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Washington DC Cultivation Center Application Outline !"#$ %&' $ # ()"#$ % $ $ $! $! $*+,- ( $ # . $ /' +---"# $ Application Questions for Cultivation Centers QUESTION 1 0 1 21 +$ " 3$ 4$ 5$ 6$ "$ 7$ 89" 3$ QUESTION 1 RESPONSE $*4,- +$ /9" $ $: $ 4$ 51 0;3 1 ;3 <.5 =.++46+> >;!"$$ " $ 6$ "1 ;31 7$ 89 "3$ ?&" 89$ Appendix A15@+ QUESTION 2 +$ 0$ 4$ & $ 6$ 0/$ $*6,- 7$ 0$ A$ 0 $ QUESTION 2 RESPONSE +$ 001BA4605$!$C!"4**+4D!7 4$ 9&515$ $ 6$ 9/"1(A***& $ 7$ 91 !7BA460!"4**+4$ $*7,- 0$ ($ " 3$ A$ 0%"1 See Appendix B@490$ @7BE,-+* $ QUESTION 3 0 /&23. '"3"44*++ /$= #( $ QUESTION 3 RESPONSE !7BA4605$!$C! "4**+4/$ &9A7+423.' )F3$ 9#3Appendix C# 9A4*+3 6** $ $*A,- See Appendix C@69# 3 QUESTION 4 0$ QUESTION 4 RESPONSE 50% 59% $*B,- 5%:9% Appendix D15@7 QUESTION 5 G / 02 .'$ QUESTION 5 RESPONSE 5$5)$ $*E,- Appendix E:5@A QUESTION 6 0902$ H9?3H+1 '1/ ( (. .$ QUESTION 6 RESPONSE H9?3H+3H90%59H # ) $ Sufficient in Size $*,,- $ Sufficient Power Allocation Sufficient Air Exchange and Air Flow Lighting $*-,- Interior Layout Sufficient to Handle All Stages of Bulk Processing The various chambers in the facility include: $+*,- $++,- QUESTION 6 (continued) 0902$ H9?3H41& (&. $ QUESTION 6 RESPONSE (continued) H9?3H43H90%59H $+4,- $+6,- $+7,- $+A,- See Appendix F090 020 QUESTION 7 0#090I "2 3'$ H9?3H+1 & ( & &$ QUESTION 7 RESPONSE $ / . ( $) $ H9?3H+3H90%59H Staffing Plan $+B,- $+E,- $+,,- $+-,- J $4*,- J $4+,- $44,- K0Appendix H$L J $46,- J QUESTION 7 (continued) 0902$ H9?3H41 "#'$ #. '$ QUESTION 7 RESPONSE (continued) $47,- H9?3H43H90%59H %Appendix G# &944" 3$ % $4A,- $4B,- $4E,- $4,,- See Appendix G0M 0%K9"" "2"L QUESTION 8 0#90$ QUESTION 8 RESPONSE $4-,- 90 ($ $ See Appendix H90C%52 "H5 $6*,- QUESTION 9 0#0$ H9?3H+1 '$ QUESTION 9 RESPONSE H9?3H+3H90%59H $6+,- $64,- $66,- Appendix I:5@-$ QUESTION 9 (continued) 0#0$ H9?3H41. '$ $ QUESTION 9 RESPONSE (continued) $67,- H9?3H43H90%59H $ $6A,- $6B,- $6E,- $6,,- $6-,- $7*,- $ $7+,- ) Appendix I:5@-$ QUESTION 9 (continued) 0#0$ $74,- H9?3H61 .& '' $ QUESTION 9 RESPONSE (continued) H9?3H63H90%59H $76,- $77,- J $7A,- J Appendix I:5@-$ QUESTION 9 (continued) 0#0$ H9?3H710 ' $ QUESTION 9 RESPONSE (continued) H9?3H73H90%59H $7B,- $7E,- $7,,- Appendix I:5@-$ QUESTION 10 0#090$ QUESTION 10 RESPONSE H9?3H+3H90%59H $7-,- $A*,- .$ $A+,- $A4,- $A6,- $A7,- QUESTION 10 (continued) 0#090$ H9?3H41' '$ QUESTION 10 RESPONSE (continued) H9?3H43H90%59H ))) 1 J $AA,- $AB,- $AE,- &C& $A,,- $A-,- Appendix J:5@+* QUESTION 11 0#<0.09 %$ H9?3H+1 )$ & ) .'$ QUESTION 11 RESPONSE H9?3H+3H90%59H See Appendix K <0 QUESTION 11 (continued) 0#<0.09 %$ H9?3H41 (N ($ $B*,- QUESTION 11 RESPONSE (continued) H9?3H43H90%59H #<0Appendix K$ See Appendix K<0$ QUESTION 11 (continued) 0#<0.09 %$ H9?3H61) $ QUESTION 11 RESPONSE (continued) H9?3H63H90%59H See Appendix K <0 QUESTION 12 (BONUS) 0#H0$ $B+,- H9?3H+1/ '$ QUESTION 12 RESPONSE / '" $ H9?3H+3H90%59H $B4,- $B6,- )( $B7,- J J $BA,- QUESTION 12 (BONUS) (continued) 0#H0$ $BB,- H9?3H411K+LDK4L DK6L(DK7L) N.$ QUESTION 12 RESPONSE (continued) H9?3H43H90%59H $BE,- M $B,,- $B-,- $E*,- $E+,- Appendix L15@+4 QUESTION 13 0/"3 #F $ $E4,- QUESTION 13 RESPONSE See Appendix M" 3#F QUESTION 14 0 $$ QUESTION 14 RESPONSE #% 1 $E6,- $E7,- $ $EA,- $ $EB,- $EE,- J $E,,- $ $E-,- $,*,- J Appendix N:5@+7$ QUESTION 15 0&$ $,+,- QUESTION 15 RESPONSE Appendix O15@+A$2 Appendix K. QUESTION 16 0/. 2 $ QUESTION 16 RESPONSE See Appendix P95/ . 2 SUPPLEMENTAL INFORMATION $,4,- $,6,- 090K@,L$ 090K@,L$ $,7,- 0090K@EL$ 090K@,L$ 00K@-L$ $,A,- $,B,- $,E,- $,,,- J $,-,- APPENDIX A This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX B APPENDIX C APPENDIX D This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX E This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX F Floor Plan APPENDIX G Apelles LLC Cultivation Center Policies & Procedures Manual Apelles Cultivation P&P Manual p. 1 of 91 © 2013 Apelles LLC. All rights reserved. Table of Contents Introduction .......................................................................................................... 7 Apelles Cultivation Operations Documentation .................................................................................................. 7 Medical Marijuana Law & History ..................................................................... 8 Federal Law .......................................................................................................................................................... 8 History of the Medical Marijuana Industry .......................................................................................................... 9 Medical Marijuana in Washington, DC ............................................................................................................... 9 Industry Impact ................................................................................................................................................. 10 Continued Progress ........................................................................................................................................... 10 Increasing Economic Impact ............................................................................................................................ 11 Federal Policies & Industry Growth ................................................................................................................ 12 Washington, DC Medical Marijuana Market .................................................. 13 Washington, DC Market Overview ................................................................................................................. 13 Medical Marijuana Market Difficult To Assess .............................................................................................. 13 Market Build ..................................................................................................................................................... 14 The Market Poses Barriers To Patients ............................................................................................................ 14 Market Segmentation / Customer Profile ........................................................................................................ 14 Company Information ........................................................................................ 16 Company Overview .......................................................................................................................................... 16 Mission Statement ............................................................................................................................................ 16 Core Values ....................................................................................................................................................... 17 Keys to Success ................................................................................................................................................ 17 Apelles LLC Product Line ............................................................................................................................... 18 Cultivation Overview ........................................................................................................................................ 18 Organization ...................................................................................................................................................... 21 Management and Oversight ................................................................................................................ 21 Security ................................................................................................................................................ 22 Cultivation ............................................................................................................................................ 22 Manufacturing ...................................................................................................................................... 23 Facility Information ........................................................................................................................................... 25 Facility Overview ................................................................................................................................ 25 Hours of Operation .............................................................................................................................. 26 Visitor Policy .................................................................................. 26 Confidentiality ..................................................................................................................................... 26 Product Safety ..................................................................................................... 28 “Highly Susceptible Population” ..................................................................................................................... 28 Apelles Cultivation P&P Manual p. 2 of 91 © 2013 Apelles LLC. All rights reserved. Food Safety ....................................................................................................................................................... 28 D.C. Food Code ................................................................................................................................................ 28 Person in Charge (PIC) and Certified Food Protection Manager ................................................................... 29 General Cleanliness & Sanitation Policy ......................................................................................................... 29 Hand Washing ................................................................................................................................................... 30 Hygiene .............................................................................................................................................................. 31 Environmental Plan ...........................................................................................33 Overview ........................................................................................................................................................... 33 Sustainable Action Plan .................................................................................................................................... 33 Incorporating Sustainable Design Principles ................................................................................................... 34 Sustainable Purchasing ..................................................................................................................................... 34 Minimizing Resources and Waste ................................................................................................................... 35 Use of Alternative Energy ................................................................................................................................ 36 Treatment of Wastewater and Runoff .............................................................................................................. 38 Plans for Scrubbing or Treatment of Exchanged Air ...................................................................................... 39 Minimizing Carbon Emissions and Promoting Responsible Transportation Practices ................................. 40 Human Resources ...............................................................................................41 Employee Registration ID Cards ..................................................................................................................... 41 Applying For A Registration ID Card ................................................................................................ 41 Registration ID Card Policy ................................................................................................................ 42 Changing Information On A Registration ID Card ........................................................................... 42 Lost Registration ID Card Policy ........................................................................................................ 42 Revocation Of Registration ID Cards ................................................................................................ 43 Staffing Plan ...................................................................................................................................................... 43 Recruitment & Hiring ....................................................................................................................................... 44 Maintaining Security In Hiring .......................................................................................................... 44 Employee Candidate Profile ............................................................................................................... 44 Employee Handbook ......................................................................................................................................... 44 Training Overview ............................................................................................................................................ 45 Training Program Design ................................................................................................................................. 46 Leader’s Guides ................................................................................................................................... 46 Trainee Workbook .............................................................................................................................. 47 Operations Tools ................................................................................................................................. 47 Job Aids ............................................................................................................................................... 47 Training Curriculum Overview ........................................................................................................................ 48 .......................................................................................................... 57 Apelles Cultivation P&P Manual p. 3 of 91 © 2013 Apelles LLC. All rights reserved. Performance Management ............................................................................................................................... 58 ................................................................................................................... 58 ................................................................................................................ 58 Determining A Deficiency Cause ....................................................................................................... 59 Qualities Of An Effective Coach/Counselor ...................................................................................... 59 The Counseling Process ...................................................................................................................... 60 Process Of Progressive Discipline ..................................................................................................... 61 Progressive Disciplinary Process Example ........................................................................................ 61 Verbal Counseling & Final Warnings ................................................................................................ 62 Warning Notices .................................................................................................................................. 62 Tips For Successful Performance Management ................................................................................ 63 Termination .......................................................................................................................................... 64 Counseling Report (Sample Form) .................................................................................................... 65 Disciplinary Warning Notice (Sample Form) .................................................................................... 66 Disciplinary Warning Memo (Sample Form) .................................................................................... 67 Required Department of Health Reporting ...................................................68 Reporting Marijuana Theft & Destroying and Disposing of Marijuana ...69 Process for Reporting Theft of Marijuana and Products ................................................................................ 69 Process for Destruction & Disposal of Unused Marijuana and Products ...................................................... 70 Closure Plan .........................................................................................................72 Introduction ....................................................................................................................................................... 72 Process for Shutting Down of Facility for Registration Renewal Denial, License Revocation or Closure of Business ............................................................................................................................................................. 72 Process for Shutting Down Apelles LLC Facility in the Event of a Fire or Natural Disaster ...................... 73 Warning Of Impending Disaster ........................................................................................................ 73 After The Event ................................................................................................................................... 74 Process for Shutting Down Apelles LLC Facility for Closure of Business ................................................... 74 Temporary Surrender of Registration .............................................................................................................. 75 What Happens Next? .......................................................................................................................... 76 Suspension or Revocation of Registration by Chief of Police ....................................................................... 76 Upon Receipt Of Notice ..................................................................................................................... 76 Closure Procedures ............................................................................................................................. 77 What Happens Next? .......................................................................................................................... 77 Marketing and Sales ...........................................................................................79 Branding and Positioning ................................................................................................................................. 79 Competition ....................................................................................................................................................... 79 Pricing Strategy ................................................................................................................................................. 79 Marketing Objectives ........................................................................................................................................ 80 Marketing / Promotional Strategy .................................................................................................................... 80 Apelles Cultivation P&P Manual p. 4 of 91 © 2013 Apelles LLC. All rights reserved. Accounting ........................................................................................................... 82 Accounts Payable And Cash Disbursements ................................................................................................... 82 Documenting Accounts Payable ........................................................................................................ 82 Recording ............................................................................................................................................. 83 Payment Of Accounts Payable ........................................................................................................... 83 Manual Checks And COD Payments ................................................................................................. 83 Bad/NSF Checks ............................................................................................................................................... 84 Returned Checks ................................................................................................................................. 84 Re-Deposited Checks ........................................................................................................................... 84 Bank Account Reconciliations ......................................................................................................................... 85 Format .................................................................................................................................................. 85 Preparation And Reconciling Items ................................................................................................... 85 Adjustments And Journal Entries ....................................................................................................... 86 Cash Drawers .................................................................................................................................................... 86 Opening ................................................................................................................................................ 86 Closing ................................................................................................................................................. 86 Cash Receipts .................................................................................................................................................... 87 Receiving ............................................................................................................................................. 87 Application ........................................................................................................................................... 87 Deposit ................................................................................................................................................. 87 Check Requests ................................................................................................................................................. 88 Origination ........................................................................................................................................... 88 Processing ............................................................................................................................................ 88 Check Signing Authority .................................................................................................................................. 88 Authorized Check Signers .................................................................................................................. 88 Signature Levels Required .................................................................................................................. 89 Chart Of Accounts ............................................................................................................................................ 89 Design Of Accounts ............................................................................................................................ 89 Description And Definition Of Accounts .......................................................................................... 90 Apelles Cultivation P&P Manual p. 5 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 6 of 91 © 2013 Apelles LLC. All rights reserved. Introduction Apelles Cultivation Operations Documentation At Apelles Cultivation, rather than having one comprehensive yet unwieldy Operations Manual, each core department (Security, Cultivation, Manufacturing, Facilities) is equipped with a separate Operations Manual that is designed as a one-stop collection of all policies and procedures related to that department’s operations. Having individual department manuals allows staff members to more easily reference operational documentation on an ongoing basis, as well as utilize the manual during the training process. The Security department has an additional Security Management Operations Manual with restricted access for the Security Department Manager and members of upper management only. This is the only core department that has a separate location for department-specific operations documentation. In addition to the individual department Operations Manuals, there is also the Cultivation Center Policy & Procedure (P&P) Manual that lives in the General Manager’s office. It details all company and management level operations, as well as operations documentation for ancillary departments such as Human Resources, Accounting, and Sales & Marketing. Refer to the Apelles Cultivation Operations Reference Set schematic in the Appendix for a one-page view of all operational documentation that resides in the cultivation center. Apelles Cultivation Operations materials are considered confidential company property and may not be taken off the premises by staff members. Apelles Cultivation P&P Manual p. 7 of 91 © 2013 Apelles LLC. All rights reserved. Medical Marijuana Law & History Federal Law (The following text comes from the NORML website.) Possession, cultivation, or distribution of marijuana for any purpose is strictly illegal under federal law. Marijuana is currently classified as a Schedule I substance under the 1970 Controlled Substances Act, meaning that it meets all three of the following criteria: • The drug or substance has a high potential for abuse. • The drug or other substance has no currently accepted medical use in treatment in the United State. • There is a lack of accepted safety for use of the drug or other substance under medical supervision. Currently, only four people in the United States are authorized to possess marijuana. All are participants in the federal government's Compassionate Investigative New Drug (IND) program and are sent 300 prerolled marijuana cigarettes every month by the National Institute on Drug Abuse, ostensibly as part of a research program (although no research has ever been conducted on the participants). This program was closed in the early 1990's by President George H. Bush, but existing patients were grandfathered in. The four current participants are the only ones still alive. The only other people authorized to possess marijuana under federal law are those who have had research studies approved by the National Institute on Drug Abuse (NIDA). Even then, the only legal source of marijuana for these studies is produced by NIDA at a research farm at the University of Mississippi. Privately cultivated marijuana may not be used in research under federal law under any circumstances. NORML has detailed information regarding federal penalties on their website, which can be found here: http://norml.org/index.cfm?wtm_view=&Group_ID=4575. Highlights from the link are as follows: Possession of marijuana is punishable by up to one year in jail and a minimum fine of $1,000 for a first conviction. For a second conviction, the penalties increase to a 15-day mandatory minimum sentence with a maximum of two years in prison and a fine of up to $2,500. Subsequent convictions carry a 90-day mandatory minimum sentence and a maximum of up to three years in prison and a fine of up to $5,000. Distribution of a small amount of marijuana, for no remuneration, is treated as possession. Manufacture or distribution of less than 50 plants or 50 kilograms of marijuana is punishable by up to five years in prison and a fine of up to $250,000. For 50-99 plants or 50-99 kilograms the penalty increases to a possible 10 years in prison and a fine of up to $500,000. Manufacture or distribution of 100-999 plants or 100-999 kilograms carries a penalty of 5 - 40 years in prison and a fine of up to $2,000,000. For 1000 plants or 1000 kilograms or more, the penalty increases to 10 years - life in prison and a fine of up to $4,000,000. Apelles Cultivation P&P Manual p. 8 of 91 © 2013 Apelles LLC. All rights reserved. Distribution of greater than 5 grams of marijuana to a minor under the age of 21 doubles the possible penalties. Distribution within 1,000 feet of a school, playground, public housing or within 100 feet of a youth center, public pool or video arcade also doubles the possible penalties. The sale of paraphernalia is punishable by up to three years in prison. The sentence of death can be carried out on a defendant who has been found guilty of manufacturing, importing or distributing a controlled substance if the act was committed as part of a continuing criminal enterprise – but only if the defendant is (1) the principal administrator, organizer, or leader of the enterprise or is one of several such principal administrators, organizers, or leaders, and (2) the quantity of the controlled substance is 60,000 kilograms or more of a mixture or substance containing a detectable amount of marijuana, or 60,000 or more marijuana plants, or the if the enterprise received more than $20 million in gross receipts during any 12-month period of its existence. History of the Medical Marijuana Industry The legal medical marijuana industry began in California in 1996 when a referendum known as Proposition 215 was approved by 56% of California voters. Subsequently, the Compassionate Use Act of 1996 codified the rights of authorized patients to possess and cultivate the medicine under the California Health & Safety Code Sect. 11362.5. Since 1996, additional states have followed California’s lead, with medical marijuana use now legal in Alaska, Arizona, Colorado, Delaware, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington and the District of Columbia (DC). Medical Marijuana in Washington, DC The upcoming approval of medical marijuana dispensaries and cultivation facilities in Washington, DC has followed more than a decade of action on this issue. District voters first made their voices heard on the issue in 1998, when voter initiative eliminating penalties for possession of medical marijuana and regulating the distribution of medicine to sick patients was first placed on the ballot. After Congressional attempts to stop the vote from being counted were deemed unconstitutional, the initiative passed with 68% of the vote. Shortly after the passage of I-59, then Representative Bob Barr (R-GA) successfully introduced an amendment to the Consolidated and Emergency Supplemental Appropriations Act of 1999 (Washington DC’s annual appropriations bill in Congress), which effectively prevented the city from spending any resources to implement the new medical marijuana law. Thus, the law sat dormant until 2009 when Congress finally repealed the Barr Amendment, allowing the District to move forward with implementing the will of the voters, nearly a decade after the passage of the original initiative. This was followed in May 2010 when the Washington DC City Council unanimously approved Amendment Act B18-622, the “Legalization of Marijuana for Medical Treatment Act of 2010,” which revised the original initiative language and established rules and guidelines for the implementation of the new medical marijuana law. This legislation also tasked the mayor’s office with establishing rules by which dispensaries and cultivation facilities must operate in order to be in full compliance under District law. Apelles Cultivation P&P Manual p. 9 of 91 © 2013 Apelles LLC. All rights reserved. Industry Impact Despite its legal status, medical marijuana is not without significant opposition. Perhaps the biggest obstacle to industry growth is the federal government, where the Department of Health and Human Services has continued to maintain “marijuana has no currently accepted medical use in treatment in the United States.” This, along with the prior administration’s generally conservative stance on drugs and social issues, helps explain why the Drug Enforcement Administration (DEA) conducted frequent raids on medical marijuana dispensaries through most of the 2000’s —even in states where the operations are expressly legal. There is still suspicion by a significant portion of the population that views medical marijuana as a thinly veiled excuse for people to acquire a recreational drug under the guise of medical need. Combined, these factors have dampened the normal process of growth and cohesion that typically occurs in emerging industries. Until the formation of the National Cannabis Industry Association in 2010, there were no trade associations for licensed medical marijuana dispensaries or cultivation facilities. This leaves the industry void of a force for self-regulation, promotion of best practices and unified voice for political action. The National Organization for the Reform of Marijuana Laws (NORML), The Marijuana Policy Project (MPP) and Americans for Safe Access (ASA) all address general issues related to marijuana and medical marijuana use. However, no organization has focused specifically on the business of running a dispensary. The formation of the NCIA is a step in the right direction, but the organization is still brand new and lacks significant funding. Continued Progress Despite opposition and the challenges that dispensaries face, medical marijuana use appears to be here to stay. Growth factors include support among the general population and gradual acceptance in the medical community. Support for medical marijuana has grown among the general population since the passage of the first ballot initiatives in 1996, with a January 2010 ABC News/Washington Post poll finding 81% of Americans support legalizing marijuana for medical use. The medical community has been slow to embrace marijuana as a medicine, but it appears to be just a matter of time. There is a considerable body of evidence that medical marijuana is as good—if not better— for treating certain conditions than many chemically produced medications. NORML statistics show that marijuana is used to treat a range of conditions from chronic to acute and terminal. • 40% chronic pain • 22% AIDS-related • 15% mood disorders • 23% all other categories Specific conditions for which medical marijuana is currently used as a treatment include: • AIDS (HIV) & AIDS Wasting Apelles Cultivation P&P Manual p. 10 of 91 © 2013 Apelles LLC. All rights reserved. • Alzheimer’s Disease • Appetite / Nausea • Arthritis • Asthma / Breathing Disorders • Chemotherapy • Crohn’s / Gastrointestinal Disorders • Epilepsy / Seizures • Glaucoma • Hepatitis C • Migraines • Multiple Sclerosis / Muscle Spasms • Pain / Analgesia • Psychological Conditions • Tourette’s Syndrome • Terminally Ill According to ASA, more than 6,500 reports and journal articles from around the world support the medical value of marijuana. Hundreds of scholarly studies have demonstrated marijuana’ ability to reduce pain, fight nausea, improve appetite and ease other symptoms—with virtually no harmful side effects. In contrast, many of the standard pharmaceuticals currently used to treat these conditions pose unpleasant or potentially harmful side effects. After careful scrutiny and substantial consideration of the evidence over decades, dozens of public health organizations have endorsed medical marijuana use. The list is impressive. Supporters include the National Association of People Living With AIDS, AIDS Action Council, American Public Health Association, American Academy of Family Physicians, American Nurses Association, Federation of American Scientists, Kaiser Permanente, New England Journal of Medicine, National Association for Public Health Policy, California Medical Association, Whitman-Walker Clinic, Lymphoma Foundation of America, and many more. Increasing Economic Impact Apelles Cultivation P&P Manual p. 11 of 91 © 2013 Apelles LLC. All rights reserved. A first ever market research report released by the business strategy firm See Change in March 2013, estimated that $1.7 billion of medical marijuana will be sold through dispensaries in 2013. This figure does not take into account medical marijuana that is being grown and exchanged between individual patients and caregivers, only retail and wholesale sales. The retail market rivals national sales of Viagra, which grosses $1.9 billion annually. This study also did not take into account the ancillary businesses that have sprung up around the legal medical marijuana industry, including cultivation suppliers, point of sale system providers, credit card processing companies, and consulting firms. The resulting contribution to tax rolls is significant. According to NORML, the California’s medical marijuana patients alone are currently consuming somewhere between $870 million and $2 billion worth of medicinal product each year. That translates to somewhere between $70 million and $120 million in state sales tax revenues. At the local level, meanwhile, municipalities are enjoying the boost in tax revenues from medical marijuana. Federal Policies & Industry Growth DEA raids on medical marijuana dispensaries have mostly waned since President Barack Obama took office. Obama repeatedly stated during his campaign that he would take steps to end the practice, effectively eliminating the competing position between federal and state laws. In October 2009, Attorney General Eric Holder reinforced that commitment as he directed federal prosecutors to stop pursuing cases against medical marijuana patients who were otherwise lawful under state law. Those guidelines were contained in a memo from Deputy Attorney General David Ogden that was sent to United States attorneys. In July 2013, Deputy US Attorney James Cole issued a new Justice Department memo to United States attorneys stating that while state law is no defense for a violation of federal law, the administration’s position on the use of scarce federal prosecutorial resources has not changed. With a more relaxed legal climate in place, it is likely that the medical marijuana industry will experience a surge in growth. Some or all of the following trends are expected to occur: • The climate of fear that the DEA raids has caused will abate, increasing patients’ comfort level in visiting dispensaries. • More patients will feel comfortable seeking physicians’ recommendations for medical marijuana use, and physicians will feel more comfortable giving them. • New dispensaries will open as demand increases due to the more tolerant climate. • Existing dispensaries will see an increase in business. • Additional localities will address medical marijuana as federal tolerance improves and pressure increases to find new sources of tax revenues in a challenging economy. • Some dispensaries will become industry leaders and seek industry dominance as they improve operating efficiency and open additional centers. Apelles Cultivation P&P Manual p. 12 of 91 © 2013 Apelles LLC. All rights reserved. Washington, DC Medical Marijuana Market Washington, DC Market Overview The medical marijuana industry is still in its infancy and is relatively undeveloped compared to most industries. The market is characterized by local culture, with dispensaries taking form based on the social climate of the communities in which they are located. Medical Marijuana Market Difficult To Assess Quantifying the market (the number of patients and/or potential revenue) is difficult to quantify because: • There is no source of comprehensive information about medical marijuana industry operations and data. • The stigma associated with marijuana use, along with the threat of possible legal difficulties, has forced many patients to “fly under the radar.” Therefore, user data that might be openly published and accessible in other types of markets is not available. • Data gathering is further impacted by HIPAA laws that specify strict handling of patient information for privacy reasons. • Arizona’s regulations have yet to be implemented, so making accurate predictions of patient numbers is nearly impossible. Apelles Cultivation P&P Manual p. 13 of 91 © 2013 Apelles LLC. All rights reserved. The Market Poses Barriers To Patients Even when a patient is open to using marijuana medically, he or she faces additional obstacles compared to patients who use more traditional pharmaceuticals. For example, a patient must request a letter from his or her physician approving them for medical marijuana use. Patients whose physician does not understand the benefits of medical marijuana must jump through additional hoops. In California and Colorado, this has typically this involved visiting a special medical marijuana certification clinic to obtain a physician’s letter and, only then, after a special evaluation and $150 fee. Such medical marijuana evaluation centers are not anticipated in Washington, DC under the current regulations. Market Segmentation / Customer Profile Apelles Cultivation P&P Manual p. 14 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 15 of 91 © 2013 Apelles LLC. All rights reserved. Company Information Company Overview The single over-arching objective of Apelles Cultivation is to build, operate and grow its cultivation center to become the best example possible of how marijuana can be produced safely and economically under the Act, an example that the government and the people of the District of Columbia demand, deserve and can be proud of. Mission Statement Apelles Cultivation Center is dedicated to providing the citizens of the District of Columbia with: • • Apelles Cultivation P&P Manual p. 16 of 91 © 2013 Apelles LLC. All rights reserved. • Core Values Apelles Cultivation believes in: • Keys to Success Important keys to our success include: • Apelles Cultivation P&P Manual p. 17 of 91 © 2013 Apelles LLC. All rights reserved. Apelles LLC Product Line Cultivation Overview Apelles Cultivation P&P Manual p. 18 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 19 of 91 © 2013 Apelles LLC. All rights reserved. . Apelles Cultivation P&P Manual p. 21 of 91 © 2013 Apelles LLC. All rights reserved. s Apelles Cultivation P&P Manual p. 22 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 23 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 24 of 91 © 2013 Apelles LLC. All rights reserved. Facility Information Facility Overview Apelles Cultivation P&P Manual p. 25 of 91 © 2013 Apelles LLC. All rights reserved. Hours of Operation While the Apelles LLC facility will be operated by staff 24 hours each day so as to insure quality and safety protocols, the facility’s hours of operation for employees who are not directly involved in cultivation will be Monday through Friday from 9:00 a.m. to 6:00 p.m. Only registered directors, officers, members, incorporators, agents, managers, employees, and government or law enforcement officials will be permitted on the registered premises. All medical marijuana located on the premises will be kept in separate, secured areas of the facility. Visitor Policy • Confidentiality Apelles Cultivation P&P Manual p. 26 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 27 of 91 © 2013 Apelles LLC. All rights reserved. Product Safety “Highly Susceptible Population” Food Safety D.C. Food Code In 2003, the Department of Health, which is responsible for overseeing food safety in the District of Columbia, completed a major revision of its food safety regulations. These new regulations incorporated the 1999 federal Food Code, with amendments specific to the District of Columbia. The Department-issued User-Friendly Version of the District of Columbia Food Code has been included as an Addendum to this Operations Manual. It is to be used as an essential companion to this facility’s operations policies and procedures. The Food Code covers regulations regarding: • Management and personnel • Food (receiving, storage, preventing contamination, etc.) • Equipment, utensils, and linens • Water, plumbing, and waste • Physical facilities • Poisonous or toxic materials Apelles Cultivation P&P Manual p. 28 of 91 © 2013 Apelles LLC. All rights reserved. • Special requirements • Compliance, enforcement, and definitions • Inspectional Guide Person in Charge (PIC) and Certified Food Protection Manager . General Cleanliness & Sanitation Policy Apelles Cultivation P&P Manual p. 29 of 91 © 2013 Apelles LLC. All rights reserved. Human Resources Employee Registration ID Cards The District requires that all employees register with the Department and receive a non-transferrable Registration Identification Card. All employees and agents of the cultivation center are required to wear this card as a badge on their person at all times when working at the cultivation center. It is a violation of District law to enter restricted access areas within the center without wearing your badge. Applying For A Registration ID Card The Human Resources Manager or General Manager will assist employees with completing the Registration ID Card application process and Apelles Cultivation will pay the required fees. A renewal application will need to be completed and submitted 45 days prior to card expiration dates. The HR Manager must notify employees at the appropriate time. Failure to provide complete and accurate application information, or failure to qualify or to maintain a valid Registration ID Card, is cause for discipline, including but not limited to suspension and/or discharge. Employees will not be permitted to work without a valid Registration ID Card. The application for an employee registration will include: • Written statements and evidence establishing to the satisfaction of the Department that you as the applicant meet all of the registration requirements which are detailed in sections 5604 of Title 22, Subtitle C (D.C. Medical Marijuana Rules); and, • A copy of your “Medical Marijuana Training and Education Certificate.” You will receive this certificate after successfully completing the “Medical Marijuana Training & Education Program” that will be conducted by a trainer who has been authorized and permitted by the Department. For Manager candidates, in addition to the employee requirements above, you will also be required to submit a notarized written statement that you have read the “Legalization of Marijuana for Medical Treatment Amendment Act of 2010” and Title 22 of District of Columbia Municipal Regulations (DCMR) and have knowledge of District and federal law relating to marijuana. No employee, manager, or agent of the cultivation center who has access to the medical marijuana at the cultivation center can have a felony conviction or a misdemeanor conviction for a drug-related offense. You are required to undergo a criminal background check conducted by the Metropolitan Police Department prior to registration. This cultivation center will pay the fee for the criminal background check. If once you are registered you receive a conviction as defined above, you must immediately notify the Department and your employment will need to be terminated. Apelles Cultivation P&P Manual p. 41 of 91 © 2013 Apelles LLC. All rights reserved. Registration ID Card Policy Since an employee may not work without their Registration ID Card, this center’s policy regarding Registration ID Cards is as follows: • Changing Information On A Registration ID Card If your name or address changes, the changes must be submitted the Department within 10 working days after the change takes place. Immediately inform Human Resources or your General Manager of any changes. They will submit the application for your updated Registration ID Card. Contact Human Resources or your General Manager for any associated change fees. Lost Registration ID Card Policy If, while in your possession, you lose or misplace your Registration ID Card, immediately notify Human Resources or your General Manager. • Human Resources or the General Manager will immediately contact the Department and request a replacement card. • You may not access the cultivation center or work until the new card has been received. Replacement cards can take up to 5 days to be issued by the Department. • You may be fined up to $100 for the disruption to the workplace caused by your inability to work due to a lost Registration ID card. • The replacement fee as designated by the Department will be deducted from your paycheck. Check the Department website for up to date information or check with your HR Manager or GM. Apelles Cultivation P&P Manual p. 42 of 91 © 2013 Apelles LLC. All rights reserved. Revocation Of Registration ID Cards The Department of Health Services will revoke an employee’s Registration ID Card if during the active registration period the employee: • Willfully violates any provision specifically contained in the Department published rules and regulations relating to medical marijuana. • Uses medical marijuana without having a qualifying patient Registration ID Card. • Uses medical marijuana on the premises. • Diverts, attempts to divert, or aids in the diversion of medical marijuana to anyone not authorized by the Department to possess medical marijuana. • Has been convicted of a felony offense or any drug-related offense. • Has provided false or misleading information on their application. All of the above are grounds for immediate dismissal and may result in the Department imposing civil fines and sanctions. Staffing Plan Apelles Cultivation has a comprehensive staffing plan in place to guide recruiting, hiring, training and managing our employees. Apelles Cultivation P&P Manual p. 43 of 91 © 2013 Apelles LLC. All rights reserved. Recruitment & Hiring Maintaining Security In Hiring Employee Candidate Profile Employee Handbook Apelles Cultivation P&P Manual p. 44 of 91 © 2013 Apelles LLC. All rights reserved. Training Overview Apelles Cultivation P&P Manual p. 45 of 91 © 2013 Apelles LLC. All rights reserved. Training Program Design Apelles Cultivation P&P Manual p. 46 of 91 © 2013 Apelles LLC. All rights reserved. Trainee Workbook • Operations Tools • Job Aids Apelles Cultivation P&P Manual p. 47 of 91 © 2013 Apelles LLC. All rights reserved. Training Curriculum Overview Medical Marijuana And The Law Apelles Cultivation P&P Manual p. 48 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 49 of 91 © 2013 Apelles LLC. All rights reserved. Performance Management Apelles Cultivation P&P Manual p. 58 of 91 © 2013 Apelles LLC. All rights reserved. Verbal Counseling & Final Warnings Warning Notices Apelles Cultivation P&P Manual p. 62 of 91 © 2013 Apelles LLC. All rights reserved. Counseling Report (Sample Form) Apelles Cultivation P&P Manual p. 65 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 66 of 91 © 2013 Apelles LLC. All rights reserved. Apelles Cultivation P&P Manual p. 67 of 91 © 2013 Apelles LLC. All rights reserved. Required Department of Health Reporting Apelles Cultivation must and will submit to the Department of Health on or before the 30th of July and January a statement showing the following information: • The quantity of each medical marijuana product manufactured by the cultivation center during the preceding six (6) months; • The quantity of each medical marijuana product sold by the cultivation center during the preceding six (6) months; • The amount of medical marijuana destroyed or disposed of during the preceding six (6) months; • Certification from MPD that medical marijuana that was cultivated was relinquished for destruction or disposal; • The cultivation center’s total expenditures for manufacturing medical marijuana during the preceding six (6) months; • The cultivation center’s total amount of sales of medical marijuana during the preceding six (6) months; • The cultivation center’s gross revenue based upon its medical marijuana sales during the preceding six (6) months; • The amount of sales tax reported by the cultivation center to Office of Tax and Revenue (OTR) during the preceding six (6) months; • The quantity of medical marijuana still available for sale at the cultivation center to a dispensary on the date the report is filed with the Mayor; • The name, address, home telephone number, and date of birth of each current employee; and • An affidavit executed by an individual registrant, partner of an applicant partnership, or the appropriate officer of an applicant corporation, attesting to the truth of the submitted report. Apelles Cultivation Center makes all of the books and records referred to above available for inspection by the Department or its designated agent and the OTR, during the cultivation center’s hours of operation. These books and records will be maintained for a period of 4 years after the last transaction recorded in the books and records. Apelles Cultivation P&P Manual p. 68 of 91 © 2013 Apelles LLC. All rights reserved. Reporting Marijuana Theft & Destroying and Disposing of Marijuana Process for Reporting Theft of Marijuana and Products Apelles Cultivation P&P Manual p. 69 of 91 © 2013 Apelles LLC. All rights reserved. Process for Destruction & Disposal of Unused Marijuana and Products – – • Apelles Cultivation P&P Manual p. 71 of 91 © 2013 Apelles LLC. All Rights Reserved. Closure Plan Introduction ce Process for Shutting Down of Facility for Registration Renewal Denial, License Revocation or Closure of Business . – Apelles Cultivation P&P Manual p. 72 of 91 © 2013 Apelles LLC. All Rights Reserved. – Process for Shutting Down Apelles LLC Facility in the Event of a Fire or Natural Disaster Apelles Cultivation P&P Manual p. 73 of 91 © 2013 Apelles LLC. All Rights Reserved. Process for Shutting Down Apelles LLC Facility for Closure of Business Apelles Cultivation P&P Manual p. 74 of 91 © 2013 Apelles LLC. All Rights Reserved. Temporary Surrender of Registration • Apelles Cultivation P&P Manual p. 75 of 91 © 2013 Apelles LLC. All Rights Reserved. What Happens Next? Suspension or Revocation of Registration by Chief of Police Upon Receipt Of Notice Apelles Cultivation P&P Manual p. 76 of 91 © 2013 Apelles LLC. All Rights Reserved. Closure Procedures 1. What Happens Next? Apelles Cultivation P&P Manual p. 77 of 91 © 2013 Apelles LLC. All Rights Reserved. Apelles Cultivation P&P Manual p. 78 of 91 © 2013 Apelles LLC. All Rights Reserved. Accounting Accounts Payable And Cash Disbursements Documenting Accounts Payable -up and resolved prior to commencing with the voucher process. • Apelles Cultivation P&P Manual p. 82 of 91 © 2013 Apelles LLC. All Rights Reserved. Recording • Payment Of Accounts Payable • Manual Checks And COD Payments • Apelles Cultivation P&P Manual p. 83 of 91 © 2013 Apelles LLC. All Rights Reserved. Check Requests Check Signing Authority Apelles Cultivation P&P Manual p. 88 of 91 © 2013 Apelles LLC. All Rights Reserved. • Signature Levels Required • Chart Of Accounts Apelles Cultivation P&P Manual p. 89 of 91 © 2013 Apelles LLC. All Rights Reserved. • Description And Definition Of Accounts • Apelles Cultivation P&P Manual p. 90 of 91 © 2013 Apelles LLC. All Rights Reserved. Apelles Cultivation P&P Manual p. 91 of 91 © 2013 Apelles LLC. All Rights Reserved. APPENDIX G Apelles LLC Cultivation Center Security Department Operations Manual Table of Contents Introduction ............................................................................................................ 7 Apelles LLC Operations Documentation ............................................................................................................. 7 Security Department Operations Manual ............................................................................................................. 7 Company Information ............................................................................................ 9 Company Overview .............................................................................................................................................. 9 Mission Statement ................................................................................................................................................ 9 Core Values ....................................................................................................................................................... 10 Keys to Success ................................................................................................................................................ 10 Security Overview ............................................................................................................................................ 11 Facility Design .................................................................................................................................................. 11 Security Department Overview ........................................................................... 13 Security Department Staff ................................................................................................................................ 13 General Manager/Senior Horticulturist (Director of Compliance) ................................................... 13 Security Manager ................................................................................................................................ 14 Security Guard ..................................................................................................................................... 14 Safety & Security Training .............................................................................................................................. 15 Employee Registration ID Cards ..................................................................................................................... 15 Registration ID Card Policy ............................................................................................................... 15 Revocation of Registration ID Cards ................................................................................................. 16 Radio Protocol .................................................................................................................................................. 16 Radio Overview & Operation ............................................................................................................. 16 Designated Radio Channels ................................................................................................................ 16 Radio Protocol ..................................................................................................................................... 17 Prohibited Over Radios ....................................................................................................................... 18 .......................................................................................................... 19 Staff Escorts ...................................................................................................................................................... 20 Recordkeeping ................................................................................................................................................... 20 Preventing Diversion ........................................................................................................................................ 21 Daily Closing Procedures ................................................................................................................................. 22 Security System Features ..................................................................................... 23 Alarm System .................................................................................................................................................... 23 ....................................................................................................................................... 24 ................................................................................................................................ 25 Lighting ............................................................................................................................................................. 25 Closed-Circuit Video Surveillance (CCTV) .................................................................................................... 25 Camera Information ............................................................................................................................ 25 Apelles LLC Security Dept. Ops Manual p. 2 of 73 © 2013 Apelles LLC. All Rights Reserved. Exterior/Low-Light Cameras .............................................................................................................. 27 Video Storage ...................................................................................................................................... 27 Video Recording ................................................................................................................................. 28 Video Monitoring ................................................................................................................................ 28 CCTV Equipment Maintenance ......................................................................................................... 28 Access Control System ..................................................................................................................................... 29 Overview .............................................................................................................................................. 29 Keypad Locations ................................................................................................................................ 29 Biometric Lock Locations .................................................................................................................. 30 Security Tours ....................................................................................................... 31 Prior to The Tour (All Tours) ........................................................................................................................... 31 Security Manager (or Security Supervisor On Duty) ........................................................................ 31 Security Guard ..................................................................................................................................... 31 During The Tour (All Tours) ........................................................................................................................... 32 Security Manager (or Security Supervisor On Duty) ........................................................................ 32 Security Guard ..................................................................................................................................... 32 All Tours: After The Tour ............................................................................................................................... 32 Security Manager (or Security Supervisor On Duty) ........................................................................ 32 Security Guard ..................................................................................................................................... 33 Additional Responsibilities (Regular Work Hours) ........................................................................................ 33 Security Guard: Building Lobby ........................................................................................................ 33 Floor Reception ................................................................................................................................... 33 Corporate Legal ................................................................................................................................... 33 Security Patrols ................................................................................................................................................. 34 Additional Responsibilities (After-Hours/Weekends) .................................................................................... 34 Security Manager (or Security Supervisor On Duty) ........................................................................ 34 Security Guard ..................................................................................................................................... 35 Deliveries ............................................................................................................... 36 Delivery Policies & D.C. Law Compliance .................................................................................................... 36 37 Dispensary Relationships ................................................................................................................................. 37 Company Policies Re: Dispensary Deliveries ................................................................................... 38 Processing & Preparation for Delivery ........................................................................................................... 38 Apelles LLC Security Dept. Ops Manual p. 3 of 73 © 2013 Apelles LLC. All Rights Reserved. Processing & Procedures for Delivery Driver ................................................................................................. 39 ...................................................................................................................... 41 Apelles LLC Delivery Driver Rules ................................................................................................................ 42 Rules for Safety ................................................................................................................................... 42 Delivery Rules for Professional Conduct & Product Quality Control ............................................. 43 Procedures If Stopped by MPD or Other Law Enforcement .......................................................................... 43 Procedures for Accident ................................................................................................................................... 43 What to Do if Attacked ..................................................................................................................................... 44 Conflict Prevention & Resolution ........................................................................ 45 Maintaining Personal Control .......................................................................................................................... 45 Ask, Don’t Tell ................................................................................................................................................. 46 Non-violent Communication ............................................................................................................................ 46 Conflict Resolution ........................................................................................................................................... 47 Incident Reports ................................................................................................... 48 Overview ........................................................................................................................................................... 48 Policy Statement ............................................................................................................................................... 48 Reasons For Reporting Incidents ..................................................................................................................... 48 Incident Report Classifications: What To Report ........................................................................................... 48 Condition Report Classifications ..................................................................................................................... 50 Reporting to the Metropolitan Police Department (MPD) ............................................................................. 51 External Reporting ............................................................................................................................................ 51 Reporting of Serialized Equipment Theft ........................................................................................................ 51 Completing the Incident Report ....................................................................................................................... 52 Basic Investigations .......................................................................................................................................... 52 Correcting the Hazard and Preventing Reoccurrence ..................................................................................... 52 Incident Summary Log ..................................................................................................................................... 53 Threats & Acts Of Violence ................................................................................... 54 Overview ........................................................................................................................................................... 54 Requirements ..................................................................................................................................................... 54 Threat-maker Control Strategies ...................................................................................................................... 55 On-Site Incidents ................................................................................................................................. 55 Off-Site Incidents ................................................................................................................................ 56 Threats Received From Outside the District of Columbia ................................................................ 56 Threat and Violence Preparation Checklist ..................................................................................................... 56 Pre-Threat Actions ............................................................................................................................................ 57 Planning and Organization ................................................................................................................. 57 Threat Verification & Assessment ................................................................................................................... 58 Nature of Incident ............................................................................................................................... 58 Apelles LLC Security Dept. Ops Manual p. 4 of 73 © 2013 Apelles LLC. All Rights Reserved. Victims & Witnesses ........................................................................................................................... 58 Person Making the Threat or Committing the Act ............................................................................ 58 Person Reporting ................................................................................................................................. 58 Other .................................................................................................................................................... 59 Threat Verification .............................................................................................................................. 59 Threat Assessment .............................................................................................................................. 59 Protective Strategies ......................................................................................................................................... 59 Threat-Maker Control & Containment Strategies ........................................................................................... 60 On-Site Incidents ................................................................................................................................. 60 Telephone Threats ............................................................................................................................... 60 Written Threats .................................................................................................................................... 61 Off-Site Incidents ................................................................................................................................ 61 Post-Threat Actions .......................................................................................................................................... 61 Review and Analysis ........................................................................................................................................ 61 Documentation and Reporting ......................................................................................................................... 62 Documentation ..................................................................................................................................... 62 Reporting .............................................................................................................................................. 62 After Action Report ............................................................................................................................ 62 Incident Report .................................................................................................................................... 63 General Standards ................................................................................................ 64 Powers of Arrest ............................................................................................................................................... 64 Investigation Conduct ....................................................................................................................................... 66 General ................................................................................................................................................. 66 Investigation Conduct ......................................................................................................................... 66 Interviews with Employees ................................................................................................................. 67 Workplace Search ............................................................................................................................... 67 Entrapment ........................................................................................................................................... 67 Informants and Undercover Operations ............................................................................................. 67 Anonymity ........................................................................................................................................... 67 Offer to Buy/Sell ................................................................................................................................. 67 Use of Other Business Units or Departments .................................................................................... 68 Case Resolution ................................................................................................................................... 68 Filing with Law Enforcement Agencies ............................................................................................ 68 Securing Evidence ............................................................................................................................... 68 Weapons Policy ................................................................................................................................................ 69 Emergency Procedures ........................................................................................ 71 Policy ................................................................................................................................................................. 71 Purpose .............................................................................................................................................................. 71 Structure ............................................................................................................................................................. 71 Emergency Notifications .................................................................................................................................. 71 Emergency Evacuation Plan ............................................................................................................................. 71 Apelles LLC Security Dept. Ops Manual p. 5 of 73 © 2013 Apelles LLC. All Rights Reserved. Medical Emergencies ....................................................................................................................................... 72 Fires ................................................................................................................................................................... 73 Fire Safety Procedures ........................................................................................................................ 73 Apelles LLC Security Dept. Ops Manual p. 6 of 73 © 2013 Apelles LLC. All Rights Reserved. Introduction Apelles LLC Operations Documentation Security Department Operations Manual Apelles LLC Security Dept. Ops Manual p. 7 of 73 © 2013 Apelles LLC. All Rights Reserved. – Apelles LLC Security Dept. Ops Manual p. 8 of 73 © 2013 Apelles LLC. All Rights Reserved. Company Information Company Overview Mission Statement • Apelles LLC Security Dept. Ops Manual p. 9 of 73 © 2013 Apelles LLC. All Rights Reserved. • Core Values Keys to Success Important keys to our success include: • Apelles LLC Security Dept. Ops Manual p. 10 of 73 © 2013 Apelles LLC. All Rights Reserved. Security Overview . Facility Design Apelles LLC Security Dept. Ops Manual p. 11 of 73 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Security Dept. Ops Manual p. 12 of 73 © 2013 Apelles LLC. All Rights Reserved. Security Department Overview Security Department Staff General Manager/Senior Horticulturist (Director of Compliance) The General Manager (“GM”) oversees the day-to-day operations of our facility, managing security, manufacturing, facilities, cultivation, accounting, sales and marketing, and public relations. He has financial responsibility (P & L) of the operations and is accountable to the corporate officers. The General Manager will provide leadership to all departments throughout the 5,000 square-foot facility, and he must keep tight control of the senior management-approved budget. This staff member is ultimately responsible for overall building appearance, cleanliness, comfort, functionality, safety and security. This individual is also responsible for working with the Cultivation Team to develop projected harvests on a timeline and within an approved budget. The General Manager will also need an understanding of scientific principles related to organic cultivation of medical marijuana for the propagation of plants in all stages of growth. The General Manager’s role is to oversee all aspects of the cultivation process from germination to various stages of growth through harvest on an aggressive scale. The General Manager is further responsible for all plant inventories throughout harvest, the dispensing of daily nutrients, quality control and pest-management, all conducted in this state-of-the-art facility. Finally, this position is ultimately responsible for employees’ strict adherence to the District of Columbia laws concerning medical marijuana in all aspects of propagation, security, inventory control, kitchen facilities and laboratory services. Apelles LLC Security Dept. Ops Manual p. 13 of 73 © 2013 Apelles LLC. All Rights Reserved. Security Manager The Security Manager is responsible for the ongoing daily management of information and data security policies, procedures, and technical systems in order to maintain the confidentiality, integrity, and availability of all organizational information and source code systems. The Security Manager provides operational support for Facilities, Manufacturing and Cultivation Management functions and processes. The Security Manager is responsible for maintaining the security escalation process and working with outside security vendors and the MPD. The position is also responsible for maintaining security logs and tracking deliveries to dispensaries. The Security Manager collects and summarizes security events and data and then assembles and produces security reports, including reports to satisfy audit requirements. Security Guard The Security Guard is responsible for the overall security at Apelles Cultivation. The Security Guard reports to the Security Manager and will work part-time handling all security issues, the front reception area, overseeing the parking lot, and assisting and unlocking outside gates for employees and delivery vehicles entering and exiting the facility. The Security Guard also works in conjunction with the Security Manager to enforce Apelles LLC security policies, procedures, and technical systems in order to maintain the confidentiality, integrity, and availability of all organizational information and source code systems. The Security Guard provides operational support to the Security Manager in areas of Facilities, Manufacturing and Cultivation Management functions and processes. The Security Guard is responsible for maintaining the security escalation process and working with outside security vendors and the MPD under the direction of the Security Manager. The position is also responsible for maintaining security logs and tracking of deliveries to dispensaries. Apelles LLC Security Dept. Ops Manual p. 14 of 73 © 2013 Apelles LLC. All Rights Reserved. Safety & Security Training Employee Registration ID Cards The District requires that all employees register with the Department and receive a non-transferrable Registration Identification Card. All employees and agents of the cultivation center are required to wear this card as a badge on their person at all times when working at the cultivation center. Security Guards are also required to have and wear a Registration ID Card. It is a violation of District law to enter restricted access areas within the center without wearing your badge. Registration ID Card Policy Apelles LLC Security Dept. Ops Manual p. 15 of 73 © 2013 Apelles LLC. All Rights Reserved. Revocation of Registration ID Cards Radio Protocol Proper communication over our portable radios is crucial to providing safety and security to all who visit the cultivation center. To ensure we provide that safety, all cultivation center Security Department Staff will adhere to the following radio procedures. Radio Overview & Operation Our portable radios are Designated Radio Channels y. Apelles LLC Security Dept. Ops Manual p. 16 of 73 © 2013 Apelles LLC. All Rights Reserved. Staff Escorts • Recordkeeping Apelles Cultivation has developed a detailed record-keeping plan that not only ensures compliance with Department rules, but also assists in discouraging unlawful activities. Apelles Cultivation maintains records that detail all relevant information regarding the cultivation and sale of medical marijuana including: – The date of each sale to a dispensary; – The name, address, and registration number of the dispensary; – The quantity of medical marijuana and/or alternative dosage products (ADPs) sold to the dispensary; Apelles LLC Security Dept. Ops Manual p. 20 of 73 © 2013 Apelles LLC. All Rights Reserved. – The price charged and the amount received for the medical marijuana from the dispensary; – The quantity and from of medical marijuana maintained at the cultivation center on a daily basis; and – The amount of plants being grown at the cultivation center on a daily basis. For each sale of medical marijuana, Apelles Cultivation creates duplicate invoices for each transaction that are consecutively numbered. Each invoice contains the following information: – The date of sale to the dispensary. – The name, address, and registration number of the dispensary. – The form and quantity of medical marijuana and/or paraphernalia in each sale. – The price of each item in each sale with the total price. – A true, accurate, legible, and complete statement of the terms and conditions on which the sale is made. Apelles Cultivation will systematically file and maintain all invoices and delivery slips for a period of four (4) years from the date of delivery. Preventing Diversion Reference the Incident Reporting section of this Operations Manual for details on reporting lost or stolen marijuana. Apelles LLC Security Dept. Ops Manual p. 21 of 73 © 2013 Apelles LLC. All Rights Reserved. Daily Closing Procedures Apelles LLC Security Dept. Ops Manual p. 22 of 73 © 2013 Apelles LLC. All Rights Reserved. Security System Features Alarm System As required by District law, Apelles Cultivation has installed, maintained, and uses a professionally monitored alarm/intrusion detection system. Apelles LLC Security Dept. Ops Manual p. 23 of 73 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Security Dept. Ops Manual p. 24 of 73 © 2013 Apelles LLC. All Rights Reserved. Lighting Closed--Circuit Video Surveillance (CCTV) Camera Information Apelles LLC Security Dept. Ops Manual p. 25 of 73 © 2013 Apelles LLC. All Rights Reserved. Exterior Cameras: Dual Lens IP Camera r. Figure 2: Figure 3: Figure 4: Apelles LLC Security Dept. Ops Manual Figure 5: p. 26 of 73 © 2013 Apelles LLC. All Rights Reserved. Exterior/Low-Light Cameras Video Storage Apelles LLC Security Dept. Ops Manual p. 27 of 73 © 2013 Apelles LLC. All Rights Reserved. Video Recording Video Monitoring CCTV Equipment Maintenance Apelles LLC Security Dept. Ops Manual p. 28 of 73 © 2013 Apelles LLC. All Rights Reserved. Access Control System Overview Keypad Locations Apelles LLC Security Dept. Ops Manual p. 29 of 73 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Security Dept. Ops Manual p. 30 of 73 © 2013 Apelles LLC. All Rights Reserved. Security Tours Security personnel prepare for, carry out, and report on security tours during and after regular work hours and on weekends. They follow standard procedures prior to, during, and after each tour. Prior to The Tour (All Tours) Security Manager (or Security Supervisor On Duty) • . • Security Guard • ly. Apelles LLC Security Dept. Ops Manual p. 31 of 73 © 2013 Apelles LLC. All Rights Reserved. During The Tour (All Tours) Security Manager (or Security Supervisor On Duty) • Security Guard • All Tours: After The Tour Security Manager (or Security Supervisor On Duty) • Apelles LLC Security Dept. Ops Manual p. 32 of 73 © 2013 Apelles LLC. All Rights Reserved. • Security Guard • Additional Responsibilities (Regular Work Hours) Security Guard: Building Lobby • Floor Reception • Corporate Legal • Apelles LLC Security Dept. Ops Manual p. 33 of 73 © 2013 Apelles LLC. All Rights Reserved. Security Patrols • Additional Responsibilities Security Manager (or Security Supervisor On Duty) • Apelles LLC Security Dept. Ops Manual p. 34 of 73 © 2013 Apelles LLC. All Rights Reserved. Security Guard • Apelles LLC Security Dept. Ops Manual p. 35 of 73 © 2013 Apelles LLC. All Rights Reserved. Deliveries Delivery Policies & D.C. Law Compliance Delivery Destinations Delivery Timeframes es. Required Identification All Apelles LLC employees are required to wear on their person their Department-issued Registration ID Card while working in the facility and while making deliveries. Failure to do so is a violation of D.C. law and company policy, and Age Requirements Transport Permits ent. Apelles LLC Security Dept. Ops Manual p. 36 of 73 © 2013 Apelles LLC. All Rights Reserved. Delivery Vehicle Locked Transport Boxes Restriction on Back-to-Back Deliveries Driver Smartphone w/ GPS Tracker Requirement Dispensary Relationships Apelles LLC Security Dept. Ops Manual p. 37 of 73 © 2013 Apelles LLC. All Rights Reserved. Company Policies Re: Dispensary Deliveries • Processing & Preparation for Delivery 1. Apelles LLC Security Dept. Ops Manual p. 38 of 73 © 2013 Apelles LLC. All Rights Reserved. 2. Processing & Procedures for Delivery Driver Delivery Process 6. Apelles LLC Security Dept. Ops Manual p. 39 of 73 © 2013 Apelles LLC. All Rights Reserved. 9. Arrival at the Dispensary 1. 8. 12. Apelles LLC Security Dept. Ops Manual p. 40 of 73 © 2013 Apelles LLC. All Rights Reserved. Leaving the Dispensary 1. 8. 12. Apelles LLC Security Dept. Ops Manual p. 41 of 73 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Delivery Driver Rules Rules for Safety 1. 6. Apelles LLC Security Dept. Ops Manual p. 42 of 73 © 2013 Apelles LLC. All Rights Reserved. Delivery Rules for Professional Conduct & Product Quality Control • Procedures If Stopped by MPD or Other Law Enforcement • Procedures for Accident 1. . Apelles LLC Security Dept. Ops Manual p. 43 of 73 © 2013 Apelles LLC. All Rights Reserved. What to Do if Attacked Apelles LLC Security Dept. Ops Manual p. 44 of 73 © 2013 Apelles LLC. All Rights Reserved. Conflict Prevention & Resolution Maintaining Personal Control Apelles LLC Security Dept. Ops Manual p. 45 of 73 © 2013 Apelles LLC. All Rights Reserved. Ask, Don’t Tell Non-Violent Communication Apelles LLC Security Dept. Ops Manual p. 46 of 73 © 2013 Apelles LLC. All Rights Reserved. Conflict Resolution d. t. Apelles LLC Security Dept. Ops Manual p. 47 of 73 © 2013 Apelles LLC. All Rights Reserved. Incident Reports Overview Policy Statement Reasons For Reporting Incidents Incident Report Classifications: What To Report Apelles LLC Security Dept. Ops Manual p. 48 of 73 © 2013 Apelles LLC. All Rights Reserved. • • • Apelles LLC Security Dept. Ops Manual p. 49 of 73 © 2013 Apelles LLC. All Rights Reserved. • Condition Report Classifications Apelles LLC Security Dept. Ops Manual p. 50 of 73 © 2013 Apelles LLC. All Rights Reserved. • Reporting to the Metropolitan Police Department (MPD) External Reporting Information which discloses security/investigative procedures or operations shall never be released. When disclosure is compulsory, for example, in the course of an official investigation, approval must be obtained in advance from the Executive Director. Reporting of Serialized Equipment Theft Apelles LLC Security Dept. Ops Manual p. 51 of 73 © 2013 Apelles LLC. All Rights Reserved. Completing the Incident Report Basic Investigations • Correcting the Hazard and Preventing Reoccurrence Apelles LLC Security Dept. Ops Manual p. 52 of 73 © 2013 Apelles LLC. All Rights Reserved. Incident Summary Log Apelles LLC Security Dept. Ops Manual p. 53 of 73 © 2013 Apelles LLC. All Rights Reserved. Threats & Acts Of Violence Overview Requirements • Apelles LLC Security Dept. Ops Manual p. 54 of 73 © 2013 Apelles LLC. All Rights Reserved. – Threat--maker Control Strategies On-Site Incidents Apelles LLC Security Dept. Ops Manual p. 55 of 73 © 2013 Apelles LLC. All Rights Reserved. Off-Site Incidents Threats Received From Outside the District of Columbia • Threat and Violence Preparation Checklist Security personnel and an Apelles LLC Security Dept. Ops Manual p. 56 of 73 © 2013 Apelles LLC. All Rights Reserved. Emergency Procedures Policy Purpose Structure Emergency Notifications ons. Emergency Evacuation Plan Apelles LLC Security Dept. Ops Manual p. 71 of 73 © 2013 Apelles LLC. All Rights Reserved. • Medical Emergencies on • Apelles LLC Security Dept. Ops Manual p. 72 of 73 © 2013 Apelles LLC. All Rights Reserved. Fires Fire Safety Procedures – – Apelles LLC Security Dept. Ops Manual p. 73 of 73 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Security Dept. Ops Manual p. 74 of 73 © 2013 Apelles LLC. All Rights Reserved. APPENDIX G Apelles LLC Cultivation Center Cultivation Department Operations Manual Table of Contents Introduction Apelles Cultivation Operations Documentation .................................................................................................. 3 Cultivation Department Operations Manual ........................................................................................................ 3 Company Information Company Overview .............................................................................................................................................. 4 Mission Statement ................................................................................................................................................ 4 Core Values .......................................................................................................................................................... 5 Keys to Success .................................................................................................................................................... 5 Apelles LLC Product Line ................................................................................................................................... 6 Cultivation Cultivation Department Overview ....................................................................................................................... 7 Cultivation Overview ........................................................................................................................................... 7 Cultivation Department Staff ............................................................................................................................. 9 Cultivation Equipment ....................................................................................................................................... 11 Adilas – Inventory Data Tracking Overview ............................................................................................................................................................ 12 Product Safety Overview ........................................................................................................................................................... 13 Environmental ................................................................................................................................................... 14 Site Design Features by Environmental Concerns ............................................................................ 14 Clean Room Environment .................................................................................................................. 14 Strict Cleaning and Sanitization Procedures ...................................................................................... 15 Air Filtration ........................................................................................................................................ 15 Destruction ......................................................................................................................................................... 16 Storage & Bulk Packaging ............................................................................................................................... 16 Concentrate ........................................................................................................................................................ 16 Packaging for Dispensaries .............................................................................................................................. 17 Product Tracking ............................................................................................................................................... 17 Food Safety ....................................................................................................................................................... 18 D.C. Food Code ................................................................................................................................................ 19 General Cleanliness and Sanitation Policy ...................................................................................................... 20 Hand Washing ................................................................................................................................................... 21 Hygiene .............................................................................................................................................................. 22 Apelles Cultivation Department Operation Manual 3 © 2013 Apelles L.L.C., All Rights Reserved. Marijuana Quality Control Measures Marijuana Plant Quality Control ...................................................................................................................... 23 Alternative Dosage Product (ADP) Quality Control ...................................................................................... 23 “Person in Charge” and “Certified Food Protection Manager” ...................................................................... 24 “Highly Susceptible Population” ..................................................................................................................... 24 Choice of Extraction Processes ........................................................................................................................ 24 Dosage Considerations ...................................................................................................................................... 25 Processing and Manufacturing Edibles ........................................................................................................... 25 Organic Cultivation Organic Certification ......................................................................................................................................... 27 Overview and Definitions ................................................................................................................................ 29 What Is Organic? ................................................................................................................................. 29 Differences between “100% Organic” and “Organic” ...................................................................... 29 What Is Organic Production? ............................................................................................................. 29 OMRI Certification ............................................................................................................................. 30 Organic Methodology ........................................................................................................................................ 30 Other Organic Methods Used by Apelles LLC ............................................................................................... 31 Processes to Provide Natural Fungicides ........................................................................................... 32 Organic Compost Biological Teas for Plant Protection .................................................................... 32 Liquid Composting Solutions & H2O2 ............................................................................................... 32 Organic Kelp ....................................................................................................................................... 32 Compounds Used ................................................................................................................................ 32 Varietals & Product Offerings ......................................................................................................................... 33 All Chemical Additives that May Be Used in Organic Products ................................................................... 34 Procurement Initial Supply ..................................................................................................................................................... 38 Cloning .............................................................................................................................................................. 38 Inventory Plan & Staggered Growing ............................................................................................................. 38 Initial Propagation by Week ............................................................................................................... 39 Full Cultivation Cycle ......................................................................................................................... 39 Apelles Cultivation Department Operation Manual 3 © 2013 Apelles L.L.C., All Rights Reserved. Introduction Apelles Cultivation Operations Documentation At Cultivation Department Operations Manual Apelles Cultivation Department Operation Manual 3 © 2013 Apelles L.L.C., All Rights Reserved. Company Information Company Overview Mission Statement • Apelles Cultivation Department Operation Manual 4 © 2013 Apelles L.L.C., All Rights Reserved. • Core Values Apelles Cultivation believes in: • Keys to Success Important keys to our success include: • Apelles Cultivation Department Operation Manual 5 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Product Line Apelles Cultivation Department Operation Manual 6 © 2013 Apelles L.L.C., All Rights Reserved. Cultivation Cultivation Department Overview The Cultivation Department is responsible for all aspects of marijuana plant cultivation from germination to the various stages of growth through harvest. The department is responsible for the dispensing of daily nutrients, quality control, and pest management as well as for ensuring accurate data entry and tracking of all marijuana through harvest and hand-off to the Manufacturing Department. Cultivation Overview Apelles Cultivation Department Operation Manual 7 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 8 © 2013 Apelles L.L.C., All Rights Reserved. Cultivation Department Staff Apelles Cultivation Department Operation Manual 9 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 10 © 2013 Apelles L.L.C., All Rights Reserved. • Apelles Cultivation Department Operation Manual 11 © 2013 Apelles L.L.C., All Rights Reserved. Cultivation Equipment • Apelles Cultivation Department Operation Manual 12 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 13 © 2013 Apelles L.L.C., All Rights Reserved. Product Safety Overview Product Safety from Seed to Sale Apelles Cultivation Department Operation Manual 14 © 2013 Apelles L.L.C., All Rights Reserved. Environmental Clean Room Environment Apelles Cultivation Department Operation Manual 15 © 2013 Apelles L.L.C., All Rights Reserved. Strict Cleaning and Sanitization Procedures Air Filtration Apelles Cultivation Department Operation Manual 16 © 2013 Apelles L.L.C., All Rights Reserved. Destruction Storage & Bulk Packaging Concentrate Apelles Cultivation Department Operation Manual 17 © 2013 Apelles L.L.C., All Rights Reserved. Packaging for Dispensaries Product Tracking Apelles Cultivation Department Operation Manual 18 © 2013 Apelles L.L.C., All Rights Reserved. Food Safety D.C. Food Code In 2003, the Department of Health, which is responsible for overseeing food safety in the District of Columbia, completed a major revision of its food safety regulations. These new regulations incorporated the 1999 federal Food Code, with amendments specific to the District of Columbia. The Department-issued User-Friendly Version of the District of Columbia Food Code has been included as an Addendum to this Operations Manual. It is to be used as an essential companion to this facility’s operations policies and procedures. The Food Code covers regulations regarding: • Management and personnel • Food (receiving, storage, preventing contamination, etc.) • Equipment, utensils, and linens • Water, plumbing, and waste • Physical facilities • Poisonous or toxic materials • Special requirements • Compliance, enforcement, and definitions • Inspectional Guide The following link will be checked occasionally for updates to the code: http://hrla.doh.dc.gov/hrla/cwp/view,a,1385,q,572134.asp Apelles Cultivation Department Operation Manual 19 © 2013 Apelles L.L.C., All Rights Reserved. General Cleanliness and Sanitation Policy – Apelles Cultivation Department Operation Manual 20 © 2013 Apelles L.L.C., All Rights Reserved. • n. Hand Washing – Apelles Cultivation Department Operation Manual 21 © 2013 Apelles L.L.C., All Rights Reserved. Hygiene – Apelles Cultivation Department Operation Manual 22 © 2013 Apelles L.L.C., All Rights Reserved. Marijuana Quality Control Measures Marijuana Plants Quality Control d. ns. Apelles Cultivation Department Operation Manual 23 © 2013 Apelles L.L.C., All Rights Reserved. ns. “Highly Susceptible Population” The District’s Food and Food Operations Regulations emphasize the Health Department’s special oversight of food operators who serve residents that may have higher health risks than the general population. These at-risk residents, referred to in Title 25 as the District’s “highly susceptible population,” are defined, generally, as those who are immuno-compromised, aged, very young, or living in a group residential setting. Apelles Cultivation understands and accepts its duty to these District residents. Apelles LLC welcomes Health Department inspections and oversight to help ensure the safety and health of the District’s patients. Choice of Extraction Processes ned Apelles Cultivation Department Operation Manual 24 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 25 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 26 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 27 © 2013 Apelles L.L.C., All Rights Reserved. • Apelles Cultivation Department Operation Manual 28 © 2013 Apelles L.L.C., All Rights Reserved. Overview and Definitions What Is Organic? Organic is a labeling term for agricultural products (normally associated with food) that have been produced through USDA-approved biological, cultural, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity. Synthetic fertilizers, sewage sludge, irradiation, and genetic engineering may not be used in organic cultivation. Differences between “100% Organic” and “Organic” According to the USDA, products labeled as “100% organic” must contain (excluding water and salt) only organically produced ingredients and processing aids. Products labeled “organic” must consist of at least 95 percent organically produced ingredients (again, excluding water and salt). All remaining product ingredients must consist of nonagricultural substances approved on the national list including specific agricultural products that are not commercially available in organic form. Processed products labeled “made with organic ingredients” are processed products that contain at least 70 percent organic ingredients and list up to three of the organic ingredients or food groups on the principal display panel. For example, soup made with at least 70 percent organic ingredients and only organic vegetables may be labeled either “soup made with organic peas, potatoes, and carrots,” or “soup made with organic vegetables.” Processed products labeled “made with organic ingredients” cannot be produced using excluded methods, such as sewage sludge or ionizing radiation. The percentage of organic content and the certifying agent seal or mark may be used on the principal display panel. However, the USDA seal cannot be used anywhere on the package. Processed products that contain less than 70% organic ingredients cannot use the term organic anywhere on the principal display panel. However, they may identify the specific ingredients that are organically produced on the ingredients statement on the information panel. What Is Organic Production? The Organic Foods Production Act (OFPA), enacted under Title 21 of the 1990 Farm Bill, served to establish uniform national standards for the production and handling of foods labeled as “organic.” The Act authorized a new USDA National Organic Program (NOP) to set national standards for the production, handling, and processing of organically grown agricultural products. In addition, the Program oversees mandatory certification of organic production. The Act also established the National Organic Standards Board (NOSB), which advises the Secretary of Agriculture in setting the standards upon which the NOP is based. Producers who meet standards set by the NOP may label their products as “USDA Certified Organic.” Organic agriculture is an ecological production management system that promotes and enhances biodiversity, biological cycles, and soil biological activity. It is based on minimal use of off-farm inputs and on management practices that restore, maintain, and enhance ecological harmony. “Organic” is a labeling term that denotes products produced under the authority of the Organic Foods Production Act. The principal guidelines for organic production are to use materials and practices that enhance the ecological balance of natural systems and that integrate the parts of the farming system into an ecological whole. Apelles Cultivation Department Operation Manual 29 © 2013 Apelles L.L.C., All Rights Reserved. Organic agriculture practices cannot ensure that products are completely free of residues; however, methods are used to minimize pollution from air, soil, and water. Organic food handlers, processors, and retailers adhere to standards that maintain the integrity of organic agricultural products. The primary goal of organic agriculture is to optimize the health and productivity of interdependent communities of soil life, plants, animals, and people. OMRI Certification The Organic Materials Review Institute (OMRI) was founded in 1997 as a nonprofit organization. This organization provides independent reviews of organic certifiers, growers, manufacturers, and suppliers of products intended for use in certified organic production, handling, and processing. OMRI reviews products against the National Organic Standards. Acceptable products are OMRI Listed® and appear on the OMRI Products List. OMRI also provides subscribers and certifiers guidance on the acceptability of various material inputs in general under the National Organic Program. Apelles LLC will use the database of the National Organic Program to crosscheck all products for their OMRI certification. • Apelles Cultivation Department Operation Manual 30 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 31 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 32 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 33 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 34 © 2013 Apelles L.L.C., All Rights Reserved. levels down in water, and as a Apelles Cultivation Department Operation Manual 35 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 36 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 37 © 2013 Apelles L.L.C., All Rights Reserved. Procurement Initial Supply Determining the variety of strains is an important factor for consideration by Apelles LLC. Apelles Cultivation Department Operation Manual 38 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 39 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 40 © 2013 Apelles L.L.C., All Rights Reserved. Apelles Cultivation Department Operation Manual 41 © 2013 Apelles L.L.C., All Rights Reserved. APPENDIX G Apelles LLC Cultivation Center Manufacturing Department Operations Manual Table of Contents Introduction ............................................................................................................ 5 Apelles LLC Operations Documentation ............................................................................................................. 5 Manufacturing Department Operations Manual................................................................................................... 5 Company Information ............................................................................................ 6 Company Overview .............................................................................................................................................. 6 Mission Statement ................................................................................................................................................ 6 Core Values .......................................................................................................................................................... 7 Keys to Success .................................................................................................................................................... 7 Apelles LLC Product Line ................................................................................................................................... 8 Cultivation Overview ........................................................................................................................................... 8 Manufacturing Department Staff ..................................................................................................................... 11 General Manager/Senior Horticulturist (Director of Compliance) ................................................... 11 ADP Technician (PC) ......................................................................................................................... 12 Inventory Control Supervisor ............................................................................................................. 12 Delivery and Production Assistant ..................................................................................................... 13 Product Safety ....................................................................................................... 14 Environmental ................................................................................................................................................... 15 Site Design Features by Environmental Concerns ............................................................................ 15 Clean Room Environment .................................................................................................................. 15 Strict Cleaning and Sanitization Procedures ...................................................................................... 16 Air Filtration ........................................................................................................................................ 17 Destruction process ........................................................................................................................................... 17 Storage & Bulk Packaging ............................................................................................................................... 17 Concentrate ........................................................................................................................................................ 18 Packaging for Dispensaries .............................................................................................................................. 18 Product Tracking ............................................................................................................................................... 19 Food Safety ....................................................................................................................................................... 19 D.C. Food Code ................................................................................................................................................ 19 General Cleanliness & Sanitation Policy ......................................................................................................... 20 Hand Washing ................................................................................................................................................... 21 Hygiene .............................................................................................................................................................. 22 Marijuana Quality Control Measures .................................................................. 24 Marijuana Plants Quality Control .................................................................................................................... 24 Alternative Dosage Product (ADP) Quality Control ...................................................................................... 24 “Person in Charge” and “Certified Food Protection Manager” ...................................................................... 25 “Highly Susceptible Population” ..................................................................................................................... 25 Oveom LLC Manufacturing Dept. Ops Manual p. 2 of 66 © 2013 Oveom LLC. All Rights Reserved. Choice of Extraction Processes ........................................................................................................................ 25 Dosage Considerations ...................................................................................................................................... 26 Processing and Manufacturing Edibles ........................................................................................................... 26 Drying & Curing .................................................................................................... 28 Manicuring ............................................................................................................ 29 Apelles Cultivation Laboratory’s Mission ....................................................................................................... 30 Laboratory Design ............................................................................................................................................ 30 Laboratory Equipment & Procedures .............................................................................................................. 33 High Powered Microscopes ................................................................................................................ 33 Mass Spectrometry .............................................................................................................................. 34 Glossary of Laboratory Terms ......................................................................................................................... 35 Apelles Cultivation’s Commercial Kitchen ..................................................................................................... 37 Dosage, Purity and Strength of Edibles – Our Laboratory Advantage .......................................................... 37 THC or THCA? ................................................................................................................................................ 39 Apelles Cultivation’s Protocol for Testing ADPs ........................................................................................... 39 Product Documentation Sheet for ADPs – What It Tell Patients ................................................................... 39 Sample Product Documentation Sheet ............................................................................................... 40 Individual Dosage Unit ....................................................................................................................... 41 Milligrams of Cannabinoids ............................................................................................................... 41 “Cannabinoid Profile” .......................................................................................................................... 41 “Other Special Information” ............................................................................................................... 42 Core ADP Product Line ................................................................................................................................... 42 Baked Products – Cookies and Brownies .......................................................................................... 42 Chocolate Truffles ............................................................................................................................... 42 Advanced ADP Product Line ........................................................................................................................... 43 Syrups .................................................................................................................................................. 43 Syrup-Flavored Drinks ........................................................................................................................ 43 Lozenges .............................................................................................................................................. 43 Cannabis Butter and Cannabis Olive Oil ........................................................................................... 44 Tinctures .............................................................................................................................................. 44 Creams, Ointments and Emollients .................................................................................................... 44 Edibles Manufacturing Plan ................................................................................. 45 Introduction ....................................................................................................................................................... 45 The Choice of Extraction Processes ................................................................................................................ 45 Extraction into Butter or Oil vs. Extraction into Alcohol ............................................................................... 45 Dosage Considerations ...................................................................................................................................... 45 Processing and Manufacturing Apelles Cultivation’s Edibles ........................................................................ 46 Tracking & Documenting Medical Marijuana Transactions .............................. 48 Inventory Data Tracking at Every Stage – Adilas ........................................................................................... 48 Oveom LLC Manufacturing Dept. Ops Manual p. 3 of 66 © 2013 Oveom LLC. All Rights Reserved. Required Documentation of Medical Marijuana Transactions ........................................................................ 48 Packaging & Labeling ........................................................................................... 50 Packaging ........................................................................................................................................................... 50 Edibles Packaging ............................................................................................................................................. 51 Labels ................................................................................................................................................................. 52 Label Detail – Standard Labels (Smokables) .................................................................................... 52 Labeling of Non-Smokable Products ................................................................................................. 53 Label Detail – Alternate Labels (Non-Smokables) ........................................................................... 54 Label Sample: Smokables .................................................................................................................. 56 Label Sample: Non-Smokables .......................................................................................................... 57 Delivery ................................................................................................................. 59 Delivery Policies & D.C. Law Compliance .................................................................................................... 59 Delivery Destinations ........................................................................................................................... 59 Delivery Timeframes ........................................................................................................................... 59 Required Identification ........................................................................................................................ 59 Age Requirements ............................................................................................................................... 59 Transport Permits ................................................................................................................................ 59 Delivery Vehicle ................................................................................................................................. 60 Locked Transport Boxes ..................................................................................................................... 60 Restriction on Back-to-Back Deliveries ............................................................................................. 60 Driver Smartphone w/ GPS Tracker Requirement ............................................................................ 60 Dispensary Relationships .................................................................................................................................. 60 Company Policies Re: Dispensary Deliveries ................................................................................... 61 Processing & Preparation for Delivery ............................................................................................................ 61 Processing & Procedures for Delivery Driver ................................................................................................. 62 Delivery Process .................................................................................................................................. 62 Arrival at the Dispensary .................................................................................................................... 63 Leaving the Dispensary ...................................................................................................................... 64 Apelles LLC Delivery Driver Rules ................................................................................................................ 65 Rules for Safety ................................................................................................................................... 65 Delivery Rules for Professional Conduct & Product Quality Control ............................................. 66 Procedures If Stopped by MPD or Other Law Enforcement .......................................................................... 66 Procedures for Accident ................................................................................................................................... 66 What to Do if Attacked ..................................................................................................................................... 67 Oveom LLC Manufacturing Dept. Ops Manual p. 4 of 66 © 2013 Oveom LLC. All Rights Reserved. Introduction Apelles LLC Operations Documentation At Apelles Cultivation, rather than having one comprehensive yet unwieldy Operations Manual, each core department (Security, Cultivation, Manufacturing, Facilities) is equipped with a separate Operations Manual that is designed as a one-stop collection of all policies and procedures related to that department’s operations. Having individual department manuals allows staff members to more easily reference operational documentation on an ongoing basis, as well as utilize the manual during the training process. The Security department has an additional Security Management Operations Manual with restricted access for the Security Department Manager and members of upper management only. This is the only core department that has a separate location for department-specific operations documentation. In addition to the individual department Operations Manuals, there is also the Cultivation Center Policy & Procedure (P&P) Manual that lives in the General Manager’s office. It details all company and management level operations, as well as operations documentation for ancillary departments such as Human Resources, Accounting, and Sales & Marketing. Refer to the Apelles Cultivation Operations Reference Set schematic in the Appendix for a one-page view of all operational documentation that resides in the cultivation center. Apelles Cultivation Operations materials are considered confidential company property and may not be taken off the premises by staff members. Manufacturing Department Operations Manual Oveom LLC Manufacturing Dept. Ops Manual p. 5 of 66 © 2013 Oveom LLC. All Rights Reserved. Company Information Company Overview The single over-arching objective of Apelles Cultivation is to build, operate and grow its cultivation center to become the best example possible of how marijuana can be produced safely and economically under the Act, an example that the government and the people of the District of Columbia demand, deserve and can be proud of. Mission Statement Apelles Cultivation Center is dedicated to providing the citizens of the District of Columbia with: • • Oveom LLC Manufacturing Dept. Ops Manual p. 6 of 66 © 2013 Oveom LLC. All Rights Reserved. • Core Values Apelles Cultivation believes in: • Keys to Success Important keys to our success include: • Oveom LLC Manufacturing Dept. Ops Manual p. 7 of 66 © 2013 Oveom LLC. All Rights Reserved. Cultivation Overview Oveom LLC Manufacturing Dept. Ops Manual p. 8 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 9 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 10 of 66 © 2013 Oveom LLC. All Rights Reserved. Manufacturing Department Staff Apelles Cultivation Center has a comprehensive staffing plan in place to guide recruitment, hiring, training and managing its employees. Highlights of the plan feature: – Precise definition of responsibilities – Clearly understood chains of authority – Well-paid, well-qualified, well-trained personnel – Professional recruiting practices – Thorough training of new hires Individual job descriptions have been developed for each position in Apelles Cultivation Center’s organization. The purpose is to ensure that all personnel are clear about their role and responsibilities, and to understand how their position contributes to the safe, efficient operation of the center. Oveom LLC Manufacturing Dept. Ops Manual p. 11 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 12 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 13 of 66 © 2013 Oveom LLC. All Rights Reserved. Product Safety Overview Product Safety from Seed to Sale Oveom LLC Manufacturing Dept. Ops Manual p. 14 of 66 © 2013 Oveom LLC. All Rights Reserved. Environmental Oveom LLC Manufacturing Dept. Ops Manual p. 15 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 16 of 66 © 2013 Oveom LLC. All Rights Reserved. Destruction process Storage & Bulk Packaging Oveom LLC Manufacturing Dept. Ops Manual p. 17 of 66 © 2013 Oveom LLC. All Rights Reserved. Concentrate Packaging for Dispensaries Oveom LLC Manufacturing Dept. Ops Manual p. 18 of 66 © 2013 Oveom LLC. All Rights Reserved. Product Tracking Food Safety D.C. Food Code In 2003, the Department of Health, which is responsible for overseeing food safety in the District of Columbia, completed a major revision of its food safety regulations. These new regulations incorporated the 1999 federal Food Code, with amendments specific to the District of Columbia. Oveom LLC Manufacturing Dept. Ops Manual p. 19 of 66 © 2013 Oveom LLC. All Rights Reserved. The Department-issued User-Friendly Version of the District of Columbia Food Code has been included as an Addendum to this Operations Manual. It is to be used as an essential companion to this facility’s operations policies and procedures. The Food Code covers regulations regarding: • Management and personnel • Food (receiving, storage, preventing contamination, etc.) • Equipment, utensils, and linens • Water, plumbing, and waste • Physical facilities • Poisonous or toxic materials • Special requirements • Compliance, enforcement, and definitions • Inspectional Guide Occasionally check for updates on the Department of Health website at this link: http://hrla.doh.dc.gov/hrla/cwp/view,a,1385,q,572134.asp General Cleanliness & Sanitation Policy As with any product meant for human consumption, cleanliness and sanitation are important. Given that many of our patients have compromised immune systems, it is all the more critical to make sure medicine is produced, handled, transported, and stored in a manner that ensures quality and safety. The District of Columbia has strict guidelines to ensure the quality and safety of the products, and this facility takes pride in being fully compliant. The guidelines are as follows: • Medical marijuana in the process of production, preparation, manufacture, packing, storage, sale, distribution, or transportation is protected from flies, dust, dirt, and all other contamination. • Refuse or waste products incident to the manufacture, preparation, packing, selling, distributing, or transportation of medical marijuana are removed from the building at least once every 24 hours or more often as necessary to maintain a clean condition. • All trucks, trays, buckets, other receptacles, platforms, racks, tables, shelves, knives, saws, cleavers, other utensils, or the machinery used in handling or processing marijuana products must be cleaned daily. • All edible food products must be securely covered. • A hand-washing sink will be easily accessible to employees. • All employees must clean their hands and exposed arms: Oveom LLC Manufacturing Dept. Ops Manual p. 20 of 66 © 2013 Oveom LLC. All Rights Reserved. • – Before preparing marijuana, including working with food, equipment, and utensils – During preparation, as often as necessary to remove soil and contamination and to prevent crosscontamination when changing tasks – After handling soiled equipment or utensils – After touching bare human body parts other than the dispensary agent's clean hands and exposed portions of arms – After using the lavatory If working directly with the preparation of medical marijuana or the infusion of marijuana into nonedible products, employees must: – Keep fingernails trimmed, filed, and maintained so that the edges and surfaces are cleanable; – Not have fingernail polish or artificial fingernails (unless wearing intact gloves in good repair); and – Wear protective apparel such as coats, aprons, gowns, or gloves to prevent contamination; • Employees must wear clean clothing appropriate to assigned tasks. • Employees must report to their General Manager any health condition experienced that may adversely affect the safety or quality of any medical marijuana with which they might come into contact. • If the General Manager determines that an employee has a health condition that may adversely affect the safety or quality of the medical marijuana, that employees is prohibited from direct contact with any medical marijuana or equipment or materials for processing medical marijuana until the GM determines that the employee’s health condition will not adversely affect the medical marijuana. Hand Washing Oveom LLC Manufacturing Dept. Ops Manual p. 21 of 66 © 2013 Oveom LLC. All Rights Reserved. – – e. Hygiene d Oveom LLC Manufacturing Dept. Ops Manual p. 22 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 23 of 66 © 2013 Oveom LLC. All Rights Reserved. Marijuana Quality Control Measures Marijuana Plants Quality Control Alternative Dosage Product (ADP) Quality Control Oveom LLC Manufacturing Dept. Ops Manual p. 24 of 66 © 2013 Oveom LLC. All Rights Reserved. “Person in Charge” and “Certified Food Protection Manager” “Highly Susceptible Population” The District’s Food and Food Operations Regulations emphasize the Health Department’s special oversight of food operators who serve residents that may have higher health risks than the general population. These at-risk residents, referred to in Title 25 as the District’s “highly susceptible population,” are defined, generally, as those who are immuno-compromised, aged, very young, or living in a group residential setting. Apelles Cultivation understands and accepts its duty to these District residents. Apelles LLC welcomes Health Department inspections and oversight to help ensure the safety and health of the District’s patients. Choice of Extraction Processes Oveom LLC Manufacturing Dept. Ops Manual p. 25 of 66 © 2013 Oveom LLC. All Rights Reserved. Laboratory Testing of Medical Marijuana Apelles Cultivation Laboratory’s Mission Laboratory Design Oveom LLC Manufacturing Dept. Ops Manual p. 30 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 31 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 32 of 66 © 2013 Oveom LLC. All Rights Reserved. Apelles LLC’s Laboratory Testing Model Oveom LLC Manufacturing Dept. Ops Manual p. 33 of 66 © 2013 Oveom LLC. All Rights Reserved. Laboratory Staff Testing medical marijuana using the methods listed previously requires highly trained scientists with educational advanced training. Oveom LLC Manufacturing Dept. Ops Manual p. 34 of 66 © 2013 Oveom LLC. All Rights Reserved. Alternative Dosage Products (ADPs) Introduction Apelles Cultivation’s Commercial Kitchen Dosage, Purity and Strength of Edibles – Our Laboratory Advantage Oveom LLC Manufacturing Dept. Ops Manual p. 37 of 66 © 2013 Oveom LLC. All Rights Reserved. – Oveom LLC Manufacturing Dept. Ops Manual p. 38 of 66 © 2013 Oveom LLC. All Rights Reserved. THC or THCA? The most “potent” or “active” constituent of cannabis is THC, although most of the THC a patient ingests through smoking is a by-product, produced by the heating of a precursor cannabinoid found in cannabis – THCA. The combustion heat converts the THCA to THC through a process called carboxylation. (Carboxylation also occurs to some extent during the drying and curing process.) The “raw” cannabis plant, in other words, contains mostly THCA which, while slightly psychoactive, does not produce the desired therapeutic effects most patients seek. To be effective in an edible, the THCA must be converted to THC, and the THC extract incorporated into the edible. Thus, “raw” cannabis cannot be simply added to an edible – the cannabis plant material containing THCA must be heated to a precise temperature below 380°F to convert the THCA to THC. (Above 380°F, the THC will vaporize.) Apelles Cultivation’s Protocol for Testing ADPs Product Documentation Sheet for ADPs – What It Tell Patients Oveom LLC Manufacturing Dept. Ops Manual p. 39 of 66 © 2013 Oveom LLC. All Rights Reserved. Sample Product Documentation Sheet Oveom LLC Manufacturing Dept. Ops Manual p. 40 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 41 of 66 © 2013 Oveom LLC. All Rights Reserved. Core ADP Product Line Apelles Cultivation’s initial product line is designed to meet the immediate needs of the District’s dispensaries and patients Oveom LLC Manufacturing Dept. Ops Manual p. 42 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 43 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 44 of 66 © 2013 Oveom LLC. All Rights Reserved. Edibles Manufacturing Plan Introduction Apelles Cultivation has carefully analyzed the projected yields from its 95-plant program and has developed a balanced plan for The Choice of Extraction Processes Extraction into Butter or Oil vs. Extraction into Alcohol Dosage Considerations Oveom LLC Manufacturing Dept. Ops Manual p. 45 of 66 © 2013 Oveom LLC. All Rights Reserved. Processing and Manufacturing Apelles Cultivation’s Edibles • Oveom LLC Manufacturing Dept. Ops Manual p. 46 of 66 © 2013 Oveom LLC. All Rights Reserved. Tracking & Documenting Medical Marijuana Transactions Inventory Data Tracking at Every Stage – Required Documentation of Medical Marijuana Transactions As required by Department regulations, Apelles Cultivation keeps detailed records of all marijuana transactions using the Adilas software. For each sale of medical marijuana, Apelles Cultivation creates duplicate invoices for each transaction that are consecutively numbered. Each invoice contains the following information: • The date of sale to the dispensary. • The name, address, and registration number of the dispensary. • The form and quantity of medical marijuana and/or paraphernalia in each sale. • The price of each item in each sale with the total price. Oveom LLC Manufacturing Dept. Ops Manual p. 48 of 66 © 2013 Oveom LLC. All Rights Reserved. Packaging & Labeling Packaging Oveom LLC Manufacturing Dept. Ops Manual p. 50 of 66 © 2013 Oveom LLC. All Rights Reserved. Edibles Packaging s. Oveom LLC Manufacturing Dept. Ops Manual p. 51 of 66 © 2013 Oveom LLC. All Rights Reserved. Labels For reference, please see Figure 5. For examples of printed labels, please refer to Figure 3 and Figure 4. For standard label data, please refer to Figure 1. Figure 1: Sample Details to be included on label for Raw Flower or concentrates only Oveom LLC Manufacturing Dept. Ops Manual p. 52 of 66 © 2013 Oveom LLC. All Rights Reserved. Labeling of Non-Smokable Products 2 Oveom LLC Manufacturing Dept. Ops Manual p. 53 of 66 © 2013 Oveom LLC. All Rights Reserved. Figure 2: Sample Details to be included on label for Alternative Dosage Products Oveom LLC Manufacturing Dept. Ops Manual p. 54 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 55 of 66 © 2013 Oveom LLC. All Rights Reserved. Label Sample: Smokables Figure 3: Sample Adilas Label for Raw Flower or concentrates only Oveom LLC Manufacturing Dept. Ops Manual p. 56 of 66 © 2013 Oveom LLC. All Rights Reserved. Label Sample: Non-Smokables Figure 4: Sam Oveom LLC Manufacturing Dept. Ops Manual p. 57 of 66 © 2013 Oveom LLC. All Rights Reserved. Figure 5: Label Printing Options Oveom LLC Manufacturing Dept. Ops Manual p. 58 of 66 © 2013 Oveom LLC. All Rights Reserved. Delivery Delivery Policies & D.C. Law Compliance Delivery Destinations Apelles Cultivation Center is only permitted to sell and deliver medical marijuana to the specific registered premises of the dispensary where the medical marijuana is sold. Sales from Apelles LLC are not permitted to any other location other than the five registered dispensaries, and may not be sold outside the limits of the District of Columbia. Additionally, Apelles LLC will not deliver medicine to any patient or their caregiver as prohibited by D.C. law. Delivery Timeframes D.C. law dictates that deliveries may ONLY be made between the hours of 7:00AM and 9:00PM (7 days a week) and are NOT PERMITTED after 9:00PM or before 7:00AM. However, the Apelles Cultivation policy is that deliveries to dispensaries can only take place between 10 a.m. and 3 p.m. to avoid rush hour traffic and the high-volume sales times for dispensaries. Required Identification All Apelles LLC employees are required to wear on their person their Department-issued Registration ID Card while working in the facility and while making deliveries. Failure to do so is a violation of D.C. law and company policy, and will result in immediate termination of the employee. Age Requirements For insurance purposes, only Apelles LLC staff members who are at least 25 years of age will be permitted to make deliveries. Transport Permits Prior to transporting any medicine to registered dispensaries, Apelles Cultivation will obtain from the Department a transport permit to transport medicine within the District of Columbia. A separate transport permit will be acquired for each vehicle designated by Apelles Cultivation to deliver medical marijuana to a registered dispensary. The original transport permit will be stored in a secure location at the cultivation center, with a copy of the permit stored in each respective vehicle. Only employees registered with the Department and carrying a valid Registration ID Card will be permitted to transport medical marijuana. Upon demand by an MPD officer or Department investigator, Apelles Cultivation will exhibit the original transport permit provided by the Department. Oveom LLC Manufacturing Dept. Ops Manual p. 59 of 66 © 2013 Oveom LLC. All Rights Reserved. Delivery Vehicle Locked Transport Boxes Ape Restriction on Back-to-Back Deliveries Driver Smartphone w/ GPS Tracker Requirement Dispensary Relationships Oveom LLC Manufacturing Dept. Ops Manual p. 60 of 66 © 2013 Oveom LLC. All Rights Reserved. Company Policies Re: Dispensary Deliveries • Processing & Preparation for Delivery Oveom LLC Manufacturing Dept. Ops Manual p. 61 of 66 © 2013 Oveom LLC. All Rights Reserved. Processing & Procedures for Delivery Driver Delivery Process 6. Oveom LLC Manufacturing Dept. Ops Manual p. 62 of 66 © 2013 Oveom LLC. All Rights Reserved. 9. Arrival at the Dispensary 1. 8. Oveom LLC Manufacturing Dept. Ops Manual p. 63 of 66 © 2013 Oveom LLC. All Rights Reserved. Leaving the Dispensary 1. 9. . 15. Oveom LLC Manufacturing Dept. Ops Manual p. 64 of 66 © 2013 Oveom LLC. All Rights Reserved. Apelles LLC Delivery Driver Rules Rules for Safety • • Oveom LLC Manufacturing Dept. Ops Manual p. 65 of 66 © 2013 Oveom LLC. All Rights Reserved. Delivery Rules for Professional Conduct & Product Quality Control • Procedures If Stopped by MPD or Other Law Enforcement • Procedures for Accident 1. . Oveom LLC Manufacturing Dept. Ops Manual p. 66 of 66 © 2013 Oveom LLC. All Rights Reserved. Oveom LLC Manufacturing Dept. Ops Manual p. 67 of 66 © 2013 Oveom LLC. All Rights Reserved. APPENDIX G Apelles LLC Cultivation Center Facilities Department Operations Manual Table of Contents Introduction .......................................................................................................... 6 Apelles LLC Operations Documentation ............................................................................................................. 6 Facilities Department Operations Manual ............................................................................................................ 6 Company Information ............................................................................................ 7 Company Overview .............................................................................................................................................. 7 Mission Statement ................................................................................................................................................ 7 Core Values .......................................................................................................................................................... 8 Keys to Success .................................................................................................................................................... 8 Facility Design .................................................................................................................................................. 10 Apelles Cultivation’s Commercial Kitchen ..................................................................................................... 10 Apelles LLC Product Line ............................................................................................................................... 11 Cultivation Overview ........................................................................................................................................ 11 Facilities Department Staff ............................................................................................................................... 14 General Manager/Senior Horticulturist (Director of Compliance) ................................................... 14 Facilities Manager (if applicable) ....................................................................................................... 15 Product Safety ....................................................................................................... 16 Quality Control for Marijuana Plants .............................................................................................................. 17 “Highly Susceptible Population” ..................................................................................................................... 17 Environmental ................................................................................................................................................... 18 Site Design Features by Environmental Concerns ............................................................................ 18 Clean Room Environment .................................................................................................................. 18 Strict Cleaning and Sanitization Procedures ...................................................................................... 19 Air Filtration ........................................................................................................................................ 20 Destruction process ........................................................................................................................................... 20 Storage & Bulk Packaging ............................................................................................................................... 21 Concentrate ........................................................................................................................................................ 21 Packaging for Dispensaries .............................................................................................................................. 22 Product Tracking ............................................................................................................................................... 22 Food Safety ....................................................................................................................................................... 23 D.C. Food Code ................................................................................................................................................ 23 General Cleanliness & Sanitation Policy ......................................................................................................... 24 Hand Washing ................................................................................................................................................... 25 Hygiene .............................................................................................................................................................. 26 Hand Sanitizer ................................................................................................................................................... 27 Apelles LLC Facilities Dept. Ops Manual, v. p. 2 of 69 © 2013 Apelles LLC. All Rights Reserved. Computerized Maintenance Management System (CMMS) .............................. 28 Site & Equipment .................................................................................................. 30 Signage, Visibility, & Advertising Requirements ........................................................................................... 30 Outdoor Lighting Requirements ...................................................................................................................... 30 Cultivation Daily Checklist .............................................................................................................................. 30 Equipment Troubleshooting .............................................................................................................................. 36 Cultivation Equipment ....................................................................................................................................... 37 Manufacturing Equipment ................................................................................................................................. 39 Manufacturing Equipment ................................................................................................................................. 39 General Facilities & Equipment ....................................................................................................................... 39 Security Related Equipment ................................................................................ 40 Alarm System .................................................................................................................................................... 40 ................................................................................................................................ 42 Lighting ............................................................................................................................................................. 42 Closed-Circuit Video Surveillance (CCTV) .................................................................................................... 42 ......................................................................................................... 46 Access Control System ..................................................................................................................................... 46 .................................................................................................................. 48 Injury & Illness Prevention Program (IIPP) ....................................................... 49 Safety & Health Policy ..................................................................................................................................... 49 Program Objectives .......................................................................................................................................... 49 Company Housekeeping Policy ....................................................................................................................... 49 Responsibility for Safety & Health .................................................................................................................. 49 Program Administration .................................................................................................................................... 49 Management Responsibility .............................................................................................................................. 50 Hazard Assessment Control ............................................................................................................................. 50 Identification of Workplace Hazards ................................................................................................. 50 New Matters ........................................................................................................................................ 50 Employee Reporting of Hazards ........................................................................................................ 50 Documentation of Inspection .............................................................................................................. 50 Monitoring and Correcting Identified Safety and Health Concerns ............................................................... 51 Apelles LLC Facilities Dept. Ops Manual, v. p. 3 of 69 © 2013 Apelles LLC. All Rights Reserved. Newly Discovered Safety & Health Concerns .................................................................................. 51 Hazards Which May Be Harmful ....................................................................................................... 51 Emergencies ....................................................................................................................................................... 51 Company Safety Rules ..................................................................................................................................... 51 Safety Measure .................................................................................................................................................. 51 Exit Signs .......................................................................................................................................................... 52 Fire Exits ........................................................................................................................................................... 52 Fire Extinguishers ............................................................................................................................................. 52 First Aid Kit ...................................................................................................................................................... 52 Flashlights .......................................................................................................................................................... 53 Correct Lifting Procedures ............................................................................................................................... 53 Packing Knife Use ............................................................................................................................................ 53 Ladders .............................................................................................................................................................. 54 Housekeeping Safety Issues ............................................................................................................................. 54 Communicating with Employees on Safety & Health Issues ......................................................................... 54 Training ............................................................................................................................................................. 54 Safety Meetings ................................................................................................................................................ 55 Postings .............................................................................................................................................................. 55 Newsletter .......................................................................................................................................................... 55 Enforcement of the Safety Program ................................................................................................................. 55 Incentive Program ............................................................................................................................................. 55 Disciplinary System .......................................................................................................................................... 56 Hazard Communication Program ..................................................................................................................... 56 General Rules for Working Safely with Hazardous Materials ....................................................................... 56 Hazardous Non-Routine Tasks ........................................................................................................................ 57 General Contractors .......................................................................................................................................... 57 Material Safety Data Sheets (MSDS) .............................................................................................................. 57 Section I -Identity Section .................................................................................................................. 57 Section II -Hazardous Ingredients ...................................................................................................... 57 Section III -Physical/Chemical Characteristics ................................................................................. 57 Section IV -Fire and Explosion Hazard Data .................................................................................... 57 Section V -Reactivity Data ................................................................................................................. 58 Section VI -Health Hazard Data ......................................................................................................... 58 Section VII -Precautions for Safe Handling and Use ........................................................................ 58 Section VIII -Control Measures ......................................................................................................... 58 Location of Material Safety Data Sheets ........................................................................................... 58 Documentation of Material Safety Data Sheets .............................................................................................. 58 Container Labeling ........................................................................................................................................... 59 Emergency and First Aid Procedures .............................................................................................................. 59 Storage ............................................................................................................................................................... 59 Training ............................................................................................................................................................. 60 Emergency Procedures ........................................................................................ 61 Policy ................................................................................................................................................................. 61 Apelles LLC Facilities Dept. Ops Manual, v. p. 4 of 69 © 2013 Apelles LLC. All Rights Reserved. Purpose .............................................................................................................................................................. 61 Structure ............................................................................................................................................................. 61 Emergency Notifications ................................................................................................................................... 61 Emergency Evacuation Plan ............................................................................................................................. 61 Medical Emergencies ........................................................................................................................................ 62 Fires ................................................................................................................................................................... 63 Fire Safety Procedures ........................................................................................................................ 63 Fire Extinguishers ............................................................................................................................... 64 Earthquakes ....................................................................................................................................................... 65 Tornado .............................................................................................................................................................. 67 Hurricane Plan .................................................................................................................................................. 68 Determination Of When To React ...................................................................................................... 68 Stages Of Warning Alertness ............................................................................................................. 68 “Hurricane Season” Procedures .......................................................................................................... 68 Hurricane Advisory Preparations ....................................................................................................... 69 Hurricane Watch Procedures/Gale Force Warnings .......................................................................... 69 Apelles LLC Facilities Dept. Ops Manual, v. p. 5 of 69 © 2013 Apelles LLC. All Rights Reserved. Introduction Apelles LLC Operations Documentation At Apelles Cultivation, rather than having one comprehensive yet unwieldy Operations Manual, each core department (Security, Cultivation, Manufacturing, Facilities) is equipped with a separate Operations Manual that is designed as a one-stop collection of all policies and procedures related to that department’s operations. Having individual department manuals allows staff members to more easily reference operational documentation on an ongoing basis, as well as utilize the manual during the training process. The Security department has an additional Security Management Operations Manual with restricted access for the Security Department Manager and members of upper management only. This is the only core department that has a separate location for department-specific operations documentation. In addition to the individual department Operations Manuals, there is also the Cultivation Center Policy & Procedure (P&P) Manual that lives in the General Manager’s office. It details all company and management level operations, as well as operations documentation for ancillary departments such as Human Resources, Accounting, and Sales & Marketing. Refer to the Apelles Cultivation Operations Reference Set schematic in the Appendix for a onepage view of all operational documentation that resides in the cultivation center. Apelles Cultivation Operations materials are considered confidential company property and may not be taken off the premises by staff members. Facilities Department Operations Manual The Facilities Department is responsible for the overall administration of building operations, maintenance, and housekeeping. The department is responsible for creating and maintaining a CMMS system (Computerized Maintenance Management System) to inventory all aspects of the building including, lights, parts, irrigation, HVAC, office equipment and furniture, security equipment, and so forth. The department is also responsible for researching and managing facilities-related vendors and contractors; implementing and managing systemic equipment checks and repairing or replacing equipment as needed; and developing and maintaining all facility regulatory compliances associated with EOC issues. The Facilities Department Operations Manual contains detailed policies and procedures related to the fulfillment of the above responsibilities. Apelles LLC Facilities Dept. Ops Manual, v. p. 6 of 69 © 2013 Apelles LLC. All Rights Reserved. Company Information Company Overview The single over-arching objective of Apelles Cultivation is to build, operate and grow its cultivation center to become the best example possible of how marijuana can be produced safely and economically under the Act, an example that the government and the people of the District of Columbia demand, deserve and can be proud of. . Mission Statement Apelles Cultivation Center is dedicated to providing the citizens of the District of Columbia with: • Apelles LLC Facilities Dept. Ops Manual, v. p. 7 of 69 © 2013 Apelles LLC. All Rights Reserved. • Core Values Apelles Cultivation believes in: • Keys to Success Important keys to our success include: • Apelles LLC Facilities Dept. Ops Manual, v. p. 8 of 69 © 2013 Apelles LLC. All Rights Reserved. • Apelles LLC Facilities Dept. Ops Manual, v. p. 9 of 69 © 2013 Apelles LLC. All Rights Reserved. Facility Design Apelles LLC’s facility was carefully selected to accommodate a pharmaceutical-grade, cleanroom environment for cultivation. Furthermore, Apelles LLC was careful to identify and select a location that was not previously used as a gasoline station, for automotive repair, or any other activity using chemicals that could cause environmental or operational issues affecting the cultivation of medical marijuana. The proposed facility is equipped, on the interior and exterior, to facilitate incident-free, bulk agricultural manufacturing, product handling, storage, trimming, packaging and shipping. The 5,000 square foot property provides adequate space for safe, medical marijuana cultivation, production, and propagation. A generous amount of buildable space for the contemplated facility design has been carefully divided between distinct processes. The sum of each process area is a cohesive and fluid unit, employing cleanroom standards throughout. Apelles Cultivation’s Commercial Kitchen The heart and center of Apelles Cultivation’s Alternative Dosage Products (ADP) program is our commercial kitchen that utilizes commercial quality ranges, ovens, refrigerators, freezers, Apelles LLC Facilities Dept. Ops Manual, v. p. 10 of 69 © 2013 Apelles LLC. All Rights Reserved. work tables, kitchenware, sanitation equipment, and ware-washing equipment. In addition, our design has been developed to include the locker rooms and dressing areas, hand-washing stations, and toilet facilities that are will assure we are in full compliance with the all of the District’s regulations governing commercial kitchens. Cultivation Overview Cultivating medical marijuana is more than simply planting a seed, watering and watching it grow. Across the United States, there are hundreds if not thousands of cultivation facilities – small and large – operating under a myriad of medical marijuana laws. However, the lack of standardized federal regulation has had a negative impact on the industry. Farming operations exist nationally without standard methods of operation, without concern for the chemicals they are using for nutrients or pest management, and most troubling, without concern for the patient. Apelles LLC wants to break through this stereotype and demonstrate without a doubt to the District of Columbia that the principals take the cultivation of medical marijuana seriously, and have prepared and equipped Apelles LLC well for this task. To be a successful, professional cultivator, careful processes have to established and followed. At Apelles LLC, we look at the growing process not just from seed to harvest, but encompassing the full lifecycle, which we refer to as “Seed to Sale.” Based on our months of research and evaluation of various methods, the advice we have received from industry experts, and input from our own horticulturist, we have designed a unique, proprietary and state-of-theart facility. Apelles LLC Facilities Dept. Ops Manual, v. p. 11 of 69 © 2013 Apelles LLC. All Rights Reserved. Database, and Cultivation Database software has been designed precisely to serve Departmentapproved medical marijuana dispensaries, as described below. Facilities Department Staff Apelles Cultivation Center has a comprehensive staffing plan in place to guide recruitment, hiring, training and managing its employees. Highlights of the plan feature: – Precise definition of responsibilities – Clearly understood chains of authority – Well-paid, well-qualified, well-trained personnel – Professional recruiting practices – Thorough training of new hires Individual job descriptions have been developed for each position in Apelles Cultivation Center’s organization. The purpose is to ensure that all personnel are clear about their role and responsibilities, and to understand how their position contributes to the safe, efficient operation of the center. General Manager/Senior Horticulturist (Director of Compliance) The General Manager (“GM”) oversees the day-to-day operations of our facility, managing security, manufacturing, facilities, cultivation, accounting, sales and marketing, and public relations. He has financial responsibility (P & L) of the operations and is accountable to the corporate officers. The General Manager will provide leadership to all departments throughout the 5,000 squarefoot facility, and he must keep tight control of the senior management-approved budget. Apelles LLC Facilities Dept. Ops Manual, v. p. 14 of 69 © 2013 Apelles LLC. All Rights Reserved. This staff member is ultimately responsible for overall building appearance, cleanliness, comfort, functionality, safety and security. This individual is also responsible for working with the Cultivation Team to develop projected harvests on a timeline and within an approved budget. The General Manager will also need an understanding of scientific principles related to organic cultivation of medical marijuana for the propagation of plants in all stages of growth. The General Manager’s role is to oversee all aspects of the cultivation process from germination to various stages of growth through harvest on an aggressive scale. The General Manager is further responsible for all plant inventories throughout harvest, the dispensing of daily nutrients, quality control and pest-management, all conducted in this state-ofthe-art facility. Finally, this position is ultimately responsible for employees’ strict adherence to the District of Columbia laws concerning medical marijuana in all aspects of propagation, security, inventory control, kitchen facilities and laboratory services. Facilities Manager (if applicable) The Facilities Manager (General Manager may fulfill this role) is responsible for the overall administration of building operations, maintenance, and housekeeping. This position includes responsibility for the development and maintenance of high quality operation standards and facility regulatory compliances associated with EOC issues, and for the development and implementation of policies and procedures and supervision of the Facilities Departments. The position includes creating and maintaining a CMMS system (Computerized Maintenance Management System) to inventory all aspects of the building including, lights, parts, irrigation, HVAC, office equipment and furniture, security equipment (in conjunction with the Security Manager), and so forth. Likewise, the Facilities Manager implements and manages systemic checks for repairs, repairing or replacing equipment as necessary. The position also carries the budget responsibilities of the building to operate under the direction of the General Manager. Apelles LLC Facilities Dept. Ops Manual, v. p. 15 of 69 © 2013 Apelles LLC. All Rights Reserved. Product Safety Overview Product Safety plans are one of the largest and most important roles to be executed in providing high quality medical cannabis to patients. The inexperienced cultivator commonly overlooks most aspects. From the general public’s and patient’s viewpoint, most see at best, that the raw flowers should be tested, although many patients eager to receive their medicine are not even aware of strict testing procedures to confirm organic treatments and the lack of mold, fungus, toxins which can cause additional medical harm to the patient. . Product Safety from Seed to Sale It is important to realize that as in a pharmaceutical environment that is producing pills for patients, the same techniques are used while processing medical cannabis. Combining all aspects from environmental conditions, the ways and processes for touching a plant and its byproducts, all play a role in protecting the patient from any contamination from products created and sold by Apelles LLC This is a communion of clean standards and organic style methodology of cultivation that will provide high quality contamination-free cannabis for patients. Apelles LLC has designed their cultivation center to be this combination of factors including detailed processes for consistency. One of the biggest problems in this industry is that of cultivation centers who are hit or miss. Meaning, they have an excellent quality of medicine one harvest, and then the next is less than mediocre. In order to be a leader in the industry it is the marriage of these aspects, otherwise the only ones that lose are patients. Since patients cannot grow and control their own cannabis medicine, it is the responsibility of the cultivation center to provide consistent medicine repeatedly. The dangers in not providing this environment can mean confusion on dosage or the medicine in the patient’s eyes is simply not working due to inconsistent product. Apelles LLC Facilities Dept. Ops Manual, v. p. 16 of 69 © 2013 Apelles LLC. All Rights Reserved. Keeping tight inventory controls and genetics as part of the system is imperative for continued growth of varieties that patients rely on. Any deviations in processes or environment described herein, can change potency levels by as much as 15%, which will have a dramatic effect on the patient. Apelles LLC has taken great strides to design the facility to accommodate all these factors to ensure consistency in the cultivation, harvesting and manufacturing of medical cannabis products. Here is our plan to accomplish these goals: Quality Control for Marijuana Plants “Highly Susceptible Population” The District’s Food and Food Operations Regulations emphasize the Health Department’s special oversight of food operators who serve residents that may have higher health risks than the general population. These at-risk residents, referred to in Title 25 as the District’s “highly susceptible population,” are defined, generally, as those who are immuno-compromised, aged, very young, or living in a group residential setting. Apelles Cultivation understands and accepts its duty to these District residents. Apelles LLC welcomes Health Department inspections and oversight to help ensure the safety and health of the District’s patients. Apelles LLC Facilities Dept. Ops Manual, v. p. 17 of 69 © 2013 Apelles LLC. All Rights Reserved. Environmental Site Design Features by Environmental Concerns Apelles LLC Facilities Dept. Ops Manual, v. p. 18 of 69 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Facilities Dept. Ops Manual, v. p. 19 of 69 © 2013 Apelles LLC. All Rights Reserved. Food Safety This facility is responsible for the content and quality of any edible food product produced or sold. The District of Columbia requires that any facility that prepares, sells, or dispenses marijuana-infused edible food products must: • Obtain approval from the Department of Health (DOH) Environmental Health Administration: Bureau of Food, Drug, and Radiation Protection (Food Protection Division) prior to production of any edible medical marijuana product. • Ensure that all marijuana-infused edible food products are produced or sold according to applicable requirements in the District of Columbia Food Code. D.C. Food Code In 2003, the Department of Health, which is responsible for overseeing food safety in the District of Columbia, completed a major revision of its food safety regulations. These new regulations incorporated the 1999 federal Food Code, with amendments specific to the District of Columbia. The Department-issued User-Friendly Version of the District of Columbia Food Code has been included as an Addendum to this Operations Manual. It is to be used as an essential companion to this facility’s operations policies and procedures. The Food Code covers regulations regarding: • Management and personnel • Food (receiving, storage, preventing contamination, etc.) • Equipment, utensils, and linens • Water, plumbing, and waste • Physical facilities • Poisonous or toxic materials • Special requirements • Compliance, enforcement, and definitions • Inspectional Guide Occasionally check for updates on the Department of Health website at this link: http://hrla.doh.dc.gov/hrla/cwp/view,a,1385,q,572134.asp Apelles LLC Facilities Dept. Ops Manual, v. p. 23 of 69 © 2013 Apelles LLC. All Rights Reserved. Mouth & Nose – Food employees experiencing persistent sneezing, coughing, or a runny nose that causes discharges from the eyes, nose, or mouth shall not work with exposed food; clean equipment, utensils, and linens; or unwrapped single-service or single-use articles. Hair Restraints – Employees working with food must wear hair restraints such as hats, hair coverings or nets, beard restraints, and clothing that covers body hair, that are designed and worn to effectively keep their hair from contacting exposed food; clean equipment, utensils, and linens; and unwrapped single-service and single-use articles. The wearing of hair restraints does not apply to food employees such as counter staff who only serve beverages and wrapped or packaged foods, hostesses, and wait staff if they present a minimal risk of contaminating exposed food; clean equipment, utensils, and linens; and unwrapped single-service and single-use articles. Hand Sanitizer Per the DC Food Code, a hand sanitizer and a chemical hand sanitizing solution used as a hand dip shall comply with one of the following: • Be an approved drug that is listed in the FDA publication Approved Drug Products with Therapeutic Equivalence Evaluations as an approved drug based on safety and effectiveness; or • Have active antimicrobial ingredients that are listed in: the FDA monograph for OTC (over-the-counter) Health-Care Antiseptic Drug Products as an antiseptic handwash, or the USDA List of Proprietary Substances and Nonfood Compounds, Miscellaneous Publication No. 1419; Additionally it should also comply with one of the following: • Have components that are exempt from the requirements of being listed in the federal food additive regulations as specified in 21 CFR 170.39 − Threshold of regulation for substances used in food-contact articles • Comply with and be listed in: 21 CFR 178 − Indirect Food Additives: Adjuvants: Production Aids, and Sanitizers as regulated for use as a food additive with conditions of safe use, 21 CFR 182 − Substances Generally Recognized as Safe, 21 CFR 184 – Direct Food Substances Affirmed as Generally Recognized as Safe, or 21 CFR 186 – Indirect Food Substances Affirmed as Generally Recognized as Safe for use in contact with food Apelles LLC Facilities Dept. Ops Manual, v. p. 27 of 69 © 2013 Apelles LLC. All Rights Reserved. Computerized Maintenance Management System (CMMS) In order to ensure Apelles Cultivation runs as designed, it is critical that the facility and equipment are in prime working condition and available for use. The failure of one piece of equipment can threaten the entire operation. Given the importance of facilities and equipment management and maintenance, Apelles Cultivation utilizes a Computerized Maintenance Management System (CMMS). . A Computerized Maintenance Management System (CMMS) is a software package that maintains a computer database of information about the organization’s maintenance operations. This information is intended to help the Facilities staff do their jobs more effectively. Here is a list of actions the CMMS allows employees to do: • Determine which equipment requires maintenance • Track maintenance and repair tasks • Determine which storerooms contain the spare parts they need • Calculate the cost of equipment breakdown repair versus preventive maintenance for each piece of equipment (leading to a better allocation of resources) • Verify regulatory compliance. • Produce detailed status reports and summaries of maintenance activities • Record costs • Schedule jobs and preventative maintenance tasks based on maintenance plans and/or meter readings • Identify potential downtime • Provide recommendations for future actions • Record data about equipment and property including specifications, purchase date, expected lifetime, warranty information, service contracts, service history, spare parts and anything else that might be of help to management or maintenance workers. • Inventory control (spare parts, tools, materials, etc.), shipment tracking, etc. Apelles LLC Facilities Dept. Ops Manual, v. p. 28 of 69 © 2013 Apelles LLC. All Rights Reserved. Site & Equipment Signage, Visibility, & Advertising Requirements Apelles Cultivation complies with District law which requires that: • A cultivation center post a sign provided by the Department at all areas of ingress and egress to limited access areas, which reads: “Access to this area is restricted to persons registered with the Department visibly displaying a registration identification card.” • A cultivation center NOT permit medical marijuana or paraphernalia to be visible from any public or other property not owned by the cultivation center. • Advertisements relating to the prices of medical marijuana NOT be displayed in windows of the establishment, on the exterior of any window, or on the exterior or interior of any door. • No sign advertising medical marijuana on the exterior (or visible from the exterior) can be illuminated at any time. Outdoor Lighting Requirements Apelles Cultivation complies with District law which requires a cultivation center, for security purposes, to have sufficient lighting outside of the registered business each day between sunrise and sunset that adequately illuminates the cultivation center and its immediate surrounding area, including storage areas, parking lots, entry areas such as the front façade, and any adjoining public sidewalk. Outdoor lighting must be hooded or oriented so as to deflect light away from adjacent properties. Cultivation Daily Checklist The Cultivation Daily Checklist must be completed every day by a member of the Cultivation management team (or their designate) to ensure quality control in the Cultivation Department. The complete checklist is provided below. : Apelles LLC Facilities Dept. Ops Manual, v. p. 30 of 69 © 2013 Apelles LLC. All Rights Reserved. 1. (name and phone number) 2. (name and phone number) 3. (name and phone number) Apelles LLC Facilities Dept. Ops Manual, v. p. 31 of 69 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Facilities Dept. Ops Manual, v. p. 32 of 69 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Facilities Dept. Ops Manual, v. p. 33 of 69 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Facilities Dept. Ops Manual, v. p. 34 of 69 © 2013 Apelles LLC. All Rights Reserved. Apelles LLC Facilities Dept. Ops Manual, v. p. 35 of 69 © 2013 Apelles LLC. All Rights Reserved. Equipment Troubleshooting Please use this sheet to address problems prior to calling for support. Equipment is checked daily. The Facilities Manager maintains the schedule for estimated date of equipment failure. If following the procedures on this checklist does not resolve the problem, contact the Facilities Manager. Apelles LLC Facilities Dept. Ops Manual, v. p. 36 of 69 © 2013 Apelles LLC. All Rights Reserved. Cultivation Equipment and seedlings to sprout and grow. Apelles LLC Facilities Dept. Ops Manual, v. p. 37 of 69 © 2013 Apelles LLC. All Rights Reserved. Security Related Equipment Apelles LLC Facilities Dept. Ops Manual, v. p. 40 of 69 © 2013 Apelles LLC. All Rights Reserved. Injury & Illness Prevention Program (IIPP) Safety & Health Policy Apelles Cultivation is committed to maintaining a safe and healthful working environment. To achieve this goal, the Company has implemented the following Injury and Illness Prevention Program. Program Objectives Our goal in designing this program is to prevent injuries, illnesses and accidents in the workplace. The primary purpose of the program is to ensure the safety and health of Apelles Cultivation's employees and provide a safe, healthful environment. Company Housekeeping Policy Good housekeeping is an integral part of any effective safety program. Keeping work areas clean reduces the chance of accidents and injuries. Well-organized work areas also increase the ability of employees to perform their jobs efficiently. Responsibility for Safety & Health All employees are responsible for working safely and maintaining a safe, healthful work environment. Program Administration The program is administered by the Apelles Cultivation Facilities Department. The Facilities Department is responsible for the overall implementation and maintenance of Apelles Cultivation's Injury & Illness Prevention Program. Their duties include: – Providing training materials to ensure that managers are trained on workplace safety and are familiar with the safety and health hazards which employees under their immediate direction may be exposed, as well as applicable Company safety rules and policies. – Providing materials for managers to train employees. – Providing the tools necessary to inspect, identify and evaluate workplace hazards on a continuing basis. Apelles LLC Facilities Dept. Ops Manual, v. p. 49 of 69 © 2013 Apelles LLC. All Rights Reserved. – Developing methods to prevent workplace hazards – Correcting workplace hazards in a timely and effective manner. Management Responsibility Managers are responsible for the safety of the employees under their immediate direction. Apelles Cultivation will periodically distribute safety training materials. It is the responsibility of all managers to read and understand this material. When indicated, managers are also responsible to train their employees on the subject matter. Hazard Assessment Control Identification of Workplace Hazards . New Matters Employee Reporting of Hazards Employees are required to immediately report any unsafe condition or hazard they discover in the workplace to their manager, the Facilities Department, or the Security Manager. No employee will be disciplined or terminated for reporting workplace hazards or unsafe conditions. Documentation of Inspection Clean-Up Checklists must be retained by each store for at least three years. Keep a file labeled "Clean-Up Checklists" in your Operations file cabinet. Apelles LLC Facilities Dept. Ops Manual, v. p. 50 of 69 © 2013 Apelles LLC. All Rights Reserved. Emergency Procedures Policy Purpose . Structure Emergency Notifications Emergency Evacuation Plan Apelles LLC Facilities Dept. Ops Manual, v. p. 60 of 69 © 2013 Apelles LLC. All Rights Reserved. 1. Medical Emergencies When notified of a medical emergency in the building determine the following information: • Nature of the emergency, including the cause of the medical emergency, if known. • Exact location and name of the sick or injured person. • Whether an ambulance or Paramedics has been notified. • Whether someone will be standing by at the location where the sick or injured person is located. Paramedics need to be directed to the person requiring aid. If an ambulance or paramedics has not been notified, dial 911 and request medical assistance immediately. Report the following: • Address of Apelles Cultivation • Give all known information on the medical emergency. Provide a callback phone number and wait until the Police or Fire Department hang-up. • Immediately notify your supervisor and other Security personnel on duty, of the emergency and request the following: – That the General Manager and Human Resources be contacted. – That one Security Guard makes preparation for the arrival of the paramedics at the building and floor. – That one Security Guard arranges to meet the paramedics. Inform the Security Console with the actions taken. Do not release information to anyone except your supervisor, who will inform Apelles Cultivation management. Document all actions taken in the Daily Activity Report and Incident Report. Apelles LLC Facilities Dept. Ops Manual, v. p. 62 of 69 © 2013 Apelles LLC. All Rights Reserved. Hurricane Plan It is the objective of this corporation to provide for the safety of its employees and the protection of its assets at the onset of, and prior to, the imminent threat of a hurricane striking within the area of any of our offices that might be affected. Determination Of When To React The Vice President of Operations Facilities (or his designee in his absence) will determine when to react and initiate the procedures outlined within this Plan based upon his evaluation of the threat and the warnings of the National Weather Service as described below. He will alert Division Heads, who in turn, will alert their Managers. Stages Of Warning Alertness • Hurricane Season – June 1 through November 30. • Advisories – Messages containing information regarding the position and movement of a tropical depression, storm, or actual hurricane, which has been spotted by the weather service. These are issued in 6-hour intervals – 6AM, 12AM, 6PM, and 12PM – during Daylight Savings Time. • Bulletins – Updates in between advisories. • Gale Force Warnings – Are issued when winds of 35 to 59MPH are expected. • Hurricane Watch – Warning issued for an area when there is a threat of hurricane conditions within 24 to 36 hours. • Hurricane Warning – Warning that a hurricane will hit a specified area within 24 hours. “Hurricane Season” Procedures At the beginning of each “Hurricane Season” the Security Manager will: • Make sure the following supplies are in the office: – Large heavy-duty plastic bags of sufficient number to cover or contain most office equipment. – Several long rolls of plastic tape to secure bags and tape windows. • Review with the staff what will be done in case a hurricane should threaten or hit. • Facilities Manager will: – Inventory all offices and ensure that they are available and in good condition. Apelles LLC Facilities Dept. Ops Manual, v. p. 68 of 69 © 2013 Apelles LLC. All Rights Reserved. – Perform a drill at the site at the beginning of each season for the purpose of training the maintenance staff in the assembly of the shutters. – Have on hand “visqueen” plastic sheeting and waterproof flashlights with new batteries. • General Manager will: – Designate staff members to be responsible for the specific jobs listed under Hurricane Watch/Warning and post-Hurricane Procedures for the facility. – Review Employee Instructions for Hurricane Procedures. – Review with the Facilities and Maintenance Supervisors their responsibilities. – Review with staff Employee Hurricane Procedures. – In conjunction with Facilities, arrange for the availability of a recording machine, which could repeat a pre-recorded message when attached to the telephone at the main switchboard. – Review prepared messages which, should a hurricane threaten and prevent business, would be broadcast to employees on the company website. Hurricane Advisory Preparations If a hurricane advisory is issued, the Security Manager (or his/her designee) will monitor the news and Emergency Management Bulletins for further advisories and bulletins. Hurricane Watch Procedures/Gale Force Warnings When gale force warnings are issued coincident with hurricane advisories, immediate preparations to secure all offices from damage due to hurricane should begin. It may be prior to a “hurricane watch”. This is to assure the availability of manpower should evacuation be ordered under a hurricane watch or warning. Security personnel will notify those persons on the Management Notification Chart and they in turn will refer to their Office Notification Charts. If this occurs during non-business hours, the persons will be called at their home number shown on the chart. Apelles LLC Facilities Dept. Ops Manual, v. p. 69 of 69 © 2013 Apelles LLC. All Rights Reserved. APPENDIX H Apelles LLC Cultivation Center Security Plan CONFIDENTIAL District of Columbia Dept. of Health. Application for Medical Marijuana Cultivation Center. Copyright rights reserved. SECURITY PLAN CONFIDENTIAL FOR OFFICIAL USE ONLY Table of Contents: Introduction Page 3 Measure 1 Page 4 Compliance with Section 5406.2 Page 7 Compliance with Section 5610 Page 18 Measure 2 Page 27 Measure 3 Page 30 Measure 4 Page 31 Supplemental Documentation (Floor Plan & Site Plan) Page 38 2 Copyright Rights Reserved Introduction ns. Core Security Principles They are: 3 Copyright Rights Reserved MEASURE 1: The applicant’s security plan demonstrates its ability to prevent the theft and diversion of medical marijuana and how the plan will assist with MPD and Department enforcement. Specifically, it shall evidence compliance with all items in §5406.2 and §5610, and include all submittal required under that section. Measure 1 Response: Ability to Prevent Theft . Our People 4 Copyright Rights Reserved Our Security Equipment & Protocols 5 Copyright Rights Reserved Best-Practice Policies & Procedures . Plan to assist MPD and the Department with Enforcement. . 6 Copyright Rights Reserved Compliance with Title 22 of the District of Columbia Municipal Regulations, § 5406.2 (a) Evidence that the space will comply with all security system requirements set forth in §5610 of this subtitle; Response: Apelles Cultivation is committed to complying with the requirements set forth in §5610 of this subtitle. A response detailing Apelles Cultivation’s compliance with this section can be found on page 18 of this plan. (b) A site plan showing the entire structure the cultivation center is housed in, including the street(s), parking lot(s), other tenants within the facility, and any other entities that physically border the cultivation center; Response: Apelles Cultivation has included with this Security Plan a detailed Site Plan demonstrating each of the required elements listed above (see Supplemental Documentations on page 38). (c) A floor plan of the cultivation center detailing the location of the following: (1) All entrances and exits to the cultivation center; (2) The location of any windows, skylights, and roof hatches; (3) The location of all cameras and their field of view; (4) The location of all alarm inputs (door contacts, motion detectors, duress/hold up devices) and alarm sirens; (5) The location of the digital video recorder and alarm control panel; and (6) Restricted and public areas. Response: Apelles Cultivation has included with this Security Plan a detailed Security Floor Plan demonstrating each of the required elements listed above (see Supplemental Documentations, page 38). (d) The type of security training provided for, and completed by, establishment personnel, including: (1) Conflict resolution training and other security training to be provided to staff; and (2) Procedures for handling violent incidents, other emergencies, and calling the Metropolitan Police Department; 7 Copyright Rights Reserved Response: (e) The establishment's procedures for documenting medical marijuana transactions; Response: As required by Section 5901, Apelles Cultivation will keep detailed records of all marijuana transactions using the software. For each sale of medical marijuana, Apelles Cultivation will create duplicate invoices for each transaction that are consecutively numbered. Each invoice will contain the following information: 1. 2. 3. 4. 5. The date of sale to the dispensary. The name, address, and registration number of the dispensary. The form and quantity of medical marijuana and/or paraphernalia in each sale. The price of each item in each sale with the total price. A true, accurate, legible, and complete statement of the terms and conditions on which the sale is made. Apelles Cultivation will systematically file and maintain all invoices and delivery 8 Copyright Rights Reserved slips for a period of four (4) years from the date of delivery. (f) The establishment’s procedures for preventing unregistered businesses from purchasing medical marijuana; Response: (g) How the applicant intends to use and maintain an incident log; Response: Apelles Cultivation will utilize incident logs (will be called an Incident Report) to document the occurrence of specific events. • 9 Copyright Rights Reserved Condition Report Classifications 10 Copyright Rights Reserved • All security conditions listed above should be reported to the General Manager. Followup reports should be submitted concerning any significant developments relating to the condition. Reporting to the Metropolitan Police Department (MPD) In a non-emergency incident or when life/safety is not a concern, security personnel are required to work with the General Manager prior to reporting a relevant security incident to the police. Any incident involving lost or stolen medicine must be reported to the Metropolitan Police Department via a police report. All reports must be made within 24 hours of becoming aware of the theft or loss. To notify the MPD, do one of the following: Call 911. File in-person with the Police District where Apelles Cultivation is located. Submit a written report to the Police District where Apelles Cultivation is located. . 11 Copyright Rights Reserved (h) The establishment’s procedures for preventing the use of medical marijuana on the registered premises; Response: Apelles Cultivation will prohibit the consumption of medical marijuana on registered premises. . (i) The number and location of cameras used by the establishment; Response: Apelles Cultivation intends to install high-quality security cameras throughout the cultivation facility. 12 Copyright Rights Reserved (j) Security measures taken by the applicant to prevent individuals from entering the limited access area portion of the registered premises; Response: 13 Copyright Rights Reserved Equipment Preventing Access 14 Copyright Rights Reserved (k) The applicant’s closing procedures after the cessation of business each day; Response: (l) The applicant’s plan to prevent theft or the diversion of medical marijuana, including maintaining all medical marijuana in a secure, locked room that is accessible only to authorized persons; Response: 15 Copyright Rights Reserved Should any medical marijuana be identified as lost or stolen, Apelles Cultivation will report this to MPD by filing a police report with the 5th Police District (1805 Bladensburg Rd., NE Phone: (202) 698-0150) within twenty- four hours of becoming aware of the theft or loss. (m) The type of alarm system and outdoor lighting to be used by the applicant; Response: y. (n) 16 The applicant’s transportation plan for delivering medical marijuana from the Copyright Rights Reserved cultivation center to dispensaries. Response: Apelles Cultivation has developed a detailed plan for delivering medical marijuana from the cultivation center to registered dispensaries. The Apelles LLC transportation plan can be found on page 31, in Response to Measure 4. 17 Copyright Rights Reserved Compliance with Final Rulemaking For Medical Marijuana, §5610 A dispensary or cultivation center shall be required to operate and maintain in good working order a twenty-four (24) hour, seven (7) days a week, a closed-circuit television (CCTV) surveillance system on the premises that complies with the following minimum standards: (a) Visually records and monitors all building entrances and exits, all parking lot areas, rear alley areas immediately adjacent to the building, and covers the entire inside of the facility, including all limited access areas, and including all areas where medical marijuana is cultivated, stored, dispensed, or destroyed. Fixed cameras shall be installed to provide a consistent recorded image of these areas. The cultivation center or dispensary shall instruct the company or individuals installing the surveillance cameras to maximize the quality of facial and body images and to avoid backlighting and physical obstructions; Response: 18 Copyright Rights Reserved 19 Copyright Rights Reserved (b) Cameras installed outdoors and in low-light interior areas shall be day/night cameras with a minimum resolution of six hundred (600) lines per inch (analog) or D1 (IP) and a minimum light factor requirement of seven-tenths (0.7) LUX. The installation of additional lighting may be required to increase picture clarity and brightness. Cameras shall be calibrated and focused to maximize the quality of the recorded image; Response: 20 Copyright Rights Reserved (c) The recording device shall be a digital video recorder that meets the following minimum standards: (1) Displays a date and time stamp on all recorded video; and (2) Can produce a video disc (CD/DVD) directly from the DVR unit using an installed media recording drive. The video on the disc shall be viewable on any Windows PC, and include any required player software on the disc. Response: (d) A display monitor with a minimum screen size of twelve inches (12 in.) inches shall be connected to the electronic recording security system at all times; Response: 21 Copyright Rights Reserved (e) Electronic recording security systems are required to be maintained in good working order at all times. The owner of a cultivation center or dispensary shall instruct each manager, employee, or agent overseeing the functioning of the video recording security system to immediately report any malfunctioning or technical problems with the system; Response: (f) Security recordings shall meet the following minimum requirements: (1) The recorded image resolution shall be at least D1; and (2) The recorded image frame rate shall be at least three frames per second during alarm or motion-based recording. Response: (g) 22 Security recordings shall be retained by the cultivation center or dispensary for a minimum of thirty (30) days. The recording system for the security cameras must be located in a locked, tamper-proof compartment. A cultivation center or dispensary Copyright Rights Reserved shall be prohibited from taping over existing security video from the last thirty (30) days; Response: (h) Upon request, the recording shall be turned over to MPD or the Department. Response: A dispensary or cultivation center shall install, maintain, and use a professionally monitored robbery and burglary alarm system; which meet the following requirements: (a) The control panel shall be a UL listed burglar alarm control panel; Response: (b) The system shall report to a UL listed central monitoring station; Response: 23 Copyright Rights Reserved (c) A test signal shall be transmitted to the central station every twenty-four (24) hours; Response: Every twenty-four (24) hours, Apelles Cultivation will transmit a test signal to the central station to ensure the system is working properly. (d) At a minimum, the system shall provide coverage of all facility entrances and exits, rooms with exterior windows, rooms with exterior walls or walls shared with other facility tenants, roof hatches, skylights, and storage room(s) that contain safe(s); Response: 24 Copyright Rights Reserved m 25 Copyright Rights Reserved . (e) The system shall include at least one (1) holdup alarm for staff use; Response: (f) The system shall be inspected and all devices tested annually by a qualified alarm vendor. Response: The security system will be inspected and all devices tested by proper functioning. to ensure A dispensary or cultivation center shall maintain for a period of three (3) years reports of incidents that triggered an alarm. Such reports shall be made available to the Department during any inspection of the facility. A dispensary or cultivation center shall notify the Department by electronic means within twentyfour (24) hours of any incident in which a theft, burglary, robbery, or break in occurred, whether or not items were actually removed from the facility. The facility manager shall follow up the initial notice with a written report describing in detail the factual circumstances surrounding the incident and include an inventory of all stolen items, if applicable. Response: 26 Copyright Rights Reserved MEASURE 2: The applicant demonstrates that its plan for record keeping, tracking and monitoring inventory, quality control and security and other policies and procedures that will discourage unlawful activity. It also describes the applicant’s plan to coordinate with and dispose of unused or surplus medical marijuana with MPD. Measure 2 Response: 27 Copyright Rights Reserved ¾ Tracking and Monitoring Inventory 28 Copyright Rights Reserved 29 Copyright Rights Reserved MEASURE 3: The applicant’s security plan shall describe the enclosed, locked facility that will be used to secure or store medical marijuana, including when the location is closed for business, and its security measures, and the steps taken to ensure that medical marijuana is not visible to the public. Measure 3 Response: 30 Copyright Rights Reserved MEASURE 4: The applicant shall describe its transportation plan regarding how the cultivation center intends to safely and securely deliver medical marijuana to registered dispensaries. Measure 4 Response: s. 31 Copyright Rights Reserved 32 Copyright Rights Reserved 33 Copyright Rights Reserved 34 Copyright Rights Reserved 35 Copyright Rights Reserved 7. l 36 Copyright Rights Reserved 37 Copyright Rights Reserved C. 38 Copyright Rights Reserved SUPPLEMENTAL DOCUMENTATION SECURITY FLOOR PLANS & SITE PLAN See the following pages for detailed plans (please note, diagrams are not to scale). 39 Copyright Rights Reserved 40 Copyright Rights Reserved 41 Copyright Rights Reserved APPENDIX I This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX J This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX K Apelles LLC Cultivation Center Business Plan Apelles LLC Business Plan TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY .......................................................................................................... 4 1.1 Overview .................................................................................................. 4 1.2 Our Mission Statement............................................................................ 4 1.3 Core Values ............................................................................................. 5 Chart 1: Financial Highlights.................................................................................................................. 5 Table 1: Sources and Uses ................................................................................................................... 6 Table 2: Income Statement (projected Revenue and Expenditures During Years 1-5 of Operation) ....................................................................................................................................................... 7 1.4 Objective .................................................................................................. 7 2.0 ORGANIZATION SUMMARY .................................................................................................. 9 2.1 Legal Entity ........................................................................................................................................... 9 3.0 CULTIVATION SUMMARY .................................................................................................... 10 3.1 Cultivation Overview.............................................................................. 10 Figure 1: Apelles Cultivation Flow....................................................................................................... 11 3.2 Facility Overview ................................................................................... 12 3.3 Cultivation Methodology........................................................................ 13 Table 2: Initial Propagation by Week .................................................................................................. 14 Table 3: Staggered Growth in Compliance with 95 Plant .................................................................. 15 3.4 Additional Cultivation Processes .......................................................... 16 3.5 Pest Management Overview ................................................................. 16 3.6 Pest Management Processes ............................................................... 17 3.7 Potential Expansion............................................................................... 18 Figure 2: Apelles Cultivation Design including Expansion ................................................................ 19 3.8 Product Quality & Assurance ................................................................ 21 3.9 Organic Cultivation ................................................................................ 22 Table 4: Organic Products ................................................................................................................... 24 3.10 Environmental Standards ................................................................... 28 Apelles Cultivation Business Plan p. 1 of 60 4.0 PREPARATIONS ................................................................................................................... 31 4.1 Preparations Philosophy ....................................................................... 31 4.2 Quality Genetics (Strains) Proven Effective for the List of Qualifying Conditions 31 Table 5: Listing of Initial Sensi Strains to be Cultivated at Apelles LLC ........................................... 32 Table 6: Second Round of Sensi Strains - Introduced after six (6) months in rotation cycle .......... 32 4.3 Product Quality ...................................................................................... 32 Table 7: Product Line ........................................................................................................................... 34 4.4 Eco-Friendly Cultivation ........................................................................ 34 5.0 CULTIVATION EDUCATION AND TRAINING ..................................................................... 35 5.1 Training ............................................................................................................................................... 35 6.0 ADP’S (ALTERNATIVE DOSAGE PRODUCTS – NON-SMOKABLE PRODUCTS) .......35 6.1 Overview ............................................................................................................................................. 35 7.0 MARKET ANALYSIS ............................................................................................................. 37 7.1 Industry Analysis................................................................................................................................. 37 Table 8: Market Build ........................................................................................................................... 41 Table 9: Common Conditions .............................................................................................................. 42 Table 10: Patient Information .............................................................................................................. 42 8.0 STRATEGY AND IMPLEMENTATION SUMMARY ............................................................. 42 8.1 SWOT Analysis ................................................................................................................................... 42 9.0 OPERATIONS AND FACILITY INFORMATION ................................................................... 46 9.3 Facility Design .................................................................................................................................... 47 9.4 Cultivation Equipment ........................................................................................................................ 48 10.0 MANAGEMENT AND ORGANIZATION ............................................................................. 49 10.1 Executive Team ................................................................................................................................ 49 10.4 Personnel Plan ................................................................................................................................. 54 Figure 3: Organization Chart for Year 1.............................................................................................. 55 11.0 FINANCIAL PLAN ................................................................................................................ 57 11.1 Important Assumptions .................................................................................................................... 57 Apelles Cultivation Business Plan p. 2 of 60 11.2 Table 11: Projected Income Statement- First 6 Months ................... 57 11.3 Table 12: Projected Income Statement- Years 1-5 ........................... 58 11.4 Table 13: Projected Balance Sheet - Years 1-5 ........................................................................ 59 11.5 Table 14: Projected Cash Flow Statement - Years 1-5 ................................................................. 60 Apelles Cultivation Business Plan p. 3 of 60 1.0 EXECUTIVE SUMMARY 1.1 Overview Apelles LLC is a Delaware Limited Liability Company, hereinafter also referred to as “Apelles Cultivation” for purposes of this application. 1.2 Our Mission Statement Apelles Cultivation Business Plan p. 4 of 60 1.3 Core Values The Apelles Cultivation Core Values are: • Chart 1: Financial Highlights The financial statements in the business plan (summarized below) satisfy the financial reporting requirements as follows. More detailed financial information can be found in Sections 7.2 and 11.0. Application Requirements (Measure 1) Relevant Financial Statement a. The applicant shall provide a business plan that describes how the cultivation center will operate on a long-term basis. b. This shall include the applicant providing a detailed description about the amount and source of the equity and debt commitment for the proposed cultivation center that demonstrates the immediate and longterm financial feasibility of the proposed financing plan. Projected Income Statements: Projected Revenue and Expenditures During First 6 Months, Page 60 & Projected Revenue and Expenditures during Years 1-5 of Operation, Page7 Sources Column for Years 1 and 2 on Sources and Uses Statement, Page 6 c. The r e l a t i v e a v a i l a b i l i t y o f f u n d s f o r capital and operating needs. Operating Working Capital on Projected Balance Sheet – Years 1-5 of Operation, Page 62 d. The financial capability to undertake the project. Projected Cash Flow Statement during Years 1-5 of Operation, Page 63 Additional financial statements substantiating ongoing viability of Apelles Cultivation. Apelles Cultivation Business Plan the Section 7.2 (Market Build) and Section 11 (Financial Plan) p. 5 of 60 Table 1: Sources and Uses Apelles Cultivation Business Plan p. 6 of 60 Table 2: Income Statement (projected Revenue and Expenditures During Years 1-5 of Operation) Sales Drivers 2014 2015 2016 2017 2018 Income Statement 2014 2015 2016 2017 2018 1.4 Objective Apelles Cultivation Business Plan p. 7 of 60 1.5 Keys to Success Important keys to our success include: • Apelles Cultivation Business Plan p. 8 of 60 2.0 ORGANIZATION SUMMARY 2.1 Legal Entity Apelles, LLC is a Delaware Limited Liability Company, governed by its Managing Member, Joseph Raaen. 2.2 Startup Summary The following are some of the notable milestones and accomplishments achieved thus far: • Apelles Cultivation Business Plan p. 9 of 60 3.0 CULTIVATION SUMMARY 3.1 Cultivation Overview Apelles LLC’s approach and methods are set forth below (Please refer to Figure 1: Apelles Cultivation Flow). • Apelles Cultivation Business Plan p. 10 of 60 Figure 1: Apelles Cultivation Flow • • Apelles Cultivation Business Plan p. 11 of 60 • 3.2 Facility Overview Apelles LLC has dedicated Apelles Cultivation Business Plan p. 12 of 60 3.3 Cultivation Methodology Apelles Cultivation Business Plan p. 13 of 60 Apelles Cultivation Business Plan p. 14 of 60 Apelles Cultivation Business Plan Table 3: Staggered Growth in Compliance with 95 Plant p. 15 of 60 3.4 Additional Cultivation Processes Apelles Cultivation Business Plan p. 16 of 60 Apelles Cultivation Business Plan p. 17 of 60 3.7 Potential Expansion Apelles Cultivation Business Plan p. 18 of 60 nsion. Apelles Cultivation Business Plan p. 19 of 60 Apelles Cultivation Business Plan p. 20 of 60 3.8 Product Quality & Assurance Apelles Cultivation Business Plan p. 21 of 60 Apelles Cultivation Business Plan p. 22 of 60 Apelles Cultivation Business Plan p. 23 of 60 Apelles Cultivation Business Plan p. 24 of 60 Apelles Cultivation Business Plan p. 25 of 60 Apelles Cultivation Business Plan p. 26 of 60 : Apelles Cultivation Business Plan p. 27 of 60 Apelles Cultivation Business Plan p. 28 of 60 • Apelles Cultivation Business Plan p. 29 of 60 Apelles Cultivation Business Plan p. 30 of 60 4.0 PREPARATIONS 4.1 Preparations Philosophy 4.2 Quality Genetics (Strains) Proven Effective for the List of Qualifying Conditions Apelles Cultivation Business Plan p. 31 of 60 Table 5: 4.3 Product Quality Apelles Cultivation Business Plan p. 32 of 60 Apelles Cultivation Business Plan p. 33 of 60 Edibles Edibles are foods cooked 4.4 Apelles Cultivation Business Plan p. 34 of 60 5.0 CULTIVATION EDUCATION AND TRAINING 6.0 ADP’S (ALTERNATIVE DOSAGE PRODUCTS – NON-SMOKABLE PRODUCTS) 6.1 Overview Apelles Cultivation Business Plan p. 35 of 60 Apelles Cultivation Business Plan p. 36 of 60 7.0 MARKET ANALYSIS 7.1 Industry Analysis Apelles Cultivation Business Plan p. 37 of 60 Apelles Cultivation Business Plan p. 38 of 60 • Ill . Apelles Cultivation Business Plan p. 39 of 60 . 7.2 Washington, DC Market Apelles Cultivation Business Plan p. 40 of 60 Table 8: Market Build The Market Poses Barriers to Patients 7.3 Market Segmentation / Customer Profile Apelles Cultivation Business Plan p. 41 of 60 Table 9: Common Conditions Table 10: Patient Information 8.0 STRATEGY AND IMPLEMENTATION SUMMARY 8.1 SWOT Analysis The SWOT analysis provides us with an opportunity to examine the internal strengths and weaknesses Apelles Cultivation must address. It also allows us to examine the opportunities presented to Apelles Cultivation as well as potential threats that lie beyond the center’s control. 8.1.1 Strengths The following strengths are internal to Apelles Cultivation: • Apelles Cultivation Business Plan p. 42 of 60 8.1.2 Weaknesses The following weaknesses are internal to Apelles Cultivation: • time. 8.1.3 Opportunities The following are opportunities Apelles Cultivation can leverage that lie outside of its organization or control: • 8.1.4 Threats The following factors represent potential threats that lie outside Apelles Cultivation’s organization and control. • . Apelles Cultivation Business Plan p. 43 of 60 8.2 Marketing and Sales 8.2.1 Branding and Positioning 8.2.2 Competition 8.2.3 Pricing Strategy Apelles Cultivation Business Plan Apelles Cultivation Center. Application for Operation. Catalog of Appendices. June 21, 2013. p. 44 of 60 100 8.2.4 Marketing Objectives 8.2.5 Marketing / Promotional Strategy Apelles Cultivation Business Plan p. 45 of 60 9.0 OPERATIONS AND FACILITY INFORMATION 9.1 Operations Overview 9.2 Location / Facility 9.2.1 Site Selection Apelles Cultivation Business Plan p. 46 of 60 9.3 Facility Design Apelles Cultivation Business Plan p. 47 of 60 9.4 Cultivation Equipment Apelles Cultivation Business Plan p. 48 of 60 • 10.0 MANAGEMENT AND ORGANIZATION 10.1 Executive Team The Apelles advisory and consulting team is comprised of experienced managers, lawyers, doctors, policy experts, community organizers, and security professionals. The team includes some of the most knowledgeable and seasoned figures in the marijuana industry, each intensely dedicated to making medical marijuana available to those who need it most and in compliance with the law. While many positions have been contracted for, roles must still be filled. Apelles LLC is currently conducting an intense round of interviews of candidates to participate in management and advising roles in anticipation of being awarded a cultivation license. Upon success, Apelles LLC will formally engage the most highly qualified candidates for each position. Apelles Cultivation Business Plan p. 49 of 60 Apelles Cultivation Business Plan p. 50 of 60 10.2 Advisory Board Apelles Cultivation Center has established an Advisory Board to provide support to Apelles LLC’s Managing Member. Apelles Cultivation Business Plan p. 51 of 60 Apelles Cultivation Business Plan p. 52 of 60 1. Apelles Cultivation Business Plan p. 53 of 60 10.3 Professional Support Team 10.4 Personnel Plan 10.4.1 General Philosophy Apelles Cultivation has a comprehensive staffing plan in place to guide recruitment, hiring, training and managing its employees. Highlights of the plan feature: • Precise definition of responsibilities • Clearly understood chains of authority • Well-paid, well-qualified, well-trained personnel • Professional recruiting practices • Thorough training of new hires Apelles Cultivation Business Plan p. 54 of 60 10.4.2 Organization The following chart shows how the center’s current management structure is organized. 10.4.3 Recruitment Apelles Cultivation’s recruiting efforts will be primarily directed at candidates with the following qualifications: • Health-related educational/professional backgrounds • Interest and aptitude for the healing arts • Spotless criminal records • Experience in restricted access retail venues 10.4.4 Training Qualified candidates will be hired on a three-month probationary status. During this period, they will participate in a rigorous training process, and be evaluated for suitability in a restricted-access medical environment. Training will include the employee handbook, other reading materials, lectures by qualified professionals, hands-on training and quizzes. The program will consist of the following modules: Apelles Cultivation Business Plan p. 55 of 60 Legal – Legal training will cover all Washington, DC state and federal laws relating to marijuana, and especially those related to medical marijuana. Legal obligations of licensed marijuana dispensaries will be emphasized. Other topics will include the rules and regulations of the cultivation center, sexual harassment training, effective interaction with law enforcement personnel, and the rights and responsibilities of medical marijuana patients. Legal training will include at least one two-hour session with an attorney who is a practicing member of the state bar. Medical – Medical training will include disabled rights and sensitivity, how to identify and interact with a patient having a medical emergency, the proper uses and benefits of medical marijuana, and an introduction to the other medical treatments offered by Apelles Cultivation. Safety – In addition to its focus on safety, security training will include acceptable currency identification and counterfeit detection, warning signs of possible diversion to the illegal market, lock and alarm procedures, perimeter and entrance control, robbery response techniques, conflict resolution techniques and diversion detection techniques. 10.4.5 Personnel Individual job descriptions have been developed for each position in Apelles Cultivation’s organization. The purpose is to ensure that all personnel are clear about their role and responsibilities, and to understand how their position contributes to the safe, efficient operation of the center. Positions addressed include the following: • Director of Compliance/General Manager. Oversees the entire facility operation and ensures that the cultivation center successfully delivers on its mission, business objectives and compliance with District of Columbia law. • Security Manager. Monitors all areas of operations to ensure safety of staff, operations, neighbors and compliance with the law. • Senior Chemist. Oversees all testing of raw flowers, concentrates and edibles for potency, mold, mycotoxins, and fungus, and provides a cannabinoid profile for all products and labels in conformance with Apelles LLC’s quality assurance protocols and the District’s regulations. • ADP Technician. Oversees all processing of concentrates and processing of all Alternative Dosage Products, including edibles, drinks, lozenges and topical creams. This position is also Apelles LLC’s Certified Food Protection Manager (in accordance with the District’s Food and Food Operations Regulations), oversees the safety and quality control of the kitchen and the manufacturing of these products. • Inventory Control Supervisor. Oversees the inventory, disposition and order fulfillment of our medical marijuana after harvest, and our marijuana-enhance products, to ensure that all of our protocols for product safety, packaging, bulk storage, retail packaging, and labeling are being followed. Responsible for generating and auditing all inventory control data input and report generation. Apelles Cultivation Business Plan p. 56 of 60 11.0 FINANCIAL PLAN 11.1 Important Assumptions Because Apelles Cultivation does not yet have an operational history, management has made its best estimate based on information available. Actual performance for the Apelles Cultivation will vary. Sources of Capital Table 11: Projected Income Statement- First 6 Months Apelles Cultivation Business Plan Apelles Cultivation Business Plan p. 56 of 60 11.3 Table 12: Projected Income Statement- Years 1-5 3 Apelles Cultivation Business Plan p. 58 of 60 11.4 Table 13: Projected Balance Sheet - Years 1-5 Apelles Cultivation Business Plan p. 59 of 60 11.5 Table 14: Projected Cash Flow Statement - Years 1-5 Apelles Cultivation Business Plan p. 60 of 60 APPENDIX L This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX M APPENDIX N This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX O This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section. APPENDIX P This Appendix does not contain any supporting documentation. Please refer to the Application Responses Section.
