bottlenecks of staff and guests, providing for discretion but also making it friendly and approachable. All customers will leave through the same doors they entered when they exit the retail sales floor and the waiting room complying with the single entrance/exit provision in Section 9-3310. SITE PLAN INTERIOR RENDERING Site Plan6.3 1261 Wishon OPCO, LLC • District 1 • • • 127 BACK ENTRANCE Our employee-only rear entrance leads directly into our limited-access back of house, and upon entry, employees will step into our intake area. Within the intake area is a door that leads to our retail area, as well as to the limited-access area behind our service counter. Located behind our service counter is a Class I vault door, which acts as the access point to our secured storage room and will enable employee entry from the limited-access area behind our retail service counter. Our storage room will contain no windows and will be kept dark, dry, pest-free, and well-ventilated. Our intake room will be located adjacent to our storage room to facilitate unloading and processing of incoming shipments of cannabis and cannabis products. Upstairs we have our management office, server room, secondary storage, employee break area, and employee restrooms. The management office and secondary storage will provide a secure area to store records and a quiet private area for managers to conduct meetings. Staff comfort is also a critical part of our company culture. We have included in our staff break area a kitchen, tables, and lockers to ensure employees have a comfortable and designated area to take breaks. RETAIL SALES ROOM The retail area is specifically designed to promote an educational, efficient, and enjoyable customer journey from start to finish. Visually, our customers will enjoy a tasteful combination of Lemonnade’s yellow and orange accent paints and glass, textured metal, and glossy black surfaces against crisp white walls. Our lighting will also optimize the customer experience through our signature frosted glass windows, perimeter track lights, and custom 10-foot LED light fixture suspended at the sales room center. Upon entry from the reception area, customers will immediately notice our “huddle table” and chairs on the retail floor, which is a circular table that allows for visitors to have direct and relaxed conversations with our staff to discuss their needs and learn about the products we carry. The area is modern and bright, but fosters a sense of warmth and familiarity. Our retail space is designed to impress and inform with a hard-working perimeter that conveniently displays our extensive product selection while also providing helpful education. Because of our smart design, navigation is intuitive, regardless of the customer’s level of experience, but our sales associates will be ready with an iPad to assist guests upon entry. The lemon-shaped flower tables on the retail floor display our proprietary sealed and tethered twist-to-smell flower jars, allowing customers to both see and smell our cannabis flower without it being directly handled or being able to be carried away. Depending on customer needs and desires, they will either be drawn to our flower table in the center of the room, or to the many products on display around the perimeter of the sales room. Customers can decide if they want to sit down with one of our sales associates to learn more about a product or to wander around the floor to see what products are offered under the supervision of our staff. Our flexible perimeter system allows us to quickly respond to changes in product type and stock density. INTERIOR RENDERING Interior6.3 1261 Wishon OPCO, LLC • District 1 • • • 128 There are seven point of sale locations for customers to check-out and receive their products before they exit. During operating hours, a limited supply of product inventory is kept on shelving in the limited-access-area behind the counter to allow sales associates to easily access the requested product for the customers upon check-out. Finally, our guests have an opportunity to discover distinctive artwork that celebrates the strains, products and people who have made Lemonnade the global lifestyle brand it is today. Our staff provides one-on-one supportive shopping and enters customer purchases into the iPad. When the guest is ready, they can pay for cannabis goods at one of the point of sale stations at the service counter. Our service counter is a long cash desk with an ADA drop that will be the focal point of our shop – the graded colored glass that wraps our cash desk makes it stand out and draws our customers’ attentions. SECURITY FEATURES OF INTERIOR Lemonnade designs its retail areas to maximize security,based on our wealth of experience at numerous locations. This experience has enabled us to design a safe and practical retail experience for all of our customers. The first security feature is our reception area, which precedes our retail area. Access to our retail area will only be granted to customers by our receptionist after verifying their age and identity. The entrance to the retail sales room will be locked at all time times with entry strictly controlled by an electronical “buzz-in”” entry system compliant with Section 9-3310(a)(4). With the exception of designated product inspection containers, Lemonnade does not keep live cannabis goods on the open sales floor to limit the risk of theft and product diversion. All cannabis goods on display on the open floor are just packaging. All live cannabis goods are kept on shelving behind the point of sales counter or in Lemonnade’s secured storage room. The shelving behind the counter is in a limited-access-area only accessible to employees and will only store limited supply of product. The inventory storage room is only accessible with a key card through a door in limited-access area behind our service counter, or through our intake area. The walls and ceilings of the secured storage vault rooms are reinforced with steel to prevent entry by force. INVENTORY STORAGE ROOM To honor the focus and dedication to cultivating the best cannabis strains available, Lemonnade’s main inventory cannabis goods are stored in a hardworking ‘clean room’. Our inventory storage room features slick, Barrisol lighting and central rolling storage racks and is where Lemonnade employees fulfill customer orders, and access to the ‘clean room’ is limited to specific employees. Key cards are used to grant access and prohibit unauthorized access. INTERIOR RENDERING Security and Storage6.3 1261 Wishon OPCO, LLC • District 1 • • • 129 7.0: COMMUNITY BENEFITS AND INVESTMENTS PLAN Cookies submits the following Community Benefits and Investments Plan to respond to the needs of the Fresno community. What sets Cookies apart is our authentic commitment to community investment. Our authenticity is baked into our organizational structure, along with social responsibility, individual empowerment, and upward mobility; concepts at the core of our operation. We imbue these ideas with a communal spirit that prioritizes investments in the environment, local organizations, and the residents of both the City of Fresno and Fresno County. Community connection is another of Cookies’ core values. Cookies was founded in San Francisco by lifelong residents who wanted community representation in the cannabis industry. They wanted a business that combined cannabis culture with the social fabric of the city. We know from experience that society is better when businesses are founded on the principles of community empowerment and integration, instead of pure profit. Now operating in 21 cities, 12 of which are in California, Cookies knows each community is unique and has its own concerns, priorities, and needs. We have spent the last year engaging with the Fresno community in support of this plan. When we began, we saw many opportunities to help the city’s most vulnerable populations. As the Covid-19 pandemic unfolded, we saw the need for community assistance skyrocket. Thus, we dedicated much of our support to Covid-19 relief. Our community benefits plan is designed to be impactful based on real community needs. If awarded a license, we believe that we will be more than a cannabis business. We will be an economic driver and provide support to those in the community who need it most. 1,000 KN-95 MASKS DONATED to low income residents 10 ORGANIZATIONS received donations 0.5% of gross receipts DONATION TO CITY OF FRESNO COMMUNITY REINVESTMENT FUND 1.5% of gross receipts to community benefits INVESTMENTS in the COMMUNITY to community nonprofits and civic organizations AT FRESNO businesses to date COMPREHENSIVE ENVIRONMENTAL PROGRAM YOUTH EDUCATION PROGRAM developed by Stanford Medicine 6 MEMBERSHIPS in civic organizations 6 RESIDENTS ON ADVISORY BOARD Community Benefits and Investments Plan7 1261 Wishon OPCO, LLC • District 1 • • • 133 7.1: SOCIAL RESPONSIBILITY PLAN Cookies will dedicate 1.5% of gross receipts to Fresno community benefits and investments in the community. We estimate that this will result in an annual payment of at least As detailed below, we have supported local organizations and nonprofits that intend to work with in the future. Our financial contributions will assist with operations, establish a working relationship, and engender goodwill among the public. Cookies has already donated over to local organizations as a part of our pre-application community outreach, education, and volunteer efforts. Copies of checks and acknowledgments from the relevant organizations are attached as Appendix A. As a company whose mission is to be authentically socially responsible, partnering with established Fresno organizations and nonprofits is our way of demonstrating that when we say we care about community, we mean it. COMMUNITY BENEFITS AND INVESTMENTS ADVISORY BOARD AND NEEDS ASSESSMENT Cookies takes pride in providing excellence in all we do, including our community benefit work. To that end, we have assembled a Fresno Community Benefits and Investments Advisory Board (the “Advisory Board”) to counsel us on how we should disburse our 1.5% community benefits and investments in the community. We want to be as responsive as possible to the Fresno community’s needs and through the Advisory Board, we will consult closely with the communities we serve and with local leaders to determine the needs of the community. The Advisory Board is comprised of individuals who represent Fresno’s diversity in all aspects: race, ethnicity, gender, age, and economic status. Owner Kacey Austin will serve as Chair of the Advisory Board. She has a long history of volunteering for similar positions in Fresno. Her volunteer experience includes: (i) Fresno/Madera County United Way – Past Board Member; (ii) Dailey Charter School – Past Board Member; (iii) Mollie Tibbetts Memorial Foundation – Founding Member; (iv) San Joaquin River Conservancy - Board Member; (v) Fresno/Madera Exceptional Parents Unlimited – Outreach Committee Member; (vi) Fresno County Commission on the Status of Women – Chair Commissioner; (vii) San Joaquin Valley Air Pollution Control District – Citizens Advisory Committee Member; and (viii) Fresno Metropolitan Flood Control – Vice Chair (although she will be Chair in January, 2021.) Kacey looks forward to incorporating impactful opportunities for Cookies to volunteer in Fresno. OUR ADVISORY BOARD IS COMPRISED OF THE FOLLOWING FRESNO CITIZENS: (1) Jackie Ryle, PhD Dr. Ryle owns a professional services business in Fresno. She has 30 years’ experience as an executive manager, professional trainer/con-sultant, and college instructor. Her clients in-clude a broad range of nonprofit charitable or-ganizations and she has served over 50 public and nonprofit agencies in the last 10 years. Dr. Ryle hosted a weekly television interview program on community affairs for 22 consecutive years, and currently serves on the advisory board for the Jan and Bud Richter Center for Civic Engagement and Service-Learning at Fresno State University, and the Shinzen Garden Advisory Committee. She served as charter president of the Central California affiliate of the Dispute Resolution Association and the Central California Division of the City Clerks Association of California and is a graduate of the inaugural class of the San Joaquin Valley Civic Leadership Program, and Class 1 of Leadership Fresno. (2) Laneesha Senegal Laneesha is the founder and executive director for HOPE – Helping Others Pursue Excellence. Laneesha helped launch HOPE Builds, a youth woodshop apprentice and entrepreneurship program. In partnership with the Fresno Housing Authority, the program has expanded to Fresno, Orange Cove, and Reedley. As a “40 Under 40” awardee and a 2009 HandsOn Central Valley Volunteer of the Year, Laneesha dedicates herself to a life of service. Her distinguished leadership serving the Fresno community earned her the recognition by the Marjaree Mason Center as a 2018 Top 10 Businesswomen of the Year. Laneesha’s passion has fueled her to launch an entrepre-neurship hub called Vision View Business Formation Center. Vision View’s mission is to improve the upward economic mobility for families with limited income. Laneesha has served in an advi-sory capacity on a number of local initiatives. (3) Darius Assemi Darius is president and CEO of Granville Homes, a real estate development company established in 1977. Over the past 40 years, Granville has built more than 6,000 single-family residences in the Fresno metropolitan area and has been involved in the acquisition, financing, and de-velopment of over 100 projects. In addition, Darius has led the effort for downtown revitalization, building more than 400 multi-family residential units and redeveloping over 35,000 square feet of commercial real estate. Darius is involved in many nonprofit organizations in Fresno and throughout the world. In 2006, the company initiated the annual Granville Home of Hope fundraiser, which has raised over $5.2 million, providing funds to many local nonprofit organizations. In addition, Darius serves on the boards of several nonprofits, including the Alliance for Medical Outreach and Relief (AMOR) and Breaking the Chains. Social Responsibility Plan7.1 1261 Wishon OPCO, LLC • District 1 • • • 134 4) Brad Stevens Brad is retired from the Fresno Police Department. He has over 20 years of experience in development, fundraising, public relations, corporate relationships, and special events. Working for 35 years as a Fresno police officer, Brad has also served as the law enforcement coordinator for the nonprofit program Valley Crime Stoppers. Following his law enforcement service, Brad served as the direc-tor of development for the Marjaree Mason Center before joining Habitat for Humanity Greater Fresno Area’s development team. Brad continues to serve on several boards and committees in the Fresno community. (5) Kaya Herron Kaya is the director of community engagement and advocacy for the Fresno Metro Black Chamber of Commerce. Kaya works directly with the community, representing the chamber in collaboratives and partnerships, guiding pol-icy and advocacy positions, and providing tech-nical assistance to small businesses and leaders. She also serves as a co-chair of the Fresno County Complete Count Committee for the 2020 Census and is working to ensure a complete and accu-rate count of Fresno County. She is a leader in the community and was recently awarded the business professional “Top 40 under 40” award by Business Street Online in Fresno County for her strong work ethic and commitment to her community. (6) Daniel Renteria Daniel is a retired investigator, the wine stew-ard at Lucy’s Lounge, and serves on the Tower District Marketing Committee (TDMC). TDMC is a nonprofit organization designed to promote and develop commerce, community, and the cultural environment by enhancing the eco-nomic, civic, and human vitality in the Tower District of Fresno. It strives to meet this commitment through special events and planned economic development. Through positive leadership, advocacy, and action, TDMC and its members support and pro-mote a sound and expanding business environment in the city of Fresno. SOCIAL RESPONSIBILITY PHILOSOPHY AND COMMUNITY NEEDS Cookies’ social responsibility plan is focused on reaching vulner-able populations in Fresno—underserved youth, homeless, human trafficking victims, seniors, and the economically disadvantaged. Despite being in the wealthiest state in the country, tremendous need exists for economic support in Fresno. The San Joaquin Valley is one of the least affluent areas of California. Per capita income is well below the national average, and poverty, in both urban and rural areas, is a significant prob-lem. Valley residents have among the lowest per capita personal incomes, higher rates of unemployment, and more residents living below the Federal Poverty Level than the average for California as a whole. According to the American Community Survey, 21.3% of individuals in the city were living in poverty, significantly higher than the state average of 11.8%. Racial disparities are also present: 13% of white people in Fresno County are living in poverty, compared to 40% of black people and 35 percent of Latinos. As a result of the economic conditions, Fresno has a large population of persons experiencing housing and eco-nomic insecurity. Whether through making donations to local organizations or providing volunteers, Cookies is dedicated to meeting the needs of these vulnerable populations through our community benefits and investments in the community. DIRECT AID TO NON-PROFITS Cookies is strongly committed to supporting the communities where its employees live and work. To date, we have DONATED to Fresno organizations. Based on input from our Advisory Board and through engagement in the community, we have selected the following organizations to donate to because of their strong ties to Fresno and because of their dedication to helping vulnerable populations. Over the last year, Cookies met with over 25 local non-profits, four business associations, neighboring businesses and residents to assess community needs. The following nonprofits are our partners in serving the community’s most pressing needs. We have agreed to support these nonprofits in the future if we are awarded a license. In addition, if conditions in the community change, we can direct our aid to other non-profits in the community. Partner Organization: United Way Fresno and Madera Counties Community Issue: Covid-19 Cookies CONTRIBUTED AN INI- TIAL to the United Way Fresno and Madera Counties (“UWFM”). We selected UWFM because we wanted to help the Fresno community and owner Kacey Auston identified UWFM as having the infrastructure in place to make an impact. Like UWFM, we believe in the power of community to help others and UWFM brings re- sources together to address the most urgent issues in the community, Our contribution will help improve lives of Fresnans by mobilizing the caring power of communities to make long-lasting change in community conditions. UWFM’s community partners often include schools, policy makers, businesses, financial institutions, neighborhood associa- tions, community development corporations, and volunteer organizations. By assisting UWFM, we hope to help Fresnans meet the new challenges arising from the Covid-19 pandemic. Social Responsibility Plan7.1 1261 Wishon OPCO, LLC • District 1 • • • 135 Partner Organization: Poverello House Community Issue: Homelessness & Poverty Fresno faces major challenges with homelessness, housing in- security, and poverty. To help the community tackle these chal- lenges, Cookies DONATED AN INITIAL to Poverello House. Poverello House is a private, nonprofit, nondenominational organi- zation that has been serving the hungry, homeless, and destitute of Fresno since 1973. Our contribution will help Poverello House pro- vide three meals a day, 365 days a year to anyone in need, no ques- tions asked. With so many families impacted by Covid-19, we are proud to support an organization that Fresno residents need more than ever before. Partner Organization: Barrios Unidos Community Issue: Gang Activity Cookies has made an initial DONATION OF to Barrios Unidos. Gangs, gang violence, and gang activity is one of the most prominent problems facing the Fresno community. Fresno Barrios Unidos emerged out of a com- munity response to recognize the leadership of young people im- pacted by gangs in developing more positive solutions for their lives and the community. Our donation will allow Barrios Unidos to provide youth programming on education, wellness, outreach and engagement, training, capacity building, healing and treatment, and leadership and power building. We are committed to support- ing this organization that promotes youth empowerment to combat gang activity. Partner Organization: Breaking the Chains Community Issue: Human Trafficking Cookies CONTRIBUTED AN INITIAL to Breaking the Chains. We donated towards general op- erations to its Thanksgiving Fundraiser. Our donation was used to purchase food that was distributed to families in Fresno. It is an unfortunate fact that Fresno is regarded as a major hub for human trafficking. We are proud to join the city in its efforts to help rescue trafficking victims and end illegal activities. Breaking the Chains is a local nonprofit dedicated to helping juvenile and adult survivors of human trafficking. Our donation will provide funding for food, shelter, education, readiness and preparation, job placement, comprehensive case management, addiction counsel- ing, and numerous forms of therapy. Human trafficking is a deplor- able crime and deprives its victims of their lives and dignity. We support Breaking the Chains and its efforts to provide necessary support and reparative services to victims of human trafficking. Partner Organization: Fresno EOC Sanctuary Youth Shelter/ Fresno EOC Street Saints Community Issue: Underserved Youth /Social Justice Cookies DONATED to Fresno EOC. As explained in section 7.1.1, we donated to the Street Saints program for expungement. We also donated to reopen the Sanctuary Youth Shelter, which had previously closed due to Covid- 19. Since 1992, Sanctuary Youth Shelter has been the area’s recog- nized safe place for runaway, homeless, exploited, or displaced youth. The shelter is located in a central area of Fresno, accessible 24 hours a day, 7 days a week. Our donation will be used for meeting the immediate needs of youth such as shelter, clothing, meals, counseling, and referrals to additional managed care. We under- stand the conditions that struggling adolescents face and the pos- itive impact that Sanctuary Youth Shelter provides. We hope Sanctuary Youth Shelter will continue to do good work in the community. Partner Organization: NAACP Community Issue: Racial Inequity Cookies is the largest minority-owned cannabis business in the United States. After seeing peace- ful protests organized by the NAACP in Fresno, Cookies CONTRIBUTED AN INITIAL the Fresno chapter of the National Association for the Advancement of Colored People (“NAACP”) to help achieve racial justice. We share the NAACP’s goal of empowering minorities and eliminating race-based discrimination. We will support the NAACP in its efforts to address the major areas of inequality facing blacks, including education, health, public safety and criminal justice, vot- ing rights and political representation, and expanding youth and young adult engagement. We understand that it is not enough to make public declarations against systematic racism, so we will continue to support causes that promote equity in Fresno. IN KIND CONTRIBUTIONS Cookies is committed to helping the community in its time of need and 2020 has provided no shortage of opportunities for us to step up. Cookies donated worth of hotel rooms to the American Red Cross of Central California to aid individuals impacted by the Creek Fire. To prevent the spread of the coronavirus, the American Red Cross provided housing to 1,200 people in hotels instead of in a traditional shelter. Our donation provided shelter and three meals per day to those who were displaced. We appreciate and support the tireless work of the Red Cross and firefighters who keep Fresno safe when danger arises In addition, Covid-19 has transformed the way people live and Fresno is no Social Responsibility Plan7.1 1261 Wishon OPCO, LLC • District 1 • • • 136 exception. On June 1, 2020, Cookies donated 1,000 KN-95 masks to the city of Fresno. The masks were distributed to 1,000 seniors in need in the southwest Fresno community. We are proud to support the city’s efforts to protect the most vulnerable in the community from Covid-19. ECONOMIC INCENTIVES TO CITY OF FRESNO Cookies anticipates that Fresno will incur additional expenses and impacts on the City’s roads and other infrastructure systems, law enforcement, fire protection, inspectional services, and permitting services, as well as unforeseen impacts on the city. In order to mitigate the financial impact on Fresno and the use of Fresno’s resources, we agree to provide voluntary economic incentives as set forth below. Cookies is committed to providing per year in voluntary economic incentives to the City of Fresno each year. The initial annual payment will be due twelve months after the issuance of the commercial cannabis license. Each subsequent annual payment will be due on the anniversary date of the initial payment. The city of Fresno may use the above economic incentives in its sole discretion, as determined by the Fresno City Council. It may be used to fund city services or city programs. We will work with the City Attorney to determine the proper vehicle for making this voluntary financial incentive. PARTICIPATION IN CIVIC GROUPS AND ECONOMIC INCENTIVES Cookies is strongly committed to supporting the Fresno-area business community. The economic impact of local spending reverberates in a community like Fresno. To date, we have in the Fresno community on goods, services, and real estate. Finding professional service providers that work with cannabis businesses can be challenging, thankfully in Fresno we found high quality businesses to partner with and look forward to deepening our ties to Fresno’s local businesses. As a national organization, Cookies has both the opportunity and responsibility to empower our partners. In fact, we have been so impressed by the work of a local woman-owned business that we have retained their services for multiple projects across the country As a locally owned and operated business, Cookies is excited to join the local business community. Owner Kacey Auston has a long history of participation in Fresno Civic groups and she looks forward to introducing Cookies to the community. We appreciate that local businesses are the backbone of the Fresno community and the local economy. Cookies will benefit the business community through its participation in civic groups, commitment to hire locally, and preference for local contractors. Fresno Chamber of Commerce To participate in the local business community, Cookies has joined the Fresno Chamber of Commerce. Our support of the Chamber goes beyond financial support. We intend to partner with the Chamber for its 2021 Leadership Fresno program and its 2021 job fairs. We appreciate the Chamber’s role as a driver of economic development and op- portunity in the city. Leadership Fresno is a leadership develop- ment program that provides a behind-the-scenes view of the is- sues that affect the region’s economic prosperity and quality of life, while developing and refining individual skills to better serve in leadership roles within the City of Fresno. We will commit finan- cial support for the program via scholarships for individuals that might otherwise be unable to afford tuition. We will also commit to ensuring employee participation in this excellent leadership train- ing opportunity. Fresno Metro Black Chamber of Commerce Cookies has joined Fresno Metro Black Chamber of Commerce, which empowers black-owned busi- nesses through advocacy, technical assistance, and capacity-building services and provides edu- cational programming for entrepreneurs to pro- mote financial responsibility, sustainability, and job growth. Cookies has a strong history of supporting Black businesses: we opened the first Black-owned dispensary in San Francisco, and have a robust social equity program aimed at providing support to applicants. To support Black-owned businesses in Fresno, we have conducted initial outreach with the Fresno Metro Black Chamber to find opportunities to work with Black-owned Fresno businesses. We will continue to work with the Fresno Metro Black Chamber of Commerce to identify Black businesses to hire as contractors and to identify potential employees. We hope to sup- port Black businesses and to continue leveling the playing field for black-owned businesses. Fresno Area Hispanic Foundation As the largest Latino-owned cannabis business in the US, Cookies found a partner in the Fresno Area Hispanic Foundation. Since 2001, the Fresno Area Hispanic Foundation has been com- mitted to strengthening the Fresno-area Hispanic community by supporting the start-up and growth of Hispanic businesses in Central California through technical assistance, outreach, advoca- cy, and access to capital. The FAHF offers workshops, technical assistance, and capital for start-up or expanding businesses in the community. We are honored to support this foundation, which helps hundreds of businesses and entrepreneurs every year get the tools they need to thrive in Fresno. Fresno Economic Development Corporation Cookies has donated to the Fresno Economic Development Corporation. Since 1981, the Fresno Economic Development Corporation has been committed to attracting, expanding, and retaining business in Fresno. The Corporation brings in new busi- nesses through marketing efforts and facilitating site selection within Fresno County and supports existing businesses via its collaborative partners and resources. Social Responsibility Plan7.1 1261 Wishon OPCO, LLC • District 1 • • • 137 SUPPORT OF FRESNO BUSINESSES As a future Fresno business, Cookies supports and utilizes local businesses whenever possible. We have set the goal of spending 60% of our non-cannabis operational dollars on Fresno businesses. We have identified the following businesses that we intend to work with through our community outreach and research: By supporting local businesses, including minority-owned and women-owned business, we hope to spread prosperity throughout the community. We will make public an annual report detailing our spending in Fresno to hold ourselves accountable to our commitments. VOLUNTEER SERVICES: PAID VOLUNTEER TIME OFF Cookies has a paid volunteer time program to facilitate leadership in the community. The program allows 40 hours per year of paid employee volunteering during working hours. Employees who take advantage of the program are free to select a charity, nonprofit, or their child’s school to support with their volunteer time. If Cookies employees do not know where to volunteer, we have selected Poverello House and the United Way as our favored organizations for volunteers. We will encourage our workers to be active in the community through the paid volunteer program. The paid volunteer program not only promotes social good but also helps Cookies’ employees develop new skills while empowering them to become leaders in their community. The volunteer program provides our team with a better understanding of the community, which will in turn allow us to be more responsive to community needs in the future. VOLUNTEER SERVICES: COMMUNITY BEAUTIFICATION DAYS Cookies will establish Community Beautification Days where employees will pick up trash and clean up graffiti in the area around the dispensary. Additionally, we plan to conduct tree planting events with Tree Fresno as part of our Community Beautification Days to offset our carbon emissions. Information about these Community Beautification Days will be posted in our dispensary, and employees will provide inquiring customers with information on how to take part. Customers and community members wishing to participate will be rewarded with store discounts or branded merchandise. In the past, we have organized beach cleanups with Surfrider for our employees and customers to attend. SUPPORT OF CITY SPONSORED EVENTS Cookies donated to the Fresno Police Neighborhood Watch. Our donation will be used to support the Police and Neighborhood Watch’s annual toy drive for local youth. We are excited to contribute to ensure that local youth can have a happy holiday. Fresno is home to many popular city sponsored festivals and events throughout the year. As part of our integration into the community, Cookies is proud to participate in the events that Fresno residents support. We look forward to participating in Taco Truck Thrown Down, Grizz Fest, and Mardi Gras. These events are important and part of the backbone of what makes Fresno. We have set a budget of for sponsoring community events. We explored sponsoring events over the summertime, but Covid-19 health guidelines have limited our options to participate in community events. Since most festivals are family-friendly events, we will participate in a way where cannabis is not visible to festival attendees. We look forward to supporting events that benefit the community at large. CANNABIS EDUCATION EVENTS Cookies understands that one of its major responsibilities is to educate the community about cannabis. Specifically, people have questions about the laws governing cannabis use and possession, about the health risks and potential benefits of cannabis, about safe cannabis consumption, and about the cannabis products available for purchase. We take this responsibility seriously. Cookies will host regular community education seminars to help members of the local community learn more about the science and regulations concerning cannabis in an informal, approachable setting. Topics will include the endocannabinoid system in the human body, regulations behind personal use and cultivation, the medicinal benefits of cannabis, what to look for before purchasing a product, how Social Responsibility Plan7.1 1261 Wishon OPCO, LLC • District 1 • • • 138 to read and understand a cannabis product label, cannabis safety, dosage, and more. Seminars will include recognizable figures from the cannabis industry and will be modeled after author lectures at bookstores—welcoming, engaging, and informative. Cookies endeavors to be more than a dispensary. We aim to provide the community with an educational platform where we teach people about cannabis and demystify the complexities of the cannabis industry, all while finding the product that works best for them. We have learned through experience that an informed community benefits everyone. We intend to collaborate with community partners on education events, including Community Hospital Foundation. 7.1.1: EXPUNGEMENT EVENTS AND OUTREACH SERVICES EXPUNGEMENT EVENTS One of the successes of cannabis legalization in California is the state’s expungement program for people adversely impacted by the War on Drugs. Unfortunately, expungement can be a complicated process. Cookies will keep education material on expungement in our dispensary and dedicate time and resources to reach out to customers and members of the public who can benefit from the state’s expungement program. Cookies has established a partnership with the Fresno EOC Street Saints program to host future expungement clinics. We have made an initial donation of for the purpose of sponsoring the event. A copy of the memorialization letter is attached in Appendix A. We have had one meeting with Street Saints to discuss the proposed program. We have agreed to host an in-person expungement clinic as soon as local health regulations permit such a gathering. In addition, Cookies will host an annual expungement clinic with the OneJustice Justice Bus. The Justice Bus is a travelling legal aid clinic providing free legal services to low income Californians. For any expungement event we host or sponsor, Cookies will rent the event space, provide assistance, from educational material to one-on-one professional help, to ensure that its customers and members of the public who qualify for expungement can take advantage of the state program. These events will be advertised in store and on Cookies’ website and social media platforms, which reach millions of people. OUTREACH SERVICES Cookies appreciates the importance of community outreach for its expungement event and initiatives aimed at reparative justice. We have developed an outreach campaign to gather input on our specific expungement event as well as how we can best work with communities disproportionately impacted by the war on drugs. The aim of our program is to educate and to be a responsive and impactful partner in the community and to those who have been adversely impacted by the war on drugs. Our outreach campaign will begin with a press release announcing our listening campaign. We will arrange for coverage in local media outlets including the Fresno Bee, Fresno’s Black newspaper the California Advocate, and the Spanish language publication Vida En El Valle. Other outreach methods will include posting to our social media platforms, emails to our non-profit partners, and flyers disseminated at churches, barber shops, and beauty supply stores. The press release will be available in English and Spanish. Twice per year, we will hold an event in the community and one virtually. We will invite the Fresno community to participate in our listening sessions. Our listening sessions will focus on informing the community about our expungement events and impacts of the war on drugs. In addition, we will educate the public on cannabis, and opportunities to participate in social equity programs. We will listen to the community on how we can enhance our expungement programs to mitigate the harms from the war on drugs and communities disproportionately impacted by policing. For example, we intend to host a job fair in collaboration with our expungement event. The job fair will provide benefits to the community beyond expungement. We believe that listening to the community is the first step to providing an event that is truly responsive to community needs. We will partner with other groups whenever possible. Due to Covid-19, Cookies has been limited in its ability to hold gatherings with the public as part of its outreach program. Nevertheless, prior to submission of the application, we have: (i) met with local leadership at Fresno Chamber of Commerce, Fresno Metro Black Chamber of Commerce, Fresno Area Hispanic, Fresno Economic Development Corporation, and Vision View; (ii) engaged with leadership at local nonprofits including Poverello House, Fresno Economic Opportunity Commission, Breaking the Chains, Fresno Barrios Unidos, and the United Way; and (iii) solicited input from key community stakeholders. After our listening sessions, we will engage with our stakeholders, including government officials, community leaders, and our non-profit partners. We will use these meetings to review community input from our listening sessions. Our stakeholders will provide feedback to ensure that the community’s voice is clearly represented. We will use the feedback from our stakeholder meetings to guide our expungement program, education initiatives, messaging, and efforts to mitigate harms from the war on drugs. We will launch a project specific website to track our progress, inform the community of our expungement program and education events to mitigate harms from the war on drugs, and identify resources for residents to further participate: • Minorities for Medical Marijuana – focused on providing advocacy, outreach, research, and training as it relates to the business, social reform, public policy, and health/wellness in the cannabis industry. • The Drug Policy Alliance – an organization seeking to advance policies and attitudes that reduce the harms of both drug use and drug prohibition. Expungement Events and Outreach Services7.1 - 7.1.1 1261 Wishon OPCO, LLC • District 1 • • • 139 • Cage-Free Cannabis – helps the cannabis industry and its consumers repair harms of the War on Drugs. • The Last Prisoner Project – a nonprofit coalition of cannabis industry leaders, executives, and artists dedicated to bringing restorative justice to the cannabis industry. We will promote our expungement event and other education initiatives through the same methods we used to announce our listening sessions. In addition, we will leverage our relationships with non-profits to inform the public, including Poverello House, Fresno Economic Opportunity Commissions, Breaking the Chains, Fresno Barrios Unidos, and United Way. We will also inform the membership of the civic groups that we have joined, including the Fresno Metro Black Chamber of Commerce, Fresno Area Hispanic Foundation, Fresno Economic Development Corporation, and Vision View. 7.1.2: ENVIRONMENTAL BUSINESS MODEL Cookies has incorporated an environmentally sustainable business model to encourage environmentally friendly business practices. These policies are intended to address and reduce Cookies’ overall environmental impact and cover topics such as reducing carbon emissions, maintaining an energy efficient facility, clean energy sourcing, energy-efficient transportation, and environmentally friendly waste recycling. We have implemented these policies to great effect at our other dispensaries and will do the same in Fresno. Energy efficient lighting. We will use energy efficient lighting fixtures and LED bulbs to light our dispensary. Our goal is to use no more than 0.6 Watts per square foot for our lighting needs. Certain lights will also automatically shutoff according to a set schedule so that energy is not unnecessarily consumed. Low-flow toilets and faucets. To reduce water waste, all toilets will be low-flush, and aerators will be installed on faucets to reduce water and energy consumption. These additions will contribute to an environment of water and energy conservation at our facility. Storm water capture system. Depending on the building suitability, we will implement a storm water capture system to partially cover our water needs for landscaping surrounding our building and indoor plants. Solar energy system. If feasible, we will install a solar energy system to contribute to our goal of carbon neutrality and energy efficiency. Carbon filtration system. Volatile organic compounds (“VOCs”) are a type of environmental pollution that can be negated by an efficient carbon filtration system. We will install carbon filters based on the square footage of our facility and ensure a negative air pressure such that VOCs are forced through the system instead of out into the environment. has incorporated an ENVIRONMENTALLY SUSTAINABLE BUSINESS MODEL Local Hiring. We have a policy to promote local hiring to achieve a target of 90%. Local hiring reduces the environmental impact associated with transportation to work. Electric/Hybrid/Low MPG delivery vehicles. We will incorporate the use of electric, hybrid, and low MPG vehicles in our delivery fleet. All vehicles used for customer delivery will run at over 40 miles per gallon of gasoline or be hybrid or electric. Alternative transportation incentives. We will encourage employees and customers to bike, walk, or take public transportation to the dispensary. We will ensure that there is sufficient bicycle parking at our facility. Customers who make the effort to reduce their transportation footprint will be rewarded with store discounts. Energy Star appliances. When stocking offices and employee breakrooms, we will ensure that Energy Star appliances are selected to reduce our energy consumption. Solid waste recycling. We will contract with a recycling service and follow a recycling plan concerning the separation of recyclable materials (e.g. paper, glass, and plastic). Employees will be educated on source separation of recyclables. Packaging conservation. We will reward customers with a small store discount for bringing cannabis packaging and cartridges back to the dispensary for recycling. We may also provide reusable tote bags to customers that they may bring back for discounts on purchases. No single use plastic products. Virtually all the plastic that has ever been made still exists today as it stays in the environment for up to 1,000 years. We will not utilize single use plastic products, including plastic bags, coffee cups, plastic cups, cutlery, and stirrers. Environmental Business Model 7.1.1 - 7.1.2 1261 Wishon OPCO, LLC • District 1 • • • 140 ENVIRONMENTALLY CONSCIOUS BUSINESS PRACTICES IN DESIGN Cookies believes in an integrated development approach, instilling values of sustainability, health, and wellness during design and operation. Our architects, developers, and operators are the curators of our urban environments. We understand the environmental impact of our work and accept the responsibility that comes along with it. In all aspects of our business, we seek to reduce our carbon footprint while providing quantifiable health benefits to staff and guests. Our design team focuses on two key concepts which are supported by a variety of design-specific strategies: Sustainable Design: Design and construction practices that align with Leadership in Energy and Environmental Design and Living Building Future design standards; Thoroughly evaluating existing conditions and mandating low embodied carbon construction materials; Daylight-controlled, circadian lighting, designed for health and low energy usage; Building insulation that reduces the need for air conditioning; Window coverings or film made from recycled materials to add to UV reflection and reduce heat gain in the dispensary; Pursuing operational carbon neutrality; and Incorporating environmentally responsible products including, but not limited to: FSC certified wood; Low carbon core building materials; No or low-urea formaldehyde wood and composite wood; and High recycled metal products (90%+ post-consumer content). Cookies will give preference to products and businesses committed to environmental transparency and reducing their overall carbon footprint. HEALTH AND WELLNESS TRANSPARENCY: • Environmental impact analysis that aligns with the WELL Building Standard (The WELL Building Standard is a performance-based system for measuring, certifying, and monitoring features of the built environment that impact human health and wellbeing, through air, water, nourishment, light, fitness, comfort, and mind); and • Incorporating chemically transparent, healthy core and finish materials (HPDs, Red List Free, Declare Label, Cradle to Cradle, Greenguard Gold, Rainforest Certified). Cookies will also ensure that our heating and cooling systems are being used at energy-efficient levels. Moreover, employees will be trained to turn off non-essential electronics and appliances at night or when not in use for extended periods of time. To shed light on our progress in satisfying our long-term efficiency goals, we will conduct semiannual energy audits, regularly educate staff on environmentally sound practices, and quantify our energy consumption. 7.1.3: UTILIZATION OF VACANT BUILDINGS Cookies is proud of its 1264 North Wishon Avenue location for a Lemonnade retailer not only because of the character and design we have planned for it, but because we have an opportunity to breathe life into a historic building in Fresno’s Tower District. Built in 1958, 1264 North Wishon was designed for finance, and still complies with federal standards. The building’s previous occupant was the Bank of America Tower District Branch, which closed on November 28th, 2017. Since then, the building has remained vacant, as defined by Fresno Municipal Code Section 10-603(o), and has been a hub for people without homes in the community. We are now excited and honored to revitalize the building by giving it purpose once again, and to improve the quality of the Tower District by providing both lighting and security to the area. Utilization of Vacant Buildings7.1.2 - 7.1.3 1261 Wishon OPCO, LLC • District 1 • • • 141 Utilization of Vacant Buildings7.1.3 1261 Wishon OPCO, LLC • District 1 • • • 142 7.2: PUBLIC HEALTH OUTREACH AND EDUCATION PROGRAM: RISK OF YOUTH USE OF CANNABIS Cookies submits this plan for a public health outreach and educational program that outlines the risks of youth use of cannabis and that identifies resources available to youth related to drugs and drug addiction. Cookies Fresno’s majority shareholder Kacey Auston is a mother and a grandmother. She appreciates the importance of cannabis and drug education and our role in preventing youth access. She has witnessed for decades the dangerous combination of poverty and drugs. She and Cookies are dedicated to supporting adult community leaders in their drug messaging to youths and identifying local community resources for addiction. EDUCATIONAL CONTENT As a leading cannabis operator, Cookies is deeply committed to customer and community education. To ensure our cannabis educational program is scientifically accurate, we have taken two measures to ensure the accuracy of our educational material. The first is to base our cannabis education program on material produced by Stanford Medicine’s Cannabis/Marijuana Awareness & Prevention Toolkit,* which is a theory-based and evidence-informed resource created by educators, parents, and researchers aimed at preventing middle and high school students’ use of cannabis. By using the Stanford cannabis program, our education material will feature messages and concepts that are accurate and appropriate for youth. Cookies’ second measure to ensure accuracy is to have our materials vetted by a physician before release. Unlike other applicants, Cookies has a physician on its ownership team, Dr. Matthew Kurtz. He will be responsible for reviewing any educational material to ensure that it is scientifically accurate and appropriate for the intended audience. Dr. Kurtz will be a tremendous resource in preventing the spread of misinformation. TARGET AUDIENCES As a cannabis business, Cookies will not directly target youth or adolescents with our educational material; instead, we will provide our educational material to adults who work with or around youth and adolescents on a regular basis. Our aim is to empower adults, leaders, and influencers to have responsible, factual conversations about cannabis with the youths they serve. Target audiences for our education campaign include: YOUTH GROUP LEADERSHIP. Cookies will target the adult leaders of youth groups, including the Fresno Economic Opportunities, the Boys and Girls Club of Fresno County, Fresno Inner City, Valley Teen Ranch, and the Fresno Police Activities League, which provides programs for at risk children. These organizations provide diverse programming, including Spanish language programming, for youth in Fresno. By reaching youth group leadership, we introduce the Stanford cannabis education program and local resources for youths. We believe that we can reach a broad section of the youth population if we work with a variety of youth groups. PARENTS. To reach parents, Cookies will focus on educating Parent Teacher Associations in Fresno. In addition, to reach a broader group of parents, we will target our message at foster family agencies, including Kids Kasa and Angels of Grace. Parents are a vital resource in youth and adolescent communication, and so we hope to leverage parents’ ability to communicate and provide them with the tools necessary to talk about cannabis with their kids. SCHOOL DISTRICT. If supported by the superintendent, Cookies will target the leadership of the Fresno School District and its teachers, counselors, and other professionals. Schools are ideal settings for a public health campaign aimed at children and adolescents. Messages about cannabis health risks and youth can be reinforced regularly throughout the school year. EDUCATIONAL STRATEGIES Cookies will employ the following educational strategies in connection with its public health campaign: EDUCATION CARDS. Cookies will create pamphlets and education cards for distribution to its target audience. The education cards will cover health and safety issues relating to youth exposure to cannabis as well as provide resources available to youth related to drugs and drug addiction. Education cards offer information and resources in a cost effective and direct manner. Cookies is capable of producing high-quality cards because education cards are very similar to social media, where our posts reach an audience of millions. Material for education cards can be repurposed for media campaigns, brochures, and health fairs. The education cards are intended for wide distribution within our target audiences, e.g. youth group leadership, parents, school officials, health care community. EDUCATION SESSIONS. Cookies will hold community education sessions at its location for its target audiences. Unique among the applicants, we have an owner who is a doctor and can lecture on cannabis issues involving youth and risks to health. The education sessions present an opportunity for us to connect with the community. Whenever possible, we will collaborate with different groups in the community to reach a broader audience. The education sessions can be held in a small, classroom style format. Due to Covid-19 related health orders, we can hold our education sessions in a webinar or internet streaming format to comply with local health orders. Our goal is to hold monthly education sessions for the target audiences in the community. Public Health Outreach and Education Program7.2 1261 Wishon OPCO, LLC • District 1 • • • 143 EDUCATION TOPICS AND MESSAGING Cookies’ education topics and messaging are based on the Stanford Medicine Cannabis Awareness & Prevention Toolkit. These topics and messages can be adapted to fit the individual needs of educators and students in all types of settings, including: elementary, middle, and high schools; community-based organizations; and health-related agencies. The following are examples of two messages that we will advance: CANNABIS METHODS OF USE AND HEALTH RISKS. This topic will cover the different methods of using cannabis and potencies associated with: (i) joints; (ii) blunts; (iii) vaping; (iv) pipes and bongs; (v) dabbing; (vi) edibles; and (vii) sprays, tinctures, and capsules. The material will highlight THC concerns, including that different methods carry different risks; it is difficult to determine the amount of THC being consumed; and THC negatively impacts youth brain development. It will cover the risks associated with inhalation including: that smoke is inhaled deep into the lungs and damages the respiratory system; that blunts and spliffs introduce nicotine, which is extremely addictive; and that vaping is not a safe alternative. The programming will also cover edibles, including: that it takes longer to feel their effects; one serving of an edible can vary in the amount of THC; there is no way to “sober up”; and that it is almost impossible to tell how much THC is in them. Finally, the material will include addiction resources available within the community. THC AND THE BRAIN. This topic will cover dopamine and the role of dopamine in the brain when doing activities that are important for survival. We will amplify the message that cannabis and other drug use as a teen can lower how much dopamine the brain produces (meaning they feel less pleasure) and can hijack the survival hierarchy by telling the brain that cannabis is necessary for survival. The education material will stress that by age 21 the introduction of cannabis is less likely to impact the survival hierarchy because brain development is almost done, and it is more difficult to remove harmful substances from one’s survival hierarchy that were introduced prior to age 21. The educational material will encourage positive messaging on abstaining from cannabis use until the brain is done developing. YOUTH RESOURCES In all educational material, Cookies will include public health resources for youth as recommended by Stanford University. These programs are put on by municipal and county public health departments in various jurisdictions, including San Mateo County, Santa Barbara County, Los Angeles County, San Francisco County. The municipal and county programs provide youths and teens with unbiased factual information related to cannabis use, the health effects of cannabis use, and drug addiction. These web links include: BE BLUNT: West Contra Costa Alcohol, Marijuana, and Prescription Drug Coalition beblunt.org CANNABIS DECODED: County of San Mateo www.cannabisdecoded.org LET’S TALK CANNABIS: California Department of Public Health www.cdph.ca.gov/Programs/DO/ letstalkcannabis/Pages/youth.aspx LET’S TALK CANNABIS: LA County: County of Los Angeles Public Health www.publichealth.lacounty.gov/sapc/teens/ TRUTH (OR NAH!?): San Francisco Department of Public Health www.truthornahsf.org LET’S TALK CANNABIS: Santa Barbara Public Health www.letstalkcannabissbc.org For local resources available to youth related to drugs and drug addiction, our education material will direct youth to Fresno County Substance Use Disorder Services (SUD). SUD has the primary responsibility for administering the county’s alcohol and drug programs. Its mission is to support appropriate education, prevention and treatment services to reduce or eliminate alcohol and other drug related barriers to ongoing health, well-being, and economic independence of individuals, families and communities. SUD contracts with 20 community-based organizations providing alcohol and drug prevention, intervention, treatment and recovery services throughout the County of Fresno for youth and adults. Public Health Outreach and Education Program7.2 1261 Wishon OPCO, LLC • District 1 • • • 144 SUD offers the following local initiatives to youths on drugs and drug addiction: LOCK IT UP PROJECT: This community-based program increases awareness of the risks and consequences associated with the illicit use of prescription painkillers by teens and adults aged 12-20 years old. The Lock It Up Project partners with school districts, pharmacies, medical and behavioral health professionals, parents and youth to provide information, town hall meetings, outreach events, and media messages to address this issue. PATH PROJECT: This program is a comprehensive approach aimed at changing the broad social norms around the use of marijuana by targeted high use youth aged 12-20, with a focus on African American youth. The PATH Project influences current and potential future marijuana users by creating a social environment and legal climate in which marijuana becomes less desirable, less acceptable, and less accessible. SUBSTANCE ABUSE MINI-GRANT PROGRAM: The Alcohol and Other Drug (AOD) Prevention Mini-Grant Program is extending existing prevention services in Fresno County by offering opportunities for youth and young adults to receive funding in the form of mini-grants for prevention-based projects. SOCIAL NORMS CAMPAIGN: This campaign addresses the reduction of underage and binge drinking through a Social Norms Campaign that targets urban, rural and non-traditional high school students, community college students, and youth aged 12-20 in Fresno County. Parents, school staff, and other interested adults are active partners. FRIDAY NIGHT LIVE/CLUB LIVE PROGRAM: This program offers youth-driven social events in a drug and alcohol-free environment that encourages participants to connect to their school and community while fostering youth leadership development tools. COMMUNITY EDUCATION EVALUATION Cookies will evaluate the quality and effectiveness of its community education program. We will meet with our community stakeholder partners monthly to solicit feedback on community needs and the responsiveness of our community education program. In addition, we will evaluate annually the overall framework of our community education program. Community education activities are documented throughout the year and include but are not limited to the following elements: (1) community feedback; (2) number of events with community partners; (3) number of educational events and sessions; (4) audience type addressed by a particular education piece; (5) number of participants or recipients of an education piece; (6) number of information cards or pamphlets distributed; (7) number of education-related website and social media posts; (8) visitor impressions on our online educational material. Our annual Community Education Reports will be shared with our Advisory Board and other community stakeholders for review. We will also share these reports with the city upon request. 7.3: SOCIAL EQUITY REINVESTMENT PROGRAM Cookies is committed to social equity and to demonstrate our commitment we will contribute 0.5% of gross receipts towards the Fresno Community Reinvestment Fund. We estimate that this will result in an annual payment in the amount of $66,243. We are fully aligned with the Fresno Community Reinvestment Fund’s efforts to support local equity businesses, especially the work to increase access to real estate and access to financing. We know how difficult it is to build a cannabis business and we are eager to welcome new owners—owners who are from and represent the communities they are a part of—to the cannabis industry. At Cookies we are proud of our history of a dedication to social equity as demonstrated through our social equity partnerships. We helped to open the first social equity dispensary in San Francisco—Berner’s on Haight—the first dispensary in the city owned by a Black man, Shawn Richard, a local nonviolence advocate. We have partnered with Grandiflora Genetics, a social equity brand from Oakland that specializes in high-quality flower bred from unique plants with distinct terpenoid and cannabinoid profiles. Our partnership with these amazing companies has led to their increased success and the strengthening of the California cannabis industry. Community uplift, whether it be by partnership or financial contribution or cannabis education for future workers and entrepreneurs, is what Cookies is all about. Cookies’ longtime goal has been to champion and support local cannabis equity businesses by empowering them to open stores, launch new products, and expand their brand. In Fresno, we will continue to champion local equity businesses and local entrepreneurs as they fight to be a part of this growing industry. We hope our commitment to the Fresno Community Reinvestment Fund is just the beginning of a fruitful, community-minded relationship between Cookies and the City of Fresno. Social Equity Reinvestment Program7.2 - 7.3 1261 Wishon OPCO, LLC • District 1 • • • 145 Social Equity Reinvestment Program7.3 1261 Wishon OPCO, LLC • District 1 • • • 146 Social Equity Reinvestment Program7.3 1261 Wishon OPCO, LLC • District 1 • • • 147 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 148 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 149 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 150 United Way Fresno and Madera Counties 4949 E. Kings Canyon Road Fresno • California • 93727 • 559.244.5710 www.uwfm.org • www.facebook.com/uwfmc March 27, 2020 Anna Mendoza Cookies Retail 4675Mac Arthur Court, Ste. 1500 Newport Beach, CA 92660 RE: Donation from Cookies Retail Dear Ms. Mendoza, I would like to personally thank you for your donation to the United Way Fresno and Madera Counties in the amount We value the commitment you have shown to United Way and the more than 200,000 persons served every year in our community. The work done through United Way and our partner agencies simply would not occur without the generous contributions of great friends and associates like you. We appreciate your leadership and support as “together” we work toward building a stronger Fresno and Madera Counties by mobilizing the caring power of communities to make long-lasting change and impact in community conditions. Thank you for giving so graciously and for helping the United Way Fresno and Madera Counties to better serve our communities! Advancing the common good, Lindsay S. Callahan President and CEO Funds to be directed as follows: $15,000 to United Way Fresno and Madera Counties Covid-19 Relief Fund. This acknowledgement of your gift is provided pursuant to Section 170(f)(8) of the Internal Revenue Code. For tax purposes, the United Way of Fresno County provided no goods or services to the donor in return for this gift 501©3 94-1156514 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 151 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 152 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 153 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 154 Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 155 Nov. 22, 2020 Re: Lemonnade My name is Daniel Renteria. I h a v e b e e n a r e s i d e n t o f F r e s n o ' s T o w e r D i s t r i c t f o r over fifty -five years. The 'Tower' is kno w n a s t h e h e a r t a n d s o u l o f F r e s n o . I t ' s a l s o known for music venues, art, performance theatr e s , a n d i n c r e d i b l e r e s t a u r a n t s . T h e residents are loyal and suppor t i v e o f T o w e r m e r c h a n t s a n d f r e q u e n t c o m m u n i t y e v e n t s . I retired after working thirteen y e a r s f o r t h e C o u n t y o f F r e s n o a n d t w e n t y -five years for the S tate of California. Most recent l y I s e r v e d a s t h e D i r e c t o r o f t h e T o w e r D i s t r i c t Marketing Committee. My role w a s t o p r o m o t e T o w e r b u s i n e s s e s , s p o n s o r f a m i l y - friendly events, and to develop f u n d r a i s e r s . I s t e p p e d a s i d e f r o m t h i s p o s i t i o n approximately f our months ago to pursue other i n t e r e s t s . I a m s t i l l i n v o l v e d w i t h maintaining the integrity of the T o w e r D i s t r i c t a n d c o n t i n u e t o w o r k o n l o c a l i s s u e s . The purpose of this letter is to l e n d m y s u p p o r t t o L e m o n a d e w h i c h i s a p p l y i n g f o r permits to op en in the Tower District. Throu g h r e s e a r c h , I u n d e r s t a n d L e m o n n a d e h a s a successful business model. Th e y o p e r a t e w i t h h i g h s t a n d a r d s , e x c e p t i o n a l q u a l i t y , a n d well trained staff. Lemonade a l s o h a s s e t t h e s t a n d a r d s i n t h e c a n n a b i s i n d u s t r y . T o m y knowledge, Lemonnade has de v e l o p e d p r o g r a m s t o f u n d n o n -profit organizations and support the local community. I n s u m m a r y , I d o b e l i e v e L e m o n n a d e w i l l s e r v e a s a n asset to the Tower District, pro v i d e m u c h n e e d e d j o b s , a n d h e l p n o n -profits to enhance the quality of life for those who are less fo r t u n a t e . Daniel Renteria CDC&R District Administrator ( R ) Tower District Mark eting Committee Director (R) Letters of Support and Appreciation 1261 Wishon OPCO, LLC • District 1 • • • 156 Cookies Retail Philanthropy Board Member Comm i t m e n t F o r m The Advisory Board of Philanthropy for Cookies Retail in Fresno, exists to determine the allocation of Cookies’ community benefits fund to nonprofit organizations in Fresno. The commitments I agree to as a member of the Advisory Board of Philanthropy for Cookies Retail, I will put forth my best effort to: • Attend and fully participate in the board meetings. • Prepare as best as is possible for each board meeting. • Act in the best interests of the Fresno community and the organ ization. • Strive to educate myself in the issues facing the city of Fresn o in order to best help in the philanthropic efforts of Cookies Retail. • Actively voice my opinions and concerns on issues that arise in the meetings, and listen to my fellow board member’s opinions respectfully and wi th an open mind. • Work in tandem with my fellow board members and Cookies Retail to achieve the best outcome for the funds to be donated to various nonprofits in Fresno. • Maintain the confidentiality of any sensitive information provi ded to me by Cookies Retail. I certify with my signature that I understand the expectati ons of Cookies Retail that come with my service on the board and hereby intend to serve on said Board of Advisors of Philanthropy for Cookies Retail. Kaya Herron 9/30/20 Name Date Signature Board Commitment Form 1261 Wishon OPCO, LLC • District 1 • • • 157 ________________ ________________ INITIALS INITIALS © 2017AIR CRE. AllRights Reserved.Last Edited:11/23/2020 2:16 PM AACL­1.02,Revised 06­10­2019 Page 1 of 2 1.ASSIGNMENT OF LEASE Forvaluable considera�on,the receipt and adequacy ofwhich arehereby acknowledged,Cookies Retail LLC ("ASSIGNOR") hereby assigns and transfersto 1261 Wishon OPCO, LLC ("ASSIGNEE") allofASSIGNOR's right,�tle and interest in and to that certain Lease dated April 1, 2020 ,byand between ASSIGNOR and 1264 Wishon, LP , as Lessor, covering those certain Premises located at (street address, city,state,zip) 1264 N Wishon Fresno, CA 93728 and as is more par�cularly described in such Lease. ThisAssignment shallbe effec�ve:November 12, 2020 . Signatures to thisAssignment accomplished by means ofelectronic signature orsimilar technology shall belegal and binding. In addi�on,ASSIGNORhereby transferstoASSIGNEE allof ASSIGNOR'sinterest in and to anysecurity orotherdeposits paid to Lessorunderthe termsof such Lease. Dated: 2.ASSUMPTIONOF LEASE Assignee acknowledges that it hasinspected the Premisesand reviewedthe Leaseand Assignee hereby accepts theforegoingAssignment and assumes and agreesto bebound by and performall obliga�ons of the Lessee pursuant totheLease arisingon or a�er the dateof this Assignment and toabide byall of theterms, provisions, covenantsand condi�ons of theLease. Dated: ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT OF LESSOR Cookies Retail LLC By: NamePrinted:Brandon Johnson Title:Manager By: NamePrinted: Title: Assignor 1261 Wishon OPCO, LLC By: NamePrinted:Brandon Johnson Title:Manager By: NamePrinted: Title: Assignee 3.CONSENTTO ASSIGNMENT Lessorhereby consents to theforegoing Assignment and Assump�on ofthe Lease. It is understood and agreed, however, thatthe foregoing consent is not a waiver of Lessor'sright toconsent toorimpose restric�ons upon anyfuture assignmentor suble�ng.In addi�on,thisassignment does not release Assignorfrom liabilityfor any of the obliga�ons of theLessee underthe Lease. Dated:1264 Wishon, LP By:Richburg Management, Inc. NamePrinted: Title: ITS:General Manager By: DocuSign Envelope ID: E3AC7488-1352-4456-83EA-77483617D99D 12 / 03 / 2020 12 / 03 / 2020 Doc ID: ffa0cd497470f98d4c9e45ffa431344360882b85