Transcripts For SFGTV Government Access Programming 20240713

Assuming im reading that. The portion of the cash they hold and they relay more cash that they hold and its probably not calculated. Its not the notion. This is causing confusion. Those are my questions. Any further questions. This is not an action item. Public comment. Just one question last year . The motion would be recommendation with approve of july. We made our First Investment in october. We asked you to bring it back a second time. July was the second time. It was originally presented in april. Thank you. Sorry commissioners. In the past, the only need treat Asset Classes and they are stock bonds and real estate. Go back 100 years and they have averages seven and a half to 11 for the past 100 years. What they didnt tell you when it was stock and bonds let me give you year to date on the total bonds index year to date returns, total bond index 8. 77 . Then i would like to give you the returns of the s p 500 500 for the past 10 years. 13. 78 . And 6060 and index and 6440. Year to date returns 19. 70 . And then weve got real estate and 10year returns to the real estate. 12. 88 year to date returns 27. 8 . So, what i think you should do is have your Investment Consultant together a passive investment in stocks, bonds and real estate and use that as a benchmark not for performing. That includes item number 7. Item number 8. Item number 8. Concession item on manager under review. Curt. Board members, this provides the retirement board with details regarding the the sta us of public in accordance with the guidelines for equity and fixed income manager monitoring and retention by and large managers are most often put on this list for either under performance. Theres been no changes to our list. Our list contains five managers, two equity and thro three fixed. The three fixed income managers are oak tree, afl, cio and pimco. Comments and updates for all five managers are contained within the attachments to the memo and wore pleased to answer any questions. Board questions . Public comment. Item 10. Clerk item 10, chief Investment Officer report. Iming here, investment returns for the month. 1. 46 . Led by a strong rally in u. S. Stocks which were up over three. On a cal fiscal year basis were up 3. 6 for the five months end and for calender year were up almost 13. 8 . Thats led by a 24 and a half percent rally in public equity. Theres a discussion on return and i did want to maybe highlight two things. One as you recall, the equity mark receipts down bigtime. They were down double digits. Primarily because of concerns about tried. Those trade issues are not yet resolved but the markets have rallied none the less. Assuming that those trade issues will be resolved and meanwhile Economic Growth is continuing to be strong and solid. We had a very good jobs report announced after publication of this report and another 266,000 jobs net produced in the month of november. I did want to highlight this is 24 and a half percent return this year. No one predicted that. No one predicted that. Thats not uncommon. For the 10 years ended, the s p 500 is up over 13 and then i looked back at forecast 10 years and everybody was around six or seven or eight percent. And that difference is quite significant. Its 2 50 . So 100 turning into 250 and you know a 7 return over a decade is 100 100 . Its when we hear about forecasted returns its better to think about that as the median projected return in a range of returns. You know. Rather than a single point. The, we have had some closings of items approved by the board in closed session. K. V. C. A private equity investment, we requested 10 million and the board approved such and it did close at 10 million. And 50 milliondollar investment so buy out strategy and we did receive 50 million and mpg2, we received that rounding error slightly less and this is our first Co Investment with main post. We have had one closing that took place a day or two ago and. Kent to the board materials. The purchase alpha fund and Pure Alpha Major Markets Fund have both closed. We requested up to 200 million and in markets two did close and that would be in the absolute return strategy. And the personal items. I have good news. Again after the board materialsment a lot of important things took place after the publication of the package. Our search for our inaugural manager montreal operations is now live. Its been approved. And so that launch started a couple days ago. We have a open position for security annalist of Venture Capital and we will announce the same position from public equity here soon. I thought it would be helpful if we published what our Strategic Initiatives are so those are highlighted on pages throw and four and ill be glad to answer any materials you see the calender of events here in the middle of page four and these are the as asset class updates and and fee disclosure is ab2833. We do have an Investment Committee meeting on january 15th. The Board Meeting is on wednesday, january 8th. And the i. T. Meeting will take place the following week. There are two broad subject matters. I will present on science, technology and innovation and its an interesting time at the speed, scale and impact of innovation is accelerateing and we believe its being underestimated and its impact is underestimated and we have a lot of charts. We saw a few of those today. We will be beginning our kickoff for Asset Allocations. Well bring in recommended strategic allocation perhaps a revision to the board later this year. The first step of that is that anna and allen will be presentingment allen will be presenting on their anticipated they wont be finalized but theyll be close. Expected returns, risks, and correlations by as asset class. Allen will be presenting on leverage at the portfolio level, of course we have leverage at different Asset Classes level at asset class but for the plan as a whole, which a lot of Pension Plans and Institutional Investors are consider, given where yields are, given where Interest Rates are right now it make sense to consider being a lender rather than an investor. Anna will also be presenting both on Asset Allocation as well as beyond the beta returns that i just alluded to that allen will return to in terms of returns, risk and correlations and anna will be presenting the same on alpha returns which again are differences of returns compared to peters through the manager selection. With that ill turn it over to the board for questions. You mentioned that you are planning to talk to all the Board Members. Some of the items you listed related to the board survey that we just did. Any of those items are calender for the boards retreat so id ask you to be careful and that is your job to interview the board. Maybe thats not what you meant. Im not spelling it out. It was feedback for your intentions are great. You dont know everything the board is trying to do. Anything else . It was a discussion item. Public comment. This is enthusiastic supporter of hedge funds. You Board Members dont want me to ask him a question. I question i ask him is what was the return on your Hedge Fund Investments in yearending this is 2019 and how much you paid in performance and Management Fees for those returns. Thank you. Next item. Discussion items. Scheduling 2020 retirement Board Meetings. Were providing aw you a lisf the meetings, youll note in november the second wednesday is observed veterans day and so we have moved the meeting to the tuesday, the day before. It would be november 10th. And with that, i would be happy to answer any questions. This is your whole report, right . Right. The court and were all this is the item number im sorry. Item number 10. 11. Ok. Carry on. Right. On the calender of Board Meetings. Next item. We need to have Public Comment. Public comment. Carry on. Clerk item number 12, discussion item. 2020 forward calender retirement Board Meetings. This is a calender included in my report every month but this shows you the forward calender for 2020. The items highlighted in red are the new investment related reports, quarterly reports and semi annual reports and just for your attention on those and when those would be scheduled. I would be happy to answer questions related to this calender. I bring it forward on a monthly basis and included as part of my c. E. O. Report. Thats it. Just a reminder to the members about the implicit no, im not there yet. [laughter] this is the forward calender. Item number 12. Public comment. Next. Clerk discussion items executive directors report. Here we go. First of all, we issued the notice for a retirement board election. Commission stanceberrys term is expired in february of 2020. We sent it to all the departments and notified everyone that was required to be notified and the filing date only one candidate returned their petition and that was commissioner stanceberry so we verified he had 20 valid signatures which is the requirement for him to be nominated and when we determined that he had the 20 signatures, we notified the department of elections that there was no need to hold an election. So, commissioner stansbury will serve through a second, another actually you had a partial term. You will be serving through 2025. Congratulations for another fiveyear commitment to the retirement board. [applause] we saved a lot of money. We saved a good 70,000 on not having to conduct big elections. Ive provided you a copy of the october dashboard, operations dashboard. Also, again, weve been reminded make sure you mark your calender, the off site board retreat is scheduled for wednesday, february 19th, starting at noon. It will be held at 50 california street. And we anticipate that it potentially run beyond five but hopefully not much beyond 5 00. President driscoll, thank you for reminding me, theres a requirement that each of you complete the implicit bias training before december 31st. Ive included in my report the instructions on how to access that. My understanding is that its a 45minute course that you need to have a certificate of completion and you must file it can darlene before december 31st. Im not familiar with this training. Department heads have to take a full day training. Which im going to be take on december 20th. So i just a reminder, i believe that there is a list that needs to be presented to the board of supervisors of all Department Heads and commissioners who have not completed the implicit bias training so were hoping that none of us will be on that list when its presented to the board of supervisors. If you need any help accessing that, give darlene a call. Finally, our Holiday Party will be this friday. Starting at 2 00 at hotel fusion. Certainly, any Board Members that can stop by you are welcome. On behalf of staff, we want to wish the retirement board as well as the audience a very safe and happy holiday season. With that ill answer any questions. Questions . Suggestions regarding the court text report which is 62 pages long. In the future, only put in the first six or seven pages, delate pages 155. Ok. The summary in the first couple pages is more than that. The board member has a question, they can ask you for the more detail. The timing between the last discussion from the government how were going to completely flip how we present the Educational Opportunities did not give us time to eliminate that but were certainly not going to subscribe to the full core text report for the coming year and well work with ashley to get the most valuable, you know, educational and conference opportunities. Hopefully well have that ready by january. Great. Any questions or Public Comment . Last item i believe is clerk members in order. Board members wish to make comments. Just a little funny one. When you are told to be quiet, go do something productive. Clean out a file and i found the 2008 investment list of all of the consultants and everything else. So, ill share it. I shared it and so if you want to take a look at it, its kind of when we were down, down, down. [laughter] motion to adjourn is in order. Second. Just simply say happy holidays and our appreciation to our staff on behalf of the board. Thank you. Thank yo adjourned. Shop dine in the 49 promotes local businesses and challenges residents to do their shop dine in the 49 with within the 49 square miles of San Francisco by supporting local Services Within the neighborhood we help San Francisco remain unique successful and vibrant so where will you shop dine in the 49 my name is jim woods im the founder of Woods Beer Company and the proprietor of woods copy k open 2 henry adams what makes us unique is that were reintegrated brooeg the beer and serving that cross the table people are sitting next to the xurpz drinking alongside were having a lot of ingredient that get theres a lot to do the district of retail shop having that really close connection with the consumer allows us to do exciting things we decided to come to Treasure Island because we saw it as an amazing opportunity cant be beat the views and real estate that great county starting to develop on Treasure Island like minded Business Owners with last week products and want to get on the ground floor a nobrainer for us when you you, you buying local goods made locally our supporting Small Business those are not created an, an sprinkle scale with all the machines and one person procreating them people are making them by hand as a result more interesting and cant get that of minor or anywhere else and San Francisco a hot bed for local manufacturing in support that is what keeps your city vibrant well make a compelling place to live and visit i think that local business is the lifeblood of San Francisco and a vibrant community in november of 2016, california voters passed proposition 64. The adult use of marijuana act. San franciscans overwhelmingly approved it by nearly 75 . And the law went into effect in january of 2018. [ ] under californias new law, adults age 21 and over can legally possess up to 1 ounce of cannabis and grow up to six plants at home. Adults in california can legally give up to 1 ounce to other adults. In the state of california, we passed a law that said adult consumption is legal. If you are an adult and in possession of certain amounts, you will no longer be tried. You will not be arrested or prosecuted for that. That is changing the landscape dramatically. [ ] to legalization of cannabis could bring tremendous economic and social benefits to cities like San Francisco. This industry is projected to reach 22 billion by the year 2020. And that is just a few years away. It can be a huge Legal Industry in california. I think very shortly, the actual growing of marijuana may become the biggest cash crop in the state and so you want that to be a legal tax paying cash crop, all the way down the line to a sales tax on the retail level. The california medical industry is a 3 billiondollar industry last year. Anticipating that multiplier as 20, 30, 50 times in the consumer marketplace once adult use is really in place, you could go ahead and apply that multiplier to revenue. It will be huge. When that underground economy becomes part of the regular tax paying employment economy of the bay area, it not only has a direct impact, that money has a ripple impact through the economy as well. It is not just about retail. It is not just about the sensor. Is about manufacturing pick a lot of innovative manufacturing is happening here in San Francisco in addition to other parts of the state as well as the cultivation. We should be encouraging that. There is a vast array of jobs that are going to be available in the newly regulated cannabis industry. You can start at the top tier which a scientist working in testing labs. Scientists working at extraction companies. And you work towards agricultural jobs. You have ones that will require less education and you look towards Cannabis Retail and see traditional retail jobs and you see general management jobs. Those things that are similar to working at a Bar Restaurant or working at a retail store. We are offering, essentially, high paid manufacturing jobs. Typical starting wage of 18 20 an hour, almost no barrier to entry, you do not need an education. That means that people who do not have college educations, workingclass people, will have an opportunity to have a job at cultivating cannabis plants. Theres a whole wide array of Job Opportunities from the seedling to the sale of the cannabis. [ ] last year, they said 26 Million People came to San Francisco. The Tourism Industry continues to be very robust here and the city and county of San Francisco is about a billiondollar industry. If we use a conservative cannabis user Adoption Rate to 15 that means 4 million tourists want that means 4 million tourists want to purchase cannabis. And we need to be ready for th them. In 2015, as adult use legalization efforts gained momentum in california, the supervisors created the First Investment<\/a> in october. We asked you to bring it back a second time. July was the second time. It was originally presented in april. Thank you. Sorry commissioners. In the past, the only need treat Asset Classes<\/a> and they are stock bonds and real estate. Go back 100 years and they have averages seven and a half to 11 for the past 100 years. What they didnt tell you when it was stock and bonds let me give you year to date on the total bonds index year to date returns, total bond index 8. 77 . Then i would like to give you the returns of the s p 500 500 for the past 10 years. 13. 78 . And 6060 and index and 6440. Year to date returns 19. 70 . And then weve got real estate and 10year returns to the real estate. 12. 88 year to date returns 27. 8 . So, what i think you should do is have your Investment Consultant<\/a> together a passive investment in stocks, bonds and real estate and use that as a benchmark not for performing. That includes item number 7. Item number 8. Item number 8. Concession item on manager under review. Curt. Board members, this provides the retirement board with details regarding the the sta us of public in accordance with the guidelines for equity and fixed income manager monitoring and retention by and large managers are most often put on this list for either under performance. Theres been no changes to our list. Our list contains five managers, two equity and thro three fixed. The three fixed income managers are oak tree, afl, cio and pimco. Comments and updates for all five managers are contained within the attachments to the memo and wore pleased to answer any questions. Board questions . Public comment. Item 10. Clerk item 10, chief Investment Officer<\/a> report. Iming here, investment returns for the month. 1. 46 . Led by a strong rally in u. S. Stocks which were up over three. On a cal fiscal year basis were up 3. 6 for the five months end and for calender year were up almost 13. 8 . Thats led by a 24 and a half percent rally in public equity. Theres a discussion on return and i did want to maybe highlight two things. One as you recall, the equity mark receipts down bigtime. They were down double digits. Primarily because of concerns about tried. Those trade issues are not yet resolved but the markets have rallied none the less. Assuming that those trade issues will be resolved and meanwhile Economic Growth<\/a> is continuing to be strong and solid. We had a very good jobs report announced after publication of this report and another 266,000 jobs net produced in the month of november. I did want to highlight this is 24 and a half percent return this year. No one predicted that. No one predicted that. Thats not uncommon. For the 10 years ended, the s p 500 is up over 13 and then i looked back at forecast 10 years and everybody was around six or seven or eight percent. And that difference is quite significant. Its 2 50 . So 100 turning into 250 and you know a 7 return over a decade is 100 100 . Its when we hear about forecasted returns its better to think about that as the median projected return in a range of returns. You know. Rather than a single point. The, we have had some closings of items approved by the board in closed session. K. V. C. A private equity investment, we requested 10 million and the board approved such and it did close at 10 million. And 50 milliondollar investment so buy out strategy and we did receive 50 million and mpg2, we received that rounding error slightly less and this is our first Co Investment<\/a> with main post. We have had one closing that took place a day or two ago and. Kent to the board materials. The purchase alpha fund and Pure Alpha Major Markets Fund<\/a> have both closed. We requested up to 200 million and in markets two did close and that would be in the absolute return strategy. And the personal items. I have good news. Again after the board materialsment a lot of important things took place after the publication of the package. Our search for our inaugural manager montreal operations is now live. Its been approved. And so that launch started a couple days ago. We have a open position for security annalist of Venture Capital<\/a> and we will announce the same position from public equity here soon. I thought it would be helpful if we published what our Strategic Initiatives<\/a> are so those are highlighted on pages throw and four and ill be glad to answer any materials you see the calender of events here in the middle of page four and these are the as asset class updates and and fee disclosure is ab2833. We do have an Investment Committee<\/a> meeting on january 15th. The Board Meeting<\/a> is on wednesday, january 8th. And the i. T. Meeting will take place the following week. There are two broad subject matters. I will present on science, technology and innovation and its an interesting time at the speed, scale and impact of innovation is accelerateing and we believe its being underestimated and its impact is underestimated and we have a lot of charts. We saw a few of those today. We will be beginning our kickoff for Asset Allocation<\/a>s. Well bring in recommended strategic allocation perhaps a revision to the board later this year. The first step of that is that anna and allen will be presentingment allen will be presenting on their anticipated they wont be finalized but theyll be close. Expected returns, risks, and correlations by as asset class. Allen will be presenting on leverage at the portfolio level, of course we have leverage at different Asset Classes<\/a> level at asset class but for the plan as a whole, which a lot of Pension Plans<\/a> and Institutional Investors<\/a> are consider, given where yields are, given where Interest Rates<\/a> are right now it make sense to consider being a lender rather than an investor. Anna will also be presenting both on Asset Allocation<\/a> as well as beyond the beta returns that i just alluded to that allen will return to in terms of returns, risk and correlations and anna will be presenting the same on alpha returns which again are differences of returns compared to peters through the manager selection. With that ill turn it over to the board for questions. You mentioned that you are planning to talk to all the Board Members<\/a>. Some of the items you listed related to the board survey that we just did. Any of those items are calender for the boards retreat so id ask you to be careful and that is your job to interview the board. Maybe thats not what you meant. Im not spelling it out. It was feedback for your intentions are great. You dont know everything the board is trying to do. Anything else . It was a discussion item. Public comment. This is enthusiastic supporter of hedge funds. You Board Members<\/a> dont want me to ask him a question. I question i ask him is what was the return on your Hedge Fund Investments<\/a> in yearending this is 2019 and how much you paid in performance and Management Fees<\/a> for those returns. Thank you. Next item. Discussion items. Scheduling 2020 retirement Board Meeting<\/a>s. Were providing aw you a lisf the meetings, youll note in november the second wednesday is observed veterans day and so we have moved the meeting to the tuesday, the day before. It would be november 10th. And with that, i would be happy to answer any questions. This is your whole report, right . Right. The court and were all this is the item number im sorry. Item number 10. 11. Ok. Carry on. Right. On the calender of Board Meeting<\/a>s. Next item. We need to have Public Comment<\/a>. Public comment. Carry on. Clerk item number 12, discussion item. 2020 forward calender retirement Board Meeting<\/a>s. This is a calender included in my report every month but this shows you the forward calender for 2020. The items highlighted in red are the new investment related reports, quarterly reports and semi annual reports and just for your attention on those and when those would be scheduled. I would be happy to answer questions related to this calender. I bring it forward on a monthly basis and included as part of my c. E. O. Report. Thats it. Just a reminder to the members about the implicit no, im not there yet. [laughter] this is the forward calender. Item number 12. Public comment. Next. Clerk discussion items executive directors report. Here we go. First of all, we issued the notice for a retirement board election. Commission stanceberrys term is expired in february of 2020. We sent it to all the departments and notified everyone that was required to be notified and the filing date only one candidate returned their petition and that was commissioner stanceberry so we verified he had 20 valid signatures which is the requirement for him to be nominated and when we determined that he had the 20 signatures, we notified the department of elections that there was no need to hold an election. So, commissioner stansbury will serve through a second, another actually you had a partial term. You will be serving through 2025. Congratulations for another fiveyear commitment to the retirement board. [applause] we saved a lot of money. We saved a good 70,000 on not having to conduct big elections. Ive provided you a copy of the october dashboard, operations dashboard. Also, again, weve been reminded make sure you mark your calender, the off site board retreat is scheduled for wednesday, february 19th, starting at noon. It will be held at 50 california street. And we anticipate that it potentially run beyond five but hopefully not much beyond 5 00. President driscoll, thank you for reminding me, theres a requirement that each of you complete the implicit bias training before december 31st. Ive included in my report the instructions on how to access that. My understanding is that its a 45minute course that you need to have a certificate of completion and you must file it can darlene before december 31st. Im not familiar with this training. Department heads have to take a full day training. Which im going to be take on december 20th. So i just a reminder, i believe that there is a list that needs to be presented to the board of supervisors of all Department Heads<\/a> and commissioners who have not completed the implicit bias training so were hoping that none of us will be on that list when its presented to the board of supervisors. If you need any help accessing that, give darlene a call. Finally, our Holiday Party<\/a> will be this friday. Starting at 2 00 at hotel fusion. Certainly, any Board Members<\/a> that can stop by you are welcome. On behalf of staff, we want to wish the retirement board as well as the audience a very safe and happy holiday season. With that ill answer any questions. Questions . Suggestions regarding the court text report which is 62 pages long. In the future, only put in the first six or seven pages, delate pages 155. Ok. The summary in the first couple pages is more than that. The board member has a question, they can ask you for the more detail. The timing between the last discussion from the government how were going to completely flip how we present the Educational Opportunities<\/a> did not give us time to eliminate that but were certainly not going to subscribe to the full core text report for the coming year and well work with ashley to get the most valuable, you know, educational and conference opportunities. Hopefully well have that ready by january. Great. Any questions or Public Comment<\/a> . Last item i believe is clerk members in order. Board members wish to make comments. Just a little funny one. When you are told to be quiet, go do something productive. Clean out a file and i found the 2008 investment list of all of the consultants and everything else. So, ill share it. I shared it and so if you want to take a look at it, its kind of when we were down, down, down. [laughter] motion to adjourn is in order. Second. Just simply say happy holidays and our appreciation to our staff on behalf of the board. Thank you. Thank yo adjourned. Shop dine in the 49 promotes local businesses and challenges residents to do their shop dine in the 49 with within the 49 square miles of San Francisco<\/a> by supporting local Services Within<\/a> the neighborhood we help San Francisco<\/a> remain unique successful and vibrant so where will you shop dine in the 49 my name is jim woods im the founder of Woods Beer Company<\/a> and the proprietor of woods copy k open 2 henry adams what makes us unique is that were reintegrated brooeg the beer and serving that cross the table people are sitting next to the xurpz drinking alongside were having a lot of ingredient that get theres a lot to do the district of retail shop having that really close connection with the consumer allows us to do exciting things we decided to come to Treasure Island<\/a> because we saw it as an amazing opportunity cant be beat the views and real estate that great county starting to develop on Treasure Island<\/a> like minded Business Owners<\/a> with last week products and want to get on the ground floor a nobrainer for us when you you, you buying local goods made locally our supporting Small Business<\/a> those are not created an, an sprinkle scale with all the machines and one person procreating them people are making them by hand as a result more interesting and cant get that of minor or anywhere else and San Francisco<\/a> a hot bed for local manufacturing in support that is what keeps your city vibrant well make a compelling place to live and visit i think that local business is the lifeblood of San Francisco<\/a> and a vibrant community in november of 2016, california voters passed proposition 64. The adult use of marijuana act. San franciscans overwhelmingly approved it by nearly 75 . And the law went into effect in january of 2018. [ ] under californias new law, adults age 21 and over can legally possess up to 1 ounce of cannabis and grow up to six plants at home. Adults in california can legally give up to 1 ounce to other adults. In the state of california, we passed a law that said adult consumption is legal. If you are an adult and in possession of certain amounts, you will no longer be tried. You will not be arrested or prosecuted for that. That is changing the landscape dramatically. [ ] to legalization of cannabis could bring tremendous economic and social benefits to cities like San Francisco<\/a>. This industry is projected to reach 22 billion by the year 2020. And that is just a few years away. It can be a huge Legal Industry<\/a> in california. I think very shortly, the actual growing of marijuana may become the biggest cash crop in the state and so you want that to be a legal tax paying cash crop, all the way down the line to a sales tax on the retail level. The california medical industry is a 3 billiondollar industry last year. Anticipating that multiplier as 20, 30, 50 times in the consumer marketplace once adult use is really in place, you could go ahead and apply that multiplier to revenue. It will be huge. When that underground economy becomes part of the regular tax paying employment economy of the bay area, it not only has a direct impact, that money has a ripple impact through the economy as well. It is not just about retail. It is not just about the sensor. Is about manufacturing pick a lot of innovative manufacturing is happening here in San Francisco<\/a> in addition to other parts of the state as well as the cultivation. We should be encouraging that. There is a vast array of jobs that are going to be available in the newly regulated cannabis industry. You can start at the top tier which a scientist working in testing labs. Scientists working at extraction companies. And you work towards agricultural jobs. You have ones that will require less education and you look towards Cannabis Retail<\/a> and see traditional retail jobs and you see general management jobs. Those things that are similar to working at a Bar Restaurant<\/a> or working at a retail store. We are offering, essentially, high paid manufacturing jobs. Typical starting wage of 18 20 an hour, almost no barrier to entry, you do not need an education. That means that people who do not have college educations, workingclass people, will have an opportunity to have a job at cultivating cannabis plants. Theres a whole wide array of Job Opportunities<\/a> from the seedling to the sale of the cannabis. [ ] last year, they said 26 Million People<\/a> came to San Francisco<\/a>. The Tourism Industry<\/a> continues to be very robust here and the city and county of San Francisco<\/a> is about a billiondollar industry. If we use a conservative cannabis user Adoption Rate<\/a> to 15 that means 4 million tourists want that means 4 million tourists want to purchase cannabis. And we need to be ready for th them. In 2015, as adult use legalization efforts gained momentum in california, the supervisors created the San Francisco<\/a> Cannabis State Legalization Task<\/a> force. This task force offered to research and advice to the supervisors, the mayor and other city departments. We knew that adult use legalization was coming to the ballot and stat that would bring with it a number of decisions that the city would have to make about zoning and regulation and so forth. And i decided at that time, at a know it was a great, that rather than have a fire drill after the ballot measure passes, as suspected it would, we should plan an event. So i authored a task force to spend a year studying it and we made it a broadbased task force. We prepared ourselves by developing a Health Impact<\/a> assessment and partnered that with key stakeholder discussions with washington, oregon, colorado, to really learn lessons from their experience rolling out both adult and medicinal cannabis. Within days of the passing of the proposition, ed lee called on agencies to act decisively. He issued an executive order asking the department of public health, along with planning and other city departments to think through an internal working group around what we needed to do to consider writing this law. We collectively, i would say that was representatives from g. S. A. , as well as the mayors office, met with a lot of departments to talk through what prop 64 and the implementation of prop 64 it meant to them. The mayor proposed an office of cannabis, a onestop shop for permits allowing operators to grow and sell cannabis. He wanted a smart structure. He wanted a regulatory structure that ensured that kids didnt have access and communitys were safe and that consumers were safe. And he wanted to ensure, more importantly, it was a regulatory structure that encouraged diversity and inclusivity. This is an office that will be solely charged with a duty of wanting not only the policies that we create, implementing and enforcing them, but also executing the licenses that are needed. Were talking about 20 different licenses that will put us into compliance with what is happening on the state level. This is a highly, highly regulated industry now, at this point. We have anywhere from 710 departments that will be working with these industry participants as they go through the permitting process. That is a lot of work at a loss of coordination. We are creating a permitting process that is smart and is digital. It is much easier for the user and for community input, and is less mired in bureaucracy. For the First Time Ever<\/a> in San Francisco<\/a> history, standalone licenses are available for all aspects of the nonretail side of the cannabis industry. Now, a cultivator can go in to the department of building inspection and to the department of health and say, with this first registered and temporary license, and then what will eventually be a permanent license, this is the project, this is what i am going to do. Very rarely in City Government<\/a> do we interact with industries that are asking to be regulated. These guys want to be regulated. They want to be compliant. They want to work with the city. That is rare. San francisco has created a temporary licensing process so that the preexisting operators here in San Francisco<\/a> can apply for a temporary state licensed. We have taken teams of up to 12 inspectors to inspect the facility twice a day. We have been doing that with the department of building inspection and the department of public health. And the fire department. It is really important for the industry to know that we are treating them like industry. Like manufacturing. Like coworkers pick so that is the way we are approaching this from a health and safety and a Consumer Protection<\/a> network. This is just the way practice happens with restaurants or manufacturing facilities. Because there are so many pieces of industry that people havent even thought about. There are different permits for each piece. You have to set up a permitting system for growing, for manufacturing, for testing. For delivery. For retail. You have to make sure that there is an appropriate health code. Certainly the regulation of alcohol in terms of restaurants and retail its probably a model for how this industry will be regulated as well, both on sale and consumption. It is completely uncharted territory. There is a blessing and a curse with that. It is exciting because we are on a new frontier, but it is very nerveracking because theres a lot at stake. And quite frankly, being San Francisco<\/a>, being the state of california, people are looking to us. We hope that cannabis does become more of an accepted part of society in the same way that alcohol is, the same way coffee is. It is a very innovative fear, particularly around manufacturing. San francisco could be an epicenter. San francisco can be a leader here. A Global Leader<\/a> in the Cannabis Movement<\/a> and set a bar just to other communities and cities and states and this nation how it is done. Good afternoon and welcome to the land use and Transportation Committee<\/a> for today, monday, december 16th, 2019. Our last land use Committee Meeting<\/a> of the 2019 calender year. I am aaron peskin, the chair of this committee joined to my left by Committee Member<\/a> supervisor matt haney and our clerk is ms. Erika major. We welcome, in her own right for her first trial by fire experience is Land Use Committee<\/a> deputy City Attorney<\/a> anne pearson. 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