The purpose of this bulletin is to provide guidance to Office of Cannabis’ (OOC) grantees about the new grant effort for 2023. This bulletin discusses grantee eligibility, documentation requirements, and expense categories.
Grant Eligibility
To be eligible for grants, applicants must have met the following eligibility criteria, adopted by OOC in coordination with the Cannabis Oversight Committee, as of December, 1, 2022:
1. The applicant must be an Equity Applicant, and must have a Cannabis Business Permit application submitted to OOC without disqualifying factors (which include but are not limited to withdrawal, abandonment, and applicant ineligibility);
2. The Equity Applicant must own at least 40% of the corporate Applicant connected with their Cannabis Business Permit application;
3. The Equity Applicant’s Cannabis Business Permit application must have been formally referred to the Planning Department and have a status of Build-out or Approved.
Grant awards must be used to support the Cannabis Business Permit application that meets the above criteria. An Equity Applicant who has multiple applications eligible for grants will receive no more than one grant award. The OOC will circulate an award notification to eligible applicants. Applicants will then be required to notify the OOC in writing no later than February 16, 2023 of their intent to move forward. Subsequently, the OOC will provide applicants with a link to fill out the grant application.
If an applicant believes they are eligible for this grant, but are not contacted by the OOC with an award notification, then the applicant must notify the OOC by February 16, 2023 of their eligibility by email and include supporting documentation demonstrating that eligibility has been met.
Grant Eligibility for Redistribution
The grant term expires June 9, 2023. Subsequently, the OOC will likely conduct a redistribution effort – redistributing unexpended direct grant funds to eligible grantees. To be eligible for grant redistribution, a prospective grantee must have met the initial Grant Eligibility in addition to demonstrating that 70% of their grant award was expended by the end of the initial grant term, June 9, 2023.
Documentation Requirements
Grantees must enter into a Grant Agreement and provide one or both of the following: (1) a request for advancement of funds that includes an estimated budget detailing how they plan on spending down their grant award; and/or (2) a request for reimbursement that lists and documents past expenditures eligible for reimbursement. Grant funds will be disbursed in lump-sum advancements and/or via reimbursement requests. The OOC may determine that specific applicants for grants are eligible only for reimbursement, and not for advancement. No more than $30,000 total may be requested across all advancement requests.
Grantees must maintain accurate files and records for at least five years and provide these records to the City, immediately upon request. If a particular advanced expense is $25,000 or more, then the Grantee must provide documentation (e.g. invoice, cancelled checks, receipts) for that expense without waiting for a request from the City.
During the grant term, grantees seeking advancement must provide Progress Report(s) reflecting the amount of grants expended and whether there are any changes to their estimated budget. Review the Grant Agreement for additional terms and conditions.
Eligible Expenses
Grant funds may be used for the following eligible expenses:
|
1. Rent |
8. Cannabis Related Taxes |
|
2. Regulatory Fees |
9. Banking and Escrow Fees |
|
3. Regulatory Compliance |
10. Packaging and Materials |
|
4. Cannabis Testing |
11. Marketing and Advertising |
|
5. Fixtures and Equipment |
12. Furniture |
|
6. Capital Improvements |
13. Accounting Services |
|
7. Legal Services |
|
Grant awards may be subject to local, state, and federal taxes. The OOC strongly encourages grantees to consult tax professionals. Free technical assistance may be available at no charge.
If grant funds are not expended by the end of the grant term or used for non-eligible expenses, then the grantee must return those funds to the City and County of San Francisco by the end of the grant term or risk enforcement action. Enforcement may include, but is not limited to: civil penalties, criminal penalties, permit revocation, and being unable to apply for future grants for a period of 5 years.