Take Our Quiz to Find Out if You May Qualify for Social Equity

Posted by Zachary Tucker on June 13, 2019
 

Retail Cannabis Licensing Draft Ordinance Heads to L.A. City Council

Posted by Margolin & Lawrence on June 4, 2019

On Tuesday, May 28, the Los Angeles City Attorney Michael Feuer filed a draft ordinance regarding retail cannabis licensing.

Not a Hallucination: Oakland Moves Closer to Legalizing Mushrooms

Posted by Margolin & Lawrence on May 31, 2019

While much of California continues to break boundaries on legalizing cannabis, Oakland is poised to follow in Denver’s footsteps in bringing a different substance to the mainstream: natural psychedelics.

California Ready to Embrace Hemp-Derived CBD in Foods and Supplements

Posted by Margolin & Lawrence on May 28, 2019

 

Opportunity for Potential Investors to Join Pending Phase II Licenses

Posted by Raza Lawrence on May 17, 2019

 

Governor Releases Revised State Budget, Statutory Changes Affecting Cannabis in California

Posted by CA NORML Guest Blog on May 13, 2019

 

Delivery Update: Bay Area Cities

Posted by Margolin & Lawrence on May 8, 2019

Many jurisdictions across California allow cannabis to be sold at brick-and-mortar retail stores and dispensaries, while many either ban or severely restrict storefront sales. But what is the legal status of cannabis delivery businesses – operations that sell medical or adult-use cannabis to customers, but operate only on a delivery basis?

As they present a unique category of cannabis activity, delivery-only businesses are treated differently than storefront retail, which often means they use a separate application process as well. Here's the status of delivery-only cannabis retail in the largest cities in the Bay Area:

San Jose

San Jose allows cannabis businesses and collectives to delivery cannabis, but applications are currently closed.
 
San Francisco
San Francisco allows delivery-only cannabis retail. Applications are currently open for equity applicants and equity incubators (a business that agrees to support an equity applicant by providing it with rent-free space or technical assistance.)
 
Oakland
Oakland allows delivery-only dispensary operations. Applications are currently open, but while there is no cap on the total number of permits that can be granted, the city will give at least half of all permits to equity businesses.
 
Stockton
Applications are currently open for delivery businesses, with no limit on the amount of permits to be granted.
 
Fremont
Fremont currently bans cannabis delivery.
 
Modesto
Modesto currently bans cannabis delivery.
 
Santa Rosa
Santa Rosa allows cannabis delivery. Starting June 3, 2019, the city will be accepting Conditional Use Permit applications for new Cannabis Retail on a first come, first served, first complete basis. The online portal to schedule an application will open on May 20.
 
Hayward
Hayward allows cannabis delivery. Applications are currently closed, but the city plans to begin a new Request For Proposals process after the review of the previous round is complete ("6 to 12 months following the conclusion of the Tier 2 review.")
 
Sunnyvale
Sunnyvale currently bans cannabis delivery.
 
Concord
Concord allows delivery of medicinal cannabis to qualified patients from licensed cannabis retail businesses located outside of Concord, but is not granting delivery permits.
 
Santa Clara
Santa Clara has established a cannabis tax rate and considered allowing commercial cannabis activity, but the city currently has a ban on all commercial cannabis business in place which may be extended through June 2020.
 
Vallejo
Vallejo is not currently accepting applications for cannabis delivery licenses.
 
Berkeley
Berkeley currently bans delivery-only cannabis retail.
 
Fairfield
Fairfield currently bans all cannabis activity, including delivery.
 
Richmond
Richmond allows cannabis delivery by dispensaries, but the city has already granted its maximum number of retail permits. 
 
Antioch
Antioch is currently accepting applications for cannabis retail delivery. There is no deadline or limit on the amount of permits to be granted, but the zoning restrictions on retail cannabis businesses may limit the number of eligible locations. 
 
Daly City
Daly City has established a cannabis tax rate and considered allowing commercial cannabis activity, but the city currently has a moratorium on commercial cannabis business that will last until December 11, 2019.
 

LA Phase 3 Major Updates

Posted by Margolin & Lawrence on May 2, 2019

NEW PHASE 3 LEGISLATION APPROVED BY CITY COUNCIL

On April 30th, the Los Angeles City Council approved new legislation to begin the third and final Phase of cannabis licensing within the City of Los Angeles no later than the end of next month.

Phase 3 will include two rounds of applications for Storefront Retailer Licenses in addition to one round of applications for Non-Storefront (i.e., Delivery) Retailer Licenses.

Priority will be given to Tier 1 and Tier 2 Social Equity Applicants for all three rounds. Additionally, each round will operate on a first-in-time rule. In other words, the first application submitted will be given priority over succeeding applications with premises within 700 feet of the property. Licenses will be issued on a first-come-first-serve basis.

 

 

 

PHASE 3: ROUND 1, ROUND 2, & DELIVERY PILOT PROGRAM

The upcoming Phase of cannabis licensing will give priority to applicants under the Social Equity Program, a program designed to provide reparations to individuals who have been disproportionally impacted by the war on drugs. Social Equity Applicants will receive expedited application review among other benefits through the program. Eligible applicants in the program will be classified as either Tier 1 or Tier 2 applicants, depending on the criteria they meet. To qualify for Tier 1 or Tier 2 Applicant status, individuals must have lived in a Disproportionately Impacted Area (DIA) for a minimum amount of time and cannot own an Existing Medical Marijuana Business (EMMB). The City of Los Angeles has listed a set of zip codes that currently qualify as DIAs. The City announced that it may add additional zip codes to this list in the future.

ROUND 1 (STOREFRONT RETAIL LICENSING)

After all Tier 1 and Tier 2 Applicants have been verified and notified by the DCR, the DCR will begin accepting applications for Round 1 of Phase 3. Only verified Tier 1 or Tier 2 Social Equity Applicants will be eligible to submit an application during Round 1. Applicants must submit all required documents (see table) within a 14-day period to be announced by the DCR. The dates of the 14-day period have not yet been identified, but the City Council has ordered the DCR to begin this period no later than September 3, 2019. The DCR will distribute 100 licenses during Round 1 to the first 75 eligible Tier 1 Applicants and the first 25 eligible Tier 2 Applicants. Verified Tier 1 or Tier 2 Applicants can only apply for one license during Round 1.

ROUND 2 (STOREFRONT RETAIL LICENSING)

Following the 14-day period of Round 1, the DCR will host a second round of Storefront Retail License application processing. Round 2 will only accept applications from verified Tier 1 and Tier 2 Applicants, just as in Round 1. For the second round of application processing, the DCR will accept applications during a 30-day period that has yet to be determined. Specific documents will be due within the 30-day application period, while all additional documents will be due within 90 days (see table). The first 150 eligible applicants will be issued licenses. The DCR may issue additional licenses until each Community Plan Area (CPA) has reached Undue Concentration. Tier 1 or Tier 2 Applicants who were issued a license during Round 1 may not apply for a license in Round 2. 

DELIVERY PILOT PROGRAM (NON-STOREFRONT RETAIL LICENSING)

The DCR has announced that it will launch a Delivery Pilot Program, where it will issue Non-Storefront Retail (i.e., Delivery) Licenses to the first 60 eligible applicants. The Delivery Pilot Program will accept applications from verified Tier 1 and Tier 2 Applicants as well as General Applicants. The DCR announced that delivery will be restricted to addresses within City limits unless special permission is granted by the DCR. 

 

 

 

  

PRE-VETTING PROCESS FOR SOCIAL EQUITY APPLICANTS

Applicants that qualify as Tier 1 or Tier 2 Social Equity Applicants must submit a preliminary application along with supporting documents to the Department of Cannabis Regulation (DCR) in order to have their Tier 1 or 2 status verified. The Ordinance voted into law yesterday identifies an unspecified 60-day period in which these preliminary applications will be received. Although the exact dates of the application window have yet to be determined, the City Council approved a motion ordering that the 60-day period begin no later than May 28, 2019. The DCR will not accept applications or supporting documents after the 60-day period. After the 60-day period ends, the DCR will determine whether or not applicants are verified as Tier 1 or Tier 2 applicants and notify all applicants of their final, non-appealable decision prior to the beginning of the Phase 3 Round 1 application window.

 

 

Cracking Down on Compliance

Posted by Margolin & Lawrence on April 30, 2019

     

     Operational compliance has become paramount to the success of many cannabis businesses following new state regulations that went into effect earlier this year.  For others, non-compliance has been a great downfall. Following the legalization of commercial cannabis, the state of California hastily drafted and passed emergency regulations which outlined licensing and operational requirements for cannabis businesses under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). These emergency regulations went into effect in December of 2017 to provide a temporary solution for the lack of cannabis legislation until more thorough regulations could be drafted and adopted by state agencies. Just three months ago, the Office of Administrative Law (OAL) approved new regulations which were immediately adopted by all three state licensing agencies. The new regulations include many significant changes from the previous emergency regulations and introduce more restrictive guidelines for cannabis businesses. Further, the new regulations define serious implications for businesses who violate the new guidelines – from fines up to $250,000 to loss of licensure. In recent months, a rapid number of compliance enforcement agencies have emerged at both the local and state level. Licensed cannabis businesses in California have experienced a peak in random compliance inspection visits, raids from local and state law enforcement, and seizure of cannabis products. With the commercial cannabis industry now in full effect, local and state agencies are beginning to focus less on setting the framework for the industry and more on enforcement of regulations.

A majority of licensed cannabis businesses are in some way in violation of current regulations despite their intentional efforts to comply. This is largely due to the cumbersome location-dependent nature of cannabis regulations. Although cannabis is legal in the state of California, commercial cannabis businesses are still federally illegal, and there is no federal legislation governing the licensing and operational compliance of cannabis businesses. As a result, cannabis regulations vary between states. Further convoluting the concept of cannabis compliance, regulations also vary within-state and are dependent on legislation issued by local authorities. All California cannabis businesses must adhere to statewide regulations enforced by the three state agencies – the Bureau of Cannabis Control (BCC), the California Department of Public Health (CDPH), and the California Department of Food and Agriculture (CDFA)  – in addition to guidelines enforced by local agencies. For instance, outdoor cultivation is legal at the state level per the CDFA, but it is prohibited within the City of Los Angeles per the local Department of Cannabis Regulation (DCR). Cannabis businesses must also comply with local Fire Department safety codes which also vary by jurisdiction.

With compliance enforcement on the rise, it is crucial for all cannabis businesses to stay informed about both state and local regulations in order to avoid high penalties or business closure.  Our firm offers full-coverage compliance counseling to licensed cannabis businesses. Our team is in regular attendance of local city hall and county government meetings pertaining to commercial cannabis in all areas of California and maintains current knowledge of the ever-changing regulations. We provide counsel in all areas of business compliance for cannabis retailers, distributors, cultivators, and microbusinesses. Our attorneys have a combined 20+ years of experience in the commercial cannabis industry and are active in compliance consulting throughout the state. We are able to provide our clients with expert contractors in building safety code pre-inspection, packaging and labeling compliance, product inventory and storage, advertisement restrictions, etc. We would love to help ensure that your cannabis business is successful and in compliance with all local and state regulations, giving you one less thing to worry about. If you have any questions or would like to speak with our attorneys to further discuss our compliance services, please feel free to reach us via email (info@margolinlawrence.com) or phone (323-253-9700). 

L.A. Retail Cannabis Legislation Moves Forward: What Happens Now

Posted by Margolin & Lawrence on April 22, 2019

 

 

Wednesday, April 17 - The City of Los Angeles Rules, Elections, and Intergovernmental Relations Committee discussed and approved an April 12, 2019 report and proposed ordinance from the LA City Attorney regarding cannabis licensing, with recommendations to make some amendments.

All recommendations were approved and will be redrafted for Council consideration and presented on Tuesday, April 30.

Today’s meeting moves the City closer to the opening of the highly anticipated Phase 3, which is the first chance that will allow the general public to receive dispensary licenses. The City Attorney was directed to make requested changes to the proposed new ordinance, to present for City Council consideration on April 30.

 

Notable Takeaways from Wednesday’s Meeting

The City of Los Angeles and the DCR have been hard at work in recent months, particularly as they sort through the specifics of Phase 3. While Phases 1 and 2 focused on existing cannabis dispensaries, non-retailers (i.e. growers and manufacturers), and social equity applicants, Phase 3 has been the main attraction for many entrepreneurs and would-be business owners looking to break into the industry.

In an earlier April meeting, the fate of Phase 3 was largely unknown due to funding. The DCR claimed that licensing was on hold as they awaited the Fee Deferral Program, which would allow Phase 3 to commence.

While a date has not been announced for the opening of Phase 3 applications, Wednesday’s meeting shed some light as to the direction the City and DCR are taking to solidify the process.

 

Among the notable new details that are coming out through these recent meetings and reports are:

● Changes to the Los Angeles Municipal Code establishing a first come, first served application process for retailer commercial cannabis activity licenses, with details regarding what is required for an application to be considered complete

● A proposal to allow applications for retail storefront dispensaries beginning January 1, 2020, in neighborhoods that have already exceeded Undue Concentration caps, with City Council approval

● Modifications to the process for issuing non-storefront retail licenses

● Allowing the Department of Cannabis Regulation (DCR) to grant Temporary Approval to Phase 3 storefront retail applicants

● Exempting Phase 2 applicants from the Undue Concentration requirements

● Setting deadlines for Phase 2 applicants to finalize their business location (May 15) and obtain Temporary Approval (substantial progress by July 1)

● Revising various requirements to qualify as a Tier 3 Social Equity Applicant and revising various benefits provided to Tier 1 and Tier 2 Social Equity Applicants

● Adding an additional reason to deny a license application — if the City has taken enforcement action against unlicensed cannabis activity at the same address since January 2018

● Clarifying the definition of license ownership relative to management companies

 

In addition, one of the recommendations to the draft ordinance that was approved on Wednesday was to instruct the DCR to finalize a timeline for all Phase 3 and Type 9 Pilot activities and post the information on the Department’s website. This indicates that an exact date for Phase 3 licensing could be established by April 30, if not sooner.

 

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This blog is not intended as legal advice and should not be taken as such. The possession, use, and/or sale of marijuana is illegal under federal law.