The URL can be used to link to this page

Home My WebLink About011326-03.1 AFHC Study Session Deck4**"'eua<irr 6AMERICAS FINEST E PR Danville Study Session Jan. 13th 2026 Impacts of AB8 and request for a path forward • Legal history of hemp and cannabis • Our History • The new legislation and how it effects AFHC • Why the State did what it did • The Hemp Market Became a Backdoor Cannabis Market • The State Lost Control of Enforcement • Political Pressure From the Regulated Cannabis Industry • Product example • Request for path forward • Buffer Zone • The market opportunity • Partnership • Who is Velvet • Cont. • Cont. • Financial Projections • Economic and Community Benefit • Contact info 2 Cannabis remained legal under U.S. federal law until the Marihuana Tax Act of 1937. The policy shift reflected political, economic, and social factors of the era, occurring in the absence of any scientific consensus on cannabis related public health risks. • 1970 - Cannabis classified as a Schedule I under federal law • 1996 - Passage of California Proposition 215: Compassionate Use Act o The first state to legalize medical marijuana • 2014 - 2014 Farm Bill: Hemp research authorized • 2016 - Passage of California Proposition 64: Adult Use of Marijuana Act o Legalizes recreational cannabis for adults 21+ o Contra Costa County Elections Data shows from all Danville precincts - 54% in favor • 2018 - 2018 Farm Bill: Removed hemp from the federal Controlled Substance Act o Legalized production and interstate commerce as long as plant and products contain 0.3% THC or less by dry weight. • Dec 2025: the U.S. government formally initiated the process to remove cannabis from Schedule America's Finest Hemp Co. (AFHC) is a locally owned, downtown Danville wellness retailer founded in 2021 by Danville native Jeff Sutherland. Built as a community -oriented brick -and -mortar business, AFHC was established to provide safe, compliant, and responsibly sourced hemp -derived wellness products to residents of Danville and surrounding communities. From its inception, AFHC prioritized education, transparency, and responsible retail practices, helping customers navigate hemp -based supplements as part of a more natural wellness lifestyle. The business quickly built a reputation known for its high -touch customer experience, thoughtful product curation, with an emphasis on quality. AFHC operated with a strong commitment to community engagement and local stewardship, maintaining a professional storefront, clear operating standards, and a clean compliance history. Its downtown location contributed to foot traffic, local commerce, and the overall vitality of the downtown Danville business district. At its core, AFHC represents a locally rooted, values -driven retail model—one focused on trust, safety, and long- term community. The company's mission has always been to serve Danville responsibly while adapting to evolving regulatory and consumer landscapes. AB 8 Integrates mostly all consumable Hemp into the Cannabis System AB 8 was signed into California law in 2025 to close long-standing regulatory gaps within the industry. Those gaps allowed certain hemp -derived intoxicating products (like delta -8, delta -9, delta -10, THCa, vapes, gummies)to be sold in general retail without the oversight applied to cannabis dispensaries as long as those products contained less than 0.3% delta -9 THC on a dry weight basis. • The current bill now requires mostly all cannabinoid products to be sold through licensed cannabis dispensaries and regulated under the Medicinal and Adult -Use Cannabis Regulation and Safety Act (MAUCRSA). • AB 8 ensures that if a product can cause any psychoactive effects (even if derived from hemp), it must comply with cannabis licensing, testing, tracking, and age verification rules. The town of Danville currently prohibits cannabis retail - which means AFHC can no longer continue operation. 1. The Hemp Market Became a Backdoor Cannabis Market What started as: • Wellness supplements Evolved into: • Wellness products that were the exact same as regulated cannabis producing clear intoxicating effects labeled as hemp All sold: • Without cannabis licensing • Without excise tax • Without age -restricted retail • Without uniform testing standards Reality: Hemp retail had become functionally indistinguishable from cannabis retail, but without cannabis rules. 2. The State Lost Control of Enforcement California had: • CDPH overseeing hemp • DCC overseeing cannabis This created: • Confusion for cities and counties • Inconsistent enforcement • Retailers operating in legal gray zones • No single agency clearly responsible From the state's perspective: Two systems regulating essentially the same products was unworkable. 3. Political Pressure From the Regulated Cannabis Industry Licensed cannabis operators: • Paid high taxes • Complied with strict security, testing, and track -and -trace • Operated under local bans and zoning limits Meanwhile: • Hemp sellers could sell the same intoxicating products labeled as hemp • In grocery, gas stations, liquor stores, wellness stores • With no regulatory burdens This created: • A fairness crisis • A credibility problem for the cannabis regulatory system Bottom line: The state could not justify protecting one market while undermining the other. The fastest fix: Move hemp into the cannabis system. Hemp Product Regulated Cannabis Product *While these two products contain the same ingredients and comparable dosage formats, many hemp products were sold with total THC levels exceeding the 100 mg per -package cap applied to regulated cannabis products—often by 2-10x. In some cases, packages contained up to 1,000 mg of THC, provided the product remained below 0.3% THC by dry weight. st QUAL/1. M� HFM?I �PR4� America's Finest Hemp Co. respectfully requests that the Town of Danville consider whether there are policy options the Town may wish to consider in response to recent statewide regulatory changes that consolidated hemp - derived products into California's regulated cannabis framework. AFHC operated lawfully in downtown Danville beginning in 2021 and was impacted by these statewide changes, which eliminated the prior hemp retail pathway. This request is not for an entitlement or automatic approval, but rather for guidance on whether the Town wishes to explore a carefully structured regulatory framework that could allow an existing Danville business (AFHC) to transition into full state compliance as a licensed cannabis retailer. 600' buffer zone map of downtown area 600 feet is the standard While California does not mandate a single statewide land -use buffer, California does recommend that cities allow cannabis retail adopt a 600 -foot buffer, particularly from: • K-12 schools • Daycare / youth centers • Playgrounds • Libraries Our 422 Hartz Ave location is outside any 600' of these buffers. *Applying the 1,000 -foot buffer similar to tobacco sales would effectively preclude any retailer from locating anywhere within Danville. Map of existing retailers es Pinole Valley W'atershed Walnut Creek Moraga sco San Odro 9 Hay and Clayton Mount Diablo Danville San Ramon Dublin Pleasanton tioCh Oakley Brentwoo Los Vaqueros Reservmir and Watershed Livermore Q The following sales data was provided by Velvet Martinez and reflects purchases made by their customers residing in the Danville area. 2025 Sales Statistics Danville -94526: Danville -94506: Alamo -94507: Diablo -94528: San Ramon -94582: $ 1,100,026.00 $ 521,172.00 $ 942, 094.0 0 $ 46,935.00 $ 344,465.00 AMERICA'S FINEST HEMP + VELVET st QUAL/1. '1110Affv*),Asi America's Finest Hemp has partnered with Velvet in Martinez, with other locations in Napa and Los Angeles AFHC: Local Operator & Community Steward Longstanding Danville business with a clean operating history Deep understanding of local expectations, standards, and sensitivities Responsible for: • Community engagement • Site stewardship and neighborhood compatibility • Ongoing coordination with town Velvet: Operational & Regulatory Backbone One of the top 5 licensed cannabis operators in California Years of experience operating under DCC oversight Brings: • Full track -and -trace compliance • Proven inventory controls and loss -prevention systems • Best -in -class security, training, and SOPs • Audit -ready financial and compliance reporting Key point: Velvet removes "first-time operator risk" entirely. tot velvet 13 Velvet Cannabis Martinez is a full-service, licensed recreational cannabis dispensary located in Martinez, California, serving Contra Costa County and the greater East Bay. Founded with the mission to provide a premium cannabis retail experience, Velvet offers a carefully curated selection of high-quality cannabis products sourced from leading California cultivators and brands. The Martinez location is known for its welcoming and knowledgeable staff, clean and safe retail environment, and commitment to compliance with state regulations, including age verification and tested inventory. Velvet emphasizes education and customer service to help both seasoned consumers and newcomers find products tailored to their needs. In addition to its flagship Martinez storefront, Velvet has expanded its presence with other California locations in Napa and Los Angeles, and the brand has been recognized for excellence in service and community engagement within the cannabis retail industry. Inside Velvet stores, the experience is calm and inviting, with a spa -like flow, attentive service, and a focus on comfort, discretion and the best products the market has to offer. Velvet blends into and beautifies its community in the same fashion and manner that America's Finest Hemp Company has in Danville. VELVET DOES NOT SCREAM CANNABIS Velvet feels like a natural extension of the neighborhood—more like a wellness boutique or curated retail store than a cannabis dispensary. From the outside it adds charm and polish to the streetscape helping make the block look cared for, well maintained, brighter and more welcoming. Financial Projections for Danville Storefront Summary Financials Output In $ USD 2026 2027 2028 2029 2030 Revenue 4,173,000 5,850,000 6,201,000 6,435,000 7,020,000 Gross Profit 2,086,500 2,925,000 3,100,500 3,410,550 3,510,000 Gross Profit Margin (%) 50% 50% 50% 50% 50% EBITDA (68,596) 387,650 458,695 585,221 621,864 Since the company's inception, Velvet has provided tremendous economic and community benefit to the communities they serve. Additionally, Velvet has won a number of prestigious industry awards. • Voted Cannabis Business Times Best Places to Work Six years in a row • Three -time winner of Diablo Magazine Best Cannabis/CBD Store • Five -time winner East Bay Times Best Cannabis/CBD Store • $8+ million paid to the City of Martinez General Fund via a mutually agreed upon Public Benefit Agreement • Over 200 jobs created • $20+ million of labor created EASTEB SUAV TIMESQ" "J EAST BAY 2025 cliahlo ND BEST 0 EAST Nj BAYi MARTINEZ M.Vg7SA Sii 5843 • 2{125 2025 BEST CANNABIS COMPANIES TO WORK FOR P' GSlt4# 18 America's Finest Hemp Co. 422 Hartz Avenue Danville, CA 94526 4 Velvet Cannabis 4808 Sunrise Drive Martinez, CA 94553 Jeff Sutherland, CEO Phone: (925) 406-4400 Email: Jeff@velvetcannabis.com f 4 Farid Harrison, CEO Phone: (415) 517-3380 Email: farid@velvetcannabis.com 5111434t NW.