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HomeMy WebLinkAboutAgenda PacketCITY OF ARCADIA Arcadia Business Permit and License Review Board Meeting Agenda Tuesday, August 13, 2024, 6:00 p.m. Pursuant to the Americans with Disabilities Act, persons with a disability who require a disability related modification or accommodation in order to participate in a meeting, including auxiliary aids or services, may request such modification or accommodation from Planning Services at (626) 574-5423. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to the meeting. 根据《美国残障人法案》的规定，需要提供残障相关调整或便利设施才能参加会议的残障人士（包括辅助器材或服务），可向规划服 务部请求获得此类调整或便利设施，电话号码 (626) 574-5423。请在会前 48 小时通知规划服务部，以便作出合理安排，确保顺利参 加会议。 Pursuant to the City of Arcadia’s Language Access Services Policy, limited-English proficient speakers who require translation services in order to participate in a meeting may request the use of a volunteer or professional translator by contacting the City Clerk’s Office at (626) 574-5455 at least 72 hours prior to the meeting. 根据阿凯迪亚市的语言便利服务政策，英语能力有限并需要翻译服务才能参加会议的人可与市书记官办公室联系（电话：626-574- 5455），请求提供志愿或专业翻译服务，请至少在会前 72 小时提出请求。 CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL Vincent Tsoi, Chair Marilynne Wilander, Vice Chair David Arvizu, Board Member Angela Hui, Board Member Domenico Tallerico, Board Member SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS Pursuant to Government Code Section 54953(b), Board Member Tallerico will be attending the Business Permit and License Review Board Meeting via teleconferencing from the Hotel Duchessa della Sila– Viale della Repubblica, 451, 87055 San Giovanni in Fiore CS, Italy at 3:00 a.m. 1 PUBLIC COMMENTS (5 minute time limit per person) Each speaker is limited to five (5) minutes per person, unless waived by the Planning Commission. Under the Brown Act, the Commission or Board Members are prohibited from discussing or taking action on any item not listed on the posted agenda. PUBLIC HEARING All interested persons are invited to appear at a public hearing and to provide evidence or testimony concerning any of the proposed items set forth below for consideration. Separate and apart from the applicant (who may speak longer at the discretion of the Commission) speakers shall be limited to five (5) minutes per person. The applicant may additionally submit rebuttal comments, at the discretion of the Commission. You are hereby advised that should you desire to legally challenge in court or in an administrative proceeding any action taken by the City Council regarding any public hearing item, you may be limited to raising only those issues and objections you or someone else raised at the public hearing or in written correspondence delivered to the City Council at, or prior to, the public hearing. 1.Resolution No. 2150– Denying the appeal and upholding the revocation of the business license for Sphinx Mart located at 142 E. Huntington Drive CEQA: Not a Project Recommendation: Adopt Appellant: Saad Saadhom There is a ten day appeal period. Appeals are to be filed by 5:30 p.m. on Monday, August 26, 2024. ADJOURNMENT The Business License and Review Board will adjourn and bring the meeting to a close. 2 DATE: August 13, 2024 TO: Business Permit and License Review Board FROM: Lisa Flores, Deputy Development Services Director By: Alejandra Smith, Business License Officer SUBJECT: RESOLUTION NO. 2150 - DENYING THE APPEAL AND UPHOLDING THE REVOCATION OF THE BUSINESS LICENSE FOR SPHINX MART LOCATED AT 142 E. HUNTINGTON DRIVE CEQA: Not A Project Recommendation: Adopt SUMMARY Sphinx Mart is a tobacco shop located at 142 East Huntington Drive. The Appellant and business owner of Sphinx Mart, Mr. Saad Saadhom, is appealing the City’s decision to revoke his business license. On June 25, 2024, the City revoked Sphinx Mart’s business license after it was determined that the business was in violation of Arcadia Municipal Code for selling cannabis products and California Health and Safety Code for selling illegal mushrooms. On July 5, 2024, the Appellant filed a written appeal. It is recommended that the Business Permit and License Review Board adopt Resolution No. 2150 (refer to Attachment No. 1), denying the appeal and upholding the business license revocation for Sphinx Mart with the condition that this business owner may not be allowed to apply for another business license within this City for twelve (12) months from this revocation appeal. BACKGROUND On June 17, 2013, the City issued a business license to Sphinx Mart to allow for the sales of tobacco at 411 East Huntington Drive, Unit 112. On September 19, 2019, Sphinx Mart relocated to 142 East Huntington Drive and a business license was issued to allow for the sale of tobacco, tobacco accessories, and snacks (refer to Attachment No. 3). The business has been operating in the City for eleven (11) years. A condition of approval was placed on the business license that “no cannabis sales or alcohol” shall be allowed. The business owner had a previous violation for having illegal gambling machines in 2019, but brought his business into compliance soon after he was cited. 3 Business License Revocation Sphinx Mart – 142 E. Huntington Drive August 13, 2024 Page 2 of 5 The subject commercial building has two units, one of which is currently occupied by Sphinx Mart, and the other unit will be occupied in the future by a speakeasy bar. The building is located on the south side of Huntington Drive in Downtown Arcadia. The property is zoned CBD, Central Business District. The CBD zone is intended to promote a strong pedestrian-oriented environment and to serve community and regional needs for retail and service uses, professional offices, restaurants, public uses, and other similar and compatible uses. According to the Los Angeles County Assessor’s database, the commercial building is owned by PI Properties No. 79 LLC. The property owner has been informed of all correspondence from the City related to this revocation. In May of this year, Business License Services conducted an inspection of all the tobacco stores in the City. It was discovered that Sphinx Mart had illegal cannabis products for sale. Businesses which engage in the sale of cannabis products are considered a marijuana dispensary and are prohibited under the Arcadia Development Code Section 9109.01.140. It was also discovered that Sphinx Mart had illegal psychotropic mushroom products for sale, which are considered a Schedule I Controlled Substance under California Health and Safety Code Section 11054. The business was operating in violation of the State and local law. As a result, on June 25, 2024, the City sent a Notice of Revocation letter (refer to Attachment No. 2) to the Appellant, and a citation was issued for the violations. The letter informed Appellant that unless an appeal was filed, the revocation required the business to close and cease operation on July 6, 2024. The Appellant filed a written appeal on July 5, 2024 (refer to Attachment No. 4). DISCUSSION Pursuant to Arcadia Municipal Code (“AMC”) Section 6216.7(3), the License Officer “may suspend or revoke any business license upon receipt of any of the following information from any source that” “the holder of the license has violated any conditions of said license, or has violated or permitted to be violated any law or laws of the United States or the State, or any ordinance applicable to the premises where the business covered by said license is conducted, or in connection with said business.” In this case, Sphinx Mart’s business license was revoked for violating both their business license conditions of approval and State and local law. First, Sphinx Mart violated their business license conditions of approval which prohibit the sale of cannabis, by selling various cannabis products (refer to Attachment Nos. 3 and 5). Second, Sphinx Mart violated local law by operating as an illegal marijuana dispensary in violation of local law. Specifically, Arcadia Development Code (“ADC”) Section 9104.02.030(C) prohibits marijuana dispensaries in all zoning districts in the City: “Marijuana cultivation, dispensaries, manufacturers, and delivery of marijuana, as defined 4 Business License Revocation Sphinx Mart – 142 E. Huntington Drive August 13, 2024 Page 3 of 5 by Division 9 (Definitions), shall be considered prohibited uses in all zoning districts of the City.” Sphinx Mart is considered a marijuana dispensary under ADC Section 9109.01.140, which defines marijuana dispensary as “a facility where marijuana, marijuana products, or devices for the use of cannabis or cannabis products are offered, either individually or in any combination, for retail sale, including an establishment that delivers cannabis and cannabis products as part of a retail sale.” As a facility where marijuana products or devices for the use of cannabis or cannabis products are offered for retail sale, as will be explained below, Sphinx Mart was illegally operating as a marijuana dispensary. Marijuana (cannabis) is defined under ADC Section 9010.01.140 as “[a]ll parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin. It does not include (1) Industrial hemp, as defined in Section 11018.5 of the California Health & Safety Code; or (2) The weight of any other ingredient combined with marijuana to prepare topical or oral administrations, food, drink or other product.” Marijuana products are defined under ADC Section 9010.01.140 as “[m]arijuana that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing marijuana or concentrated cannabis and other ingredients.” Sphinx Mart was offering for sale the following cannabis/marijuana products: • STIIIZY 40’s Infused Pre-Rolls (premium cannabis flowers infused with live resin); • TREHouse Delta 9+ Syrup and D9+ THC Syrup (chemicals found in cannabis sativa plants); • STIIIZY Weed Vape Pods (products which contain varying levels of THC and CBD); and • FRYD Extracts Vape Cartridge (products which contain THC, cannabis oil, and live resin). Refer to Attachment No. 5 for photos of the illegal cannabis products. Sphinx Mart’s business license was also revoked due to their sale of illegal mushrooms. Mushrooms and mushroom products which contain psilocybin or psilocin are a Schedule I Controlled Substance under Health and Safety Code section 11054(d)(18) and (d)(19). Under Health & Safety Code Section 11378(2), possession for sale of this 5 Business License Revocation Sphinx Mart – 142 E. Huntington Drive August 13, 2024 Page 4 of 5 controlled substance is illegal. Attachment No. 6 are photos of these illegal mushroom products containing psilocybin. Appellant is requesting that the City not revoke his business license on the basis that he was not aware that these products are illegal since he was informed by his wholesaler that the mushrooms comply with State law and are legal to sell. He has also stated that this business is his only source of income and is requesting that the Board reconsider this revocation and reinstate the business license with a contingency that he will comply with all the rules and regulations that are applicable to the local law (refer to Attachment No. 4). Given that sale of cannabis products are a violation of local law, and sale of Schedule I drugs containing psilocybin are a violation of State law, Appellant should have been aware of these City and State regulations. The License Officer recommends that the business license be revoked with a provision that no new business license for any business in the City may be requested by the holder of the revoked license for twelve (12) months. Also, this condition that a new license may not be requested for twelve (12) months applies to the business license holder’s employee, agent, partner, director, officer, controlling stockholder or manager, for any business or location within the city or by any other person for the same business on the same premises where the business covered by the revoked license was conducted or for the same business on a different premises within the City. If, after the period specified, application for a new business license is made, the applicant must comply with all requirements of this Code for issuance of a new business license. There shall be no automatic reinstatement of a revoked business license and the City is under no obligation to grant the new application. ENVIRONMENTAL ANALYSIS The business license revocation is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15358 (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Moreover, the revocation does not constitute a project under the California Environmental Quality Act (“CEQA”) under Section 15061(b)(3) of the CEQA Guidelines, as it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. RECOMMENDATION It is recommended that the Business Permit and License Review Board adopt Resolution No. 2150, denying the appeal and uphold the decision to revoke the City’s business license for Sphinx Mart and that Sphinx Mart employees, agents, partners, directors, officers, controlling stockholders or managers not be allowed to apply for a 6 Business License Revocation Sphinx Mart – 142 E. Huntington Drive August 13, 2024 Page 5 of 5 new business license in the City of Arcadia for a period of twelve (12) months from the date of this revocation appeal. If the Board intends to deny this revocation, the Board should make a motion to deny the revocation stating that the finding(s) does not satisfy with reasons based on the record, and direct staff to prepare a resolution for adoption at the next meeting that incorporates the Board’s decision and specific findings. If any of the Business License and Review Board Members or other interested party has any questions or comments regarding this matter prior to the August 13, 2024, hearing, please contact Business License Officer, Alejandra Smith, at (626) 574-5437, or by email at asmith@ArcadiaCA.gov. Approved: Lisa L. Flores Deputy Development Services Director Attachment No. 1 – Resolution No. 2150 Attachment No. 2 – Notice of Revocation Letter Attachment No. 3 – Sphinx Mart Business License Attachment No. 4 – Appeal Letter Attachment No. 5 – Photos of Cannabis Products Attachment No. 6 – Photos of Mushroom Products 7 Attachment No. 1 Resolution No. 2150 Attachment No. 1 8 1 RESOLUTION NO. 2150 A RESOLUTION OF THE BUSINESS LICENSE PERMIT AND REVIEW BOARD OF THE CITY OF ARCADIA, CALIFORNIA, DENYING THE APPEAL AND UPHOLDING THE REVOCATION OF THE BUSINESS LICENSE FOR SPHINX MART LOCATED AT 142 E. HUNTINGTON DRIVE WHEREAS, on September 19, 2019, the City issued a business license to Mr. Saad Saadhom, the business owner and Appellant of Sphinx Mart that is located at 142 East Huntington Drive, for the sale of tobacco, tobacco products, and food snacks The subject business address is zoned CBD, Central Business District. A condition of approval for Sphinx Mart’s business license provided that no cannabis sales or alcohol shall be permitted and WHEREAS, in May of 2024, Business License Services conducted an inspection of all the tobacco stores in the City. It was discovered that Sphinx Mart had illegal cannabis products for sale. The business was operating in violation of its business license condition of approval prohibiting cannabis sales. Businesses which engage in the sale of cannabis products are considered a marijuana dispensary and are prohibited under the Arcadia Development Code Section 9101.01.140. The business was operating in violation of local law. It was discovered that Sphinx Mart had illegal psychotropic mushroom products containing psilocybin for sale, which are considered a Schedule I Controlled Substance under the California Health and Safety Code Section 11054(d) and their sale prohibited under the California Health and Safety Code Section 11378(2). The business was in violation of the State law; and WHEREAS, Section 6216.7(3), the License Officer may suspend or revoke any business license upon receipt of any of the following information from any source that the 9 2 holder of the license has violated any conditions of said license, or has violated or permitted to be violated any law or laws of the United States or the State, or any ordinance applicable to the premises where the business covered by said license is conducted, or in connection with said business; and WHEREAS, on June 25, 2024, a Notice of Revocation was issued to the Appellant, and a citation was issued for the violations. The business was required to close their business permanently on July 6, 2024, unless an appeal was filed; and WHEREAS, on July 5, 2024, within the prescribed 10-day appeal period, an appeal was timely filed by the Appellant, Mr. Saad Saadhom; and WHEREAS, on August 13, 2024, a public hearing was held before the Business License Permit and Review Board, at which time all interested persons were given full opportunity to be heard and to present evidence. NOW, THEREFORE, THE BUSINESS LICENSE PERMIT AND REVIEW BOARD OF THE CITY OF ARCADIA, CALIFORNIA, HEREBY RESOLVES AS FOLLOWS: SECTION 1. The facts set forth above are true and correct and are incorporated herein by reference. SECTION 2. The Board finds that based upon the entire record, pursuant to Section 6216.7(3) of the Arcadia Municipal Code, the business holder of the license has violated both the conditions of approval of said license, which prohibits the sale of cannabis or cannabis products, and the Arcadia Development Code (“ADC”) Section 9104.02.030(C) which prohibits marijuana dispensaries in all zoning districts in the City. As a facility where marijuana products and/or cannabis products are offered for retail sale, Sphinx Mart is considered a marijuana dispensary under ADC Section 10 3 9109.01.140, which is prohibited in the City of Arcadia. Sphinx Mart’s business license was also revoked due to the sale of illegal mushrooms. Mushrooms and mushroom products which contain psilocybin or psilocin are a Schedule I Controlled Substance. Sale of this controlled substance is illegal under Health & Safety Code Section 11378(2). Attachment No. 4 are photos of this illegal substance these illegal mushroom and products containing psilocybin. Given that the sale of cannabis is a violation of local law, and sale of Schedule I drugs containing psilocybin is a violation of State law, the Appellant should have been aware of these City and State regulations, and the License Office is recommending that the business license be revoked with a provision that no new business license for any business in the City may be requested by the holder of the revoked license for twelve (12) months by the business holder’s employee, agent, partner, director, officer, controlling stockholder or manager, for any business or location within the city or by any other person for the same business on the same premises where the business covered by the revoked license was conducted or for the same business on a different premises within the City. If, after the period specified, application for a new business license is made, the applicant must comply with all requirements of this Code for issuance of a new business license. There shall be no automatic reinstatement of a revoked business license and the City is under no obligation to grant the new application. SECTION 3. The business license revocation is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15358 (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has 11 4 no potential for resulting in physical change to the environment, directly or indirectly. Moreover, the revocation does not constitute a project under the California Environmental Quality Act (“CEQA”) under Section 15061(b)(3) of the CEQA Guidelines, as it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. SECTION 4. For the foregoing reasons the Business License Permit and Review Board determined that the business license for Sphinx Mart shall be revoked subject to the conditions of approval that no new business license for any business in the City may be requested by the holder of the revoked license for twelve (12) months by the business holder’s employee, agent, partner, director, officer, controlling stockholder or manager, for any business or location within the city or by any other person for the same business on the same premises where the business covered by the revoked license was conducted or for the same business on a different premises within the City. If, after the period specified, application for a new business license is made, the applicant must comply with all requirements of this Code for issuance of a new business license. There shall be no automatic reinstatement of a revoked business license and the City is under no obligation to grant the new application. [Signature on the next page] 12 5 Passed, approved and adopted by the Business License Permit and Review Board this 13th day of August 2024. _________________________ Vincent Tsoi, Chair, Business License Permit and Review Board ATTEST: ______________________ Lisa L. Flores Secretary APPROVED AS TO FORM: ______________________ Michael J. Maurer City Attorney 13 Attachment No. 2 Notice of Revocation Letter Attachment No. 2 14 15 16 Attachment No. 3 Sphinx Mart Business License Attachment No. 3 17 18 Attachment No. 4 Appeal Letter Attachment No. 4 19 20 Attachment No. 5 Photos of Cannabis Products Attachment No. 5 21 Figure 1 – Cannabis Products Products in yellow box – STIIIZY 40’s Infused Pre-Rolls Products in blue box – TREHouse Delta 9+ Syrup and D9+ THC Syrup Products in red box – STIIIZY Weed Vape Pods Products in green box – FRYD Extracts Vape Cartridge 22 Figure 2 – Photo taken at Sphinx Mart STIIIZY 40’s Infused Pre-Rolls Figure 3 – Photo from STIIIZY website Figure 4 – Photo from STIIIZY website 23 Figure 5 – Photo taken at Sphinx Mart TREHouse Delta 9+ Syrup and D9+ THC Syrup Figure 7 – Photos from Figure 8 – Photos from TREHouse website TREHouse website Figure 6 – Photos from TREHouse website 24 Figure 9 – Photo taken at Sphinx Mart STIIIZY Weed Vape Pods Figure 10 – Photo from STIIIZY website Figure 11 – Photo from STIIIZY website 25 Figure 12 – Photo taken at Sphinx Mart FRYD Extracts Vape Cartridge Figure 13 – Photos from Flower Avenue Cannabis Online Store Figure 14 – Photos from Flower Avenue Cannabis Online Store 26 Figure 15 – Photo taken at Sphinx Mart Front view of STIIIZY Premium THC Pods 27 Figure 16 – Photo taken at Sphinx Mart Back view of STIIIZY Premium THC Pods 28 Attachment No. 6 Photos of Mushroom Product Attachment No. 6 29 Figure 1 – Mushroom Product Product in yellow boxes – Magic Mushrooms 30 Figure 2 – Mushroom Product 31