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Los Angeles Cannabis Regulations Commission Announces Recommendations for Phase 3 Processing

Posted by Margolin & Lawrence on March 11, 2019

The Cannabis Regulations Commission met on March 5th and presented their recommendations to the City Attorney that would establish policies for processing phase 3 applications. Phase 3 would begin with a 60-day pre-vetting process of social equity applicants to verify Tier 1 or Tier 2 qualification. Verified Tier 1 or 2 applicants will then be eligible to move forward into the first phase of the licensing process. The DCR will issue 100 licenses in this initial phase allocating 75 to qualified Tier 1 applicants. Qualified Tier 1 applicants would receive priority receiving 75% of the available licenses during this initial phase so long as all basic application requirements are met including:

 

  • A signed lease with proof of payment or deposit, or a property deed
  • Meet all sensitive use requirements, including undue concentration
  • Payment of required license fees
  • Ownership organizational structure
  • Financial information
  • Proposed staffing plan
  • Indemnification
  • Complete and detailed diagram
  • Proposed security plan
  • Radius map
  • Labor peace agreement
  • Current Certificate of Occupancy
  • Compliance with the Equity Share Rules

 

Second phase 

The second phase will allocate an additional 100 licenses establishing no priority between Tier 1 or Tier 2 applicants. The second phase will establish a “first-come, first-serve” process that will allow the first 100 qualified applicants will move forward. Basic qualifications required to be met are payment of the required license fees or deferment approval; ownership organizational structure; financial information; indemnification; and, labor peace agreement. The remaining qualifications mentioned above would be required within 90 days.

 

The Commission also recommended the implementation of a pilot program for Type 9 Retail Non-Storefront delivery services. A total of 40 licenses would be available allocating 20 licenses to pre-vetted Tier 1 Social Equity applicants. The pilot program will also allow verified applicants who could not obtain a Type 10 retail license due to undue concentration limits will receive priority for a Type 9 delivery license. This will allow licensees to remain in their building and operate as a non-storefront retailer in lieu of having to locate and secure another compliant location. Eligible phase 2 applicants will also have an opportunity to amend their application to include delivery so long as they are compliant with the city’s zoning and regulatory requirements.

Phase 3 Licensing Estimated Timeline


 

Phase 3 Application Processing

60 day Pre-Vetting Period

  • Basic Tier 1 or Tier 2 qualification
  • Indemnification

 

 Phase 3A:

14 day application window

  • Qualified Tier 1 or Tier 2 applicants will be processed for 100 retail licenses (75% reserved for Tier 1 applicants). Pre-vetted applicants will receive 15 days notice of when the first phase application window is to open.
  • Deficient applications will have 5 days from the start of their application to rectify insufficiencies or issues with the basic qualifications.

 

 Phase 3B:

30 day application window

  • Pre-vetted Tier 1 or Tier 2 applicants who meet basic qualifications (see above) on a “first-come, first-serve” basis.
  • Applicants will have an additional 90 days to submit the remaining application requirements
  • Deficient applications will have 5 days from the start of their application to rectify insufficiencies or issues with the basic qualifications

 Delivery Pilot Program:

  • Pre-vetted Tier 1 or Tier 2 applicants will receive 15 days notice for when Type 9 delivery licenses will become available
  • Pre-vetted Tier 1 or Tier 2 applicants subjected to undue concentration limits will have priority
  • Eligible phase 2 applicants will have opportunity to amend their application to include delivery
  • Deficient applications will have 5 days from the start of their application to rectify insufficiencies or issues with the basic qualifications

March Report: Where We Are with Los Angeles Phase 3 Licensing

Posted by Margolin & Lawrence on March 8, 2019

February 28th, 2019

“I’m frustrated.”

These two words were expressed throughout last week’s city council meeting on the current state of cannabis affairs in the city of Los Angeles. Business owners, hopeful entrepreneurs, private citizens and council members reverberated this sentiment from the city’s long delayed licensing process and yet to be fulfilled promise of a social equity program.

The Department of Cannabis Regulation (DCR) held its regular meeting before city council on February 28th to report on the progress the department has made to date and forecast expectations for the future of cannabis licensure in Los Angeles and the long awaited opening of phase 3. Executive Director Cat Packer sat before the council and highlighted the department’s substantial progress since its commencement in 2017, but made clear that “we still have a long way to go.”

A call was made for a more inclusive social equity program to expand the demographic of eligible applicants to other disenfranchised communities impacted by the war on drugs particularly, hispanics. However, strains on resources and available funding have left little for the social equity program to get off the ground.

To date, 55 temporary approvals have been granted to phase 2 applicants and 178 to phase 1 applicants. There are hundreds left to wade through pushing back the opening of phase 3 to sometime in spring or summer. The DCR proposed a bifurcated application process for phase 3 general processing when the time comes that would split the application process in two parts. Part One would establish a lottery or first-come first-serve process and Part Two would be a merit based system. The two part process is suggested to mitigate fairness and allow those who do not have access to resources a fair chance to participate for a license.

Cat also pointed out the large disparity between the number of retail licenses that will be available for phase 3 eligible program applicants. To comply with the city’s regulations for undue concentration, in the city that is home to some 4 million residents, granting one license per 10,000 residents allows for approximately 200 retail licenses available to some 10,000 plus people who are eligible for the social equity program.

An immediate need was called for increased enforcement to shut down illegal and unlicensed cannabis businesses from operating in the city. The black market is not only harming licensed businesses by taking customers from paying high dispensary prices but the city. In order for the city to provide funding generated from tax revenues requires a crack down on the black market.   

With all eyes on Cat Packer for answers, she in turn responded to city council asking for direction and guidance on how the department is to proceed. A motion was submitted in support of immediate funding to implement the program and expand the demographic of eligible applicants to participate in the Los Angeles cannabis market and increased enforcement to crack down on the black market.   


March 5th, 2019

The Cannabis Regulations Commission met on March 5th and presented their recommendations to the City Attorney that would establish policies for processing of phase 3 applications. Phase 3 would begin with a 60 day pre-vetting process of Social Equity applicants to verify Tier 1 or Tier 2 qualification. Verified Tier 1 or Tier 2 applicants will then be eligible to move forward into the first phase of the licensing process. The DCR will issue 100 licenses in this initial phase allocating 75 to qualified Tier 1 applicants. Qualified Tier 1 applicants would receive priority receiving 75% of the available licenses during this initial phase so long as all basic application requirements are met, including:

  • A signed lease with proof of payment or deposit, or a property deed

  • Meet all sensitive use requirements, including undue concentration

  • Payment of required license fees

  • Ownership organizational structure

  • Financial information

  • Proposed staffing plan

  • Indemnification

  • Complete and detailed diagram

  • Proposed security plan

  • Radius map

  • Labor peace agreement

  • Current Certificate of Occupancy

  • Compliance with the Equity Share Rules


The second phase will allocate an additional 100 licenses establishing no priority between Tier 1 or Tier 2 applicants. The second phase will establish a “first-come, first-serve” process that will allow the first 100 qualified applicants will move forward. Basic qualifications required to be met are payment of the required license fees or deferment approval; ownership organizational structure; financial information; indemnification; and, labor peace agreement. The remaining qualifications mentioned above would be required within 90 days.

The Commission also recommended the implementation of a pilot program for Type 9 Retail Non-Storefront delivery services. A total of 40 licenses would be available allocating 20 licenses to pre-vetted Tier 1 Social Equity applicants. The pilot program will also allow verified applicants who could not obtain a Type 10 retail license due to undue concentration limits will receive priority for a Type 9 delivery license. This will allow licensees to remain in their building and operate as a non-storefront retailer in lieu of having to locate and secure another compliant location. Eligible phase 2 applicants will also have an opportunity to amend their application to include delivery so long as they are compliant with the city’s zoning and regulatory requirements.


Phase 3 Licensing Estimated Timeline


Phase 3 Application Processing

60 day Pre-Vetting Period

  • Basic Tier 1 or Tier 2 qualification

  • Indemnification

Phase 1:

14 day application window

  • Qualified Tier 1 or Tier 2 applicants will be processed for 100 retail licenses (75% reserved for Tier 1 applicants). Pre-vetted applicants will receive 15 days notice of when the first phase application window is to open.

  • Deficient applications will have 5 days from the start of their application to rectify insufficiencies or issues with the basic qualifications.

Phase 2:

30 day application window

  • Pre-vetted Tier 1 or Tier 2 applicants who meet basic qualifications (see above) on a “first-come, first-serve” basis.

  • Applicants will have an additional 90 days to submit the remaining application requirements

  • Deficient applications will have 5 days from the start of their application to rectify insufficiencies or issues with the basic qualifications.

Delivery Pilot Program:

  • Pre-vetted Tier 1 or Tier 2 applicants will receive 15 days notice for when Type 9 delivery licenses will become available

  • Pre-vetted Tier 1 or Tier 2 applicants subjected to undue concentration limits will have priority

  • Eligible phase 2 applicants will have opportunity to amend their application to include delivery

Deficient applications will have 5 days from the start of their application to rectify insufficiencies or issues with the basic qualifications.

CA Cannabis Retail Update

Posted by Margolin & Lawrence on March 7, 2019

Contra Costa County

On February 14th, Contra Costa officially issued a Request For Proposal form for new cannabis businesses, including storefront retailers. The number of retailer licenses (with or without delivery operations) will be capped at four.

The county’s deadline for letters of intent is April 4th, while full proposals will be due (by request only) on June 27th. Additionally, the county has released a zoning map showing the proposed areas that will be eligible for cannabis business locations.

City of Fresno

On December 12th, 2018, Fresno voted to allow up to seven medical cannabis retail licenses for the following year, with seven additional retail licenses to follow upon city approval in 2019. The current ordinance limits the number of cannabis retail businesses within the city to fourteen, but seven more may be allowed by a city council resolution.

Fresno limits cannabis retail businesses to locations zones DTN, DTG, CMS, CC, CR, CG, and CH. Additionally, no more than two cannabis retail businesses may be allowed in any one council district.

City of Martinez

On February 26th, the City of Martinez’s Planning Commission met to discuss the city’s newly released draft ordinance for cannabis businesses. The draft regulations would allow for a maximum of two storefront retail licenses, along with a maximum of two delivery licenses (to be associated with a storefront retail business). Retail cannabis businesses would be limited to commercial and light industrial zones. According to the Martinez Gazette, the Planning Commission sent these proposed regulations to the City Council, including a suggestion that the city raise the proposed number of licensed delivery services to three.

City of Pomona

On March 5th, the Pomona City Council met for the first reading of the city’s new cannabis ordinance. The draft regulations provide for licensing of both storefront and delivery-only cannabis businesses. However, the proposed caps on licenses and zoning/location restrictions for cannabis businesses have yet to be released.

City of South Lake Tahoe

On February 5th, the City of South Lake Tahoe released a new cannabis ordinance, allowing up to two retail operations and two microbusiness operations with on-site retail. Cannabis businesses will be restricted to the locations indicated on the city’s buffer map. The city has released its application form and guidelines: the submission period will last from March 11th to April 5th.

City of Ventura

On January 1st, new regulations from the California Bureau of Cannabis Control took effect, allowing delivery of adult-use and medical cannabis anywhere in the state. This overturned Ventura’s past cannabis ordinances, which had restricted retail cannabis activities within the city to deliveries by a maximum of three licensed businesses located outside of city limits. At a City Council meeting on March 4th, the city discussed new policy measures to bring Ventura’s policies in compliance with California law. Among the items on the agenda was the possibility of taxing and permitting cannabis activities within the city, an indication that Ventura is becoming more open to cannabis business.

California Hemp & CBD Update

Posted by Margolin & Lawrence on February 4, 2019

This article is a companion post to our prior update on CBD’s federal legal status.

California Continues to Restrict CBD

The California Department of Public Health has made it clear that CBD is not allowed in food products within California: the Department of Public Health issued a memo in July 2018 confirming that CBD products are not allowed in any food products in the state (unless the products are regulated as commercial cannabis edibles, which by definition contain THC levels of at least 0.3%). Thus, under state law, CBD products are allowed to be sold and ingested as long as they include THC, and are banned in food if they come from industrial hemp with little or no THC. The reason CBD products with no THC are banned by state law is that California incorporates federal law regarding food additives, dietary use products, food labeling, and good manufacturing practices for food.  

The Department of Public Health has cited the Sherman Law as the authority allowing it to restrict the production and sale of CBD products. The Sherman Law regulates food, drugs, and cosmetics in California.  “Drug” is defined in section 109925 of the state law as follows:

“Drug” means any of the following:
(a) Any article recognized in an official compendium.
(b) Any article used or intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in human beings or any other animal.
(c) Any article other than food, that is used or intended to affect the structure or any function of the body of human beings or any other animal.
(d) Any article used or intended for use as a component of any article designated in subdivision (a), (b), or (c) of this section.

Further, “Food” is defined under section 109935 of the state law as “[a]ny article used or intended for use for food, drink, confection, condiment, or chewing gum by man or other animal.”  This definition of food includes pet food, but does not include products containing cannabis with at least 0.3% THC (which are, as described above, cannabis edibles). California law incorporates the federal laws prohibiting the addition of CBD or THC to food products.

CDPH: Topicals and Vape Pens Are Illegal, Even if Not Marketed with Health Claims

The California Department of Public Health’s position on CBD in food is set forth in a clear written policy – it is not allowed.  Some have asked, however, whether CBD might be lawfully produced and sold in California in non-food products – such as vape pens or other smokable products or creams or other topical treatments.  While there may be legitimate arguments that this is at least a gray area in the law, representatives of the Department of Public Health are currently informing members of the public that CBD-based vape pens and topicals are prohibited under state law (specifically the Sherman law).  

The CDPH’s position is that any vape pens or topicals containing CBD, but no THC, are considered illegal by the State of CA – even though the products are not foods or dietary supplements, and even if they are not marketed with any health claims, they are still considered “unapproved drugs” because they contain the same active ingredient (CBD) as is found in an FDA-approved drug.  

While CDPH representatives maintain that CBD-based topicals and vape pens are all unlawful under state law, there is no clear written policy or statement from California authorities on the issue of CBD in non-food products, and this area of law seems to be in a state of flux.

Non-Food CBD and Hemp in California

For the moment, non-food CBD and hemp products, such as creams, topicals, and cosmetics, seem to be in a legal gray area. The CDFA recommends that manufacturers and sellers check with their local health agencies about any products they plan to make or sell – since enforcement currently seems to be taking place almost entirely at the local level, this is probably the best way to find out whether a particular product is allowed.

According to the CDFA, California law does not currently provide any requirements or issue any licenses for the manufacturing, processing, or selling of non-food industrial hemp or hemp products. Neither the CDPH nor federal agencies have released any guidelines or restrictions describing the allowable uses of non-food hemp or hemp-derived CBD products.

Local environmental health agencies are responsible for enforcing the state guidelines, but, according to the LA Times, local enforcement of restrictions on CBD and hemp products can vary significantly. Likewise, although the FDA has cracked down on CBD businesses that make unsubstantiated or false claims about their products, indicating that they plan to regulate CBD products to some degree, they’re less clear about the future legal status of hemp-derived CBD and non-edible hemp derivatives in general.

Penalties

In California, adulterated or misbranded food, drugs, and cosmetics are penalized under CDPH’s Food, Drug, and Cosmetic Law. All products are considered to be misbranded if they misstate their ingredients or make unproven medical claims, while food products are considered to be adulterated if they contain CBD.

Violations are punishable by imprisonment for not more than one year in the county jail or a fine of not more than one thousand dollars ($1,000), or both the imprisonment and fine. If the violation is committed after a previous conviction under the same code that has become final, or if the violation is committed with intent to defraud or mislead, or if the violation was intentional / intended to cause injury, the person who committed the violation will be subject to imprisonment for not more than one year in the county jail, imprisonment in the state prison, or a fine of not more than ten thousand dollars ($10,000), or both the imprisonment and fine.

The FDA also has the right to enforce federal food, drug, and cosmetic laws, where the fines range from up to $100,000 (for a misdemeanor by an individual that does not result in death) to up to $200,000 (for a misdemeanor by a corporation that does not result in death). The maximum imprisonment for a misdemeanor remains a year for each offense.

Local health authorities may also enforce their own restrictions on hemp and CBD. For instance, food operators in LA County found to be selling products adulterated with hemp will be cited with a violation on their health inspection reports.

Los Angeles Continues to Issue and Promote Tax Registration Certificates to Sell CBD Products

The City of Los Angeles offers a form on the website of the Department of Cannabis Regulation that is to be used for businesses seeking a Business Tax Registration Certificate (BTRC) to engage in commercial activities related to industrial hemp and/or cannabidiol (CBD) derived from industrial hemp in the City of Los Angeles (City). The Department of Cannabis Regulation (DCR) does not regulate the sale of CBD oil, CBD products or hemp products if they are derived from industrial hemp, as defined in Section 11018.5 of the Cal. Health and Safety Code. No cannabis-specific City license is required to sell those products. Therefore, to receive a BTRC and engage in commercial activities related to industrial hemp, you must attest that the products you intend to sell are derived from industrial hemp.

Registration for this tax certificate does not authorize any business to violate state or local law.  It signifies, however, that the government anticipates a continuing market in CBD-based products, and that the government may be preparing to openly allow and regulate these products.

Federal Hemp & CBD Update – What’s Legal and What’s Not?

Posted by Margolin & Lawrence on January 24, 2019

CBD products are everywhere – including tinctures, creams, gummies, pills, and drinks. But is it legal to buy, sell, and produce them?  The answer may depend on where you are. In the December 2018 Farm Bill, the federal government removed CBD (and industrial hemp and all cannabis derivatives with less than 0.3% THC) from the Controlled Substances Act altogether.  But that is not the end of the story, as the FDA continues to regulate CBD products through enforcement of the Food, Drug & Cosmetic Act, and state governments also have restrictions. Federal and state laws are changing quickly in this area, so anyone involved with these products is encouraged to consult with a lawyer and stay informed on recent developments.

Federal Farm Bill Removes Hemp and CBD from the Controlled Substances Act

In September 2018, the federal Drug Enforcement Administration (part of the Department of Justice) issued a memorandum announcing that drugs including CBD with THC content below 0.1% would be taken off of Schedule 1 of the controlled substances schedules, and moved to Schedule 5, which allows CBD products to be sold through traditional pharmacies with a doctor’s prescription so long as the particular product is first approved by the FDA. The order also disallowed any importing or exporting of CBD products without a permit.  

On December 20, 2018, the federal government took a further step, removing industrial hemp and all derivatives of cannabis with less than 0.3% THC – including CBD products – from the Controlled Substances Act.  This means that CBD products are no longer an inherently illegal substance under federal law, so long as they contain less than 0.3 percent THC. They are not Schedule 1, Schedule 5, or any Schedule – they have been de-scheduled. CBD products with THC content above 0.3% remain classified as a Schedule 1 controlled substance, subject to severe criminal sanctions. The Rohrbacher-Farr amendment creates a limited exception, preventing the DOJ from prosecuting anyone in strict compliance with state medical marijuana laws (adult-use or recreational uses of CBD products may still be prosecuted).

Does this mean that people nationwide now have free reign to buy, sell, and produce products with CBD as long as they don’t have too much THC?  Not quite.

Federal Law Still Restricts CBD

In June 2018, several months before the federal government removed CBD and industrial hemp from the Controlled Substances Act, the FDA announced that it had approved Epidiolax, the first drug comprised of an active ingredient derived from marijuana – CBD – to treat rare, severe forms of epilepsy.

Due to CBD’s new status as the active ingredient in a federally-approved drug, federal laws continue to restrict the use of CBD in specific circumstances, including in the use of food and non-approved drugs.  The federal Food, Drug, and Cosmetic Act is enforced by the federal Food and Drug Administration, which released a statement on the day the Farm Bill was passed, clarifying the federal status of CBD.  

It Remains Illegal Under Federal Law to Market CBD Products with Certain Health Claims Without FDA Approval

As explained by the FDA, it remains illegal under federal law to “introduce[ ] into interstate commerce” any CBD product  “that is marketed with a claim of therapeutic benefit, or with any other disease claim,” without the product first having been “approved by the FDA for its intended use.”  This same rule applies to any other product marketed as a drug for human or animal use. This means that “[c]annabis and cannabis-derived products claiming in their marketing and promotional materials that they’re intended for use in the diagnosis, cure, mitigation, treatment, or prevention of diseases (such as cancer, Alzheimer’s disease, psychiatric disorders and diabetes) are considered new drugs or new animal drugs and must go through the FDA drug approval process for human or animal use before they are marketed in the U.S.”

It Remains Illegal Under Federal Law to Add CBD to Food

The FDA also explained in its latest statement that it remains illegal under federal law to add either THC or CBD to any food products.  

“Additionally, it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.”

Under federal law, then, CBD products may now be produced, bought, and sold, so long as they are not marketed with any claims of therapeutic benefit, and so long as CBD is not added to food or marketed as a dietary supplement. That is not the end of the story, however, as state laws may create additional restrictions. 

Many States Allow CBD and Other Hemp-Based Products to be Produced and Sold

According to the National Conference of State Legislatures, 39 states had some kind of industrial hemp cultivation or production program as of August 2018.

As of 2018, the states with existing commercial hemp programs are:

  • Arizona

  • California

  • Colorado

  • Indiana

  • Kentucky

  • Maine

  • Massachusetts

  • Minnesota

  • Montana

  • North Dakota

  • Oregon

  • Rhode Island

  • South Carolina

  • Tennessee

  • Vermont

  • Virginia

  • West Virginia

Now that the farm bill has legalized hemp, some states are updating their regulations on hemp and hemp-derived CBD, with more expected to follow suit in the near future. For instance, Alabama has reportedly authorized the production of hemp-derived CBD, Pennsylvania plans to allow the full commercial production of industrial hemp, Michigan no longer counts hemp-derived products as marijuana, Colorado has loosened funding restrictions on commercial hemp farming, and Utah has begun registering businesses to legally sell hemp and CBD.

In order to determine whether any CBD-based business is allowed, it is important to look at current state and local laws, to set up production operations in an area that is friendly to these products, and to make sure the business is only selling products in areas that allow them. Since the status of industrial hemp programs, as well as various laws allowing CBD-based products for medical or other purposes, are subject to change, businesses should stay in contact with local authorities to ensure they’re in compliance with the existing law.

California is one of the states that has laws in place authorizing the production of industrial hemp. However, California has not yet fully set up its industrial hemp registration and licensing system – once it does so, there will likely be more legal guidance and clarity on the sales of hemp and CBD-based products.  According to the California state Department of Food and Agriculture:  “All growers of industrial hemp for commercial purposes must register with the county agricultural commissioner prior to cultivation. Registration is not yet available. The fees and process for registration will be developed by CDFA, which will consider recommendations from the Industrial Hemp Advisory Board.”

For more information on California’s laws, check this space next week for a blog post on the current state of California’s hemp and CBD laws.

North San Diego County Cannabis Update

Posted by Margolin & Lawrence on January 18, 2019
While most of the attention on cannabis business in San Diego County has focused on the area in and around the City of San Diego, there are also a few jurisdictions in the northern half of the county with open cannabis license applications. Here's a breakdown of the licensing application processes in the cities of Vista and Oceanside.
 
City of Vista
 
The City of Vista is offering business licenses for medical dispensaries only, limited to one business per 10,000 residents of Vista (so the limit is currently 10).
 
Applications will open on January 22nd and remain open for 7 days. During this period, applicants must submit complete applications (including site plans, security plans, etc.) and a $100,000 deposit to be held by the city during the application process. Applications are limited to pre-existing registered collectives/cooperatives. If fewer than 6 businesses are granted licenses, another application period will be opened at a later time. 
 
The application form can be found online here.
 
Additionally, the city has released a list of potentially eligible locations where cannabis businesses may be located.
 
City of Oceanside
 
The city of Oceanside is  currently accepting applications for cultivation, distribution, manufacturing, testing, and non-storefront retail. From the city website:
 
The City has a limit of 5 licenses for Cultivation. There are currently 16 applications under review for cultivation.
The City has a limit of 2 local licenses for Non-Storefront Retail. There are currently 4 applications under review for Non-Storefront Retail.
There are currently 7 applications for Manufacturing and 6 for Distribution under review. There is no limit to the number of local licenses that will be issued for these types. 
The City has received no applications for Testing Labs.
 
To apply, businesses must obtain a zoning verification letter confirming their property's eligibility, and submit an application (including a business plan, security plan, etc.) along with an initial $3,471 application fee (not including the background check fees). Additional fees will be charged for each phase of the licensing application process.
 
The application form can be found online here.
 
Oceanside has also released a map of eligible zones, which can be found online here.
 
For more information on cannabis l icensing requirements in San Diego County or elsewhere in California, check our   guide to California's cannabis laws   or reach out to our cannabis attorneys directly at  info@margolinlawrence.com .
 

California Jurisdictions Open for Cannabis Retail

Posted by Margolin & Lawrence on January 8, 2019

Despite all the talk about cannabis retail in the news, it can be difficult to tell exactly when and where it's possible for businesses to apply for a cannabis retail license. Here are a few jurisdictions where applications for cannabis retail are either currently open or planned to open in the near future. 

Riverside County

Per the county planning department, Riverside is planning to give out a maximum of 19 retail licenses. While no date is currently set, the proposal process is scheduled to begin later this year.


Santa Barbara County

County is currently accepting cannabis permit applications. Storefront retail permits are limited to eight countywide, with no more than two in any supervisorial district.


Cathedral City

Applications for retail businesses are currently open, with an application form available on the city website.


City of Chula Vista

The city’s application for cannabis businesses will open on January 14th and remain open until the 18th (for Storefront Retail, Non-Storefront Retail, and Cultivation businesses) and the 25th (for Manufacturing, Distribution, and Testing Laboratory businesses.)


City of Desert Hot Springs

Conditional use permits for cannabis activities, including Cannabis Sale Facilities, are available on the city’s website.


City of Goleta

Goleta is currently accepting applications for up to 15 total storefront retail businesses.


City of Jurupa Valley

Jurupa Valley will accept priority applications for cannabis retail from January 22nd to February 6th, with non-priority applications opening on April 1st. The number of retail businesses permitted will be linked to the city's population, with 1 license given for every 15,000 residents. This currently means that the number of licenses given will be capped at 7. 

 

City of Lompoc

Lompoc is currently accepting cannabis retail license applications.


City of Moreno Valley

In December, the city raised its cap on dispensary licenses from 8 to 23. In addition to admitting qualified applicants from the last round of applications, the city will make proposal forms for new applicants available online.


City of Pasadena

The city will license up to 6 retail establishments. The permit application process is open on the city website through January 31st.


City of San Diego

The city is currently accepting applications for cannabis outlets with retail sales, up to a limit of four businesses per council district.


City of San Luis Obispo

Applications for 3 storefront retail businesses and an indefinite number of delivery-only retail businesses are open on the city website through January 29th.


City of Vista

Per the ordinance released in December, the city will be granting 3 delivery-only (non-storefront) retail licenses this year.

Asylum Seekers' Stories From the DHS "Ice Box"

Posted by Margolin & Lawrence on January 4, 2019

Last week, Senator Dianne Feinstein called for a Senate Judiciary Committee hearing on the Department of Homeland Security’s detention practices. In December, two children who were detained for attempting to cross the US border died while in government custody. As the department overseeing the Border Patrol and Customs and Border Protection, the DHS has faced intense scrutiny for its role in these deaths, as well as for the practice of child detention in general. In particular, United Nations human rights experts are investigating whether the children were being held in a type of cell known as a hielera, or “ice box.” These cells are notorious for poor conditions that reportedly include low temperatures, overcrowding, and little access to food or water. The following are accounts from other individuals who have been detained while seeking asylum, as told to attorney Jennie Stepanian.

Contra Costa Cannabis Update

Posted by Margolin & Lawrence on January 2, 2019

In November, a measure to tax and regulate cannabis businesses in Contra Costa County was approved by more than 72 percent of the county’s voters. Given that the election indicated overwhelming local approval for legal cannabis, the county has been moving toward finalizing its cannabis regulations, focusing on the county’s land use restrictions for cannabis businesses and its application process for potential cannabis operators. In December, the county’s Board of Supervisors met to discuss these issues in an open hearing. As of January, here’s where the county stands on the two matters.

Land Use Restrictions

Contra Costa currently plans to limit the number of permits granted for certain commercial cannabis activities. The proposed restrictions are as follows:

  • 4 Permits for Storefront Retail

  • 10 Permits for Cultivation

  • 2 Permits for Manufacturing in Agricultural Zoning Districts

The county has provided an interactive online map allowing prospective applicants to look up a property in order to determine its eligibility for a given cannabis activity, as well as which permits will be required to do business.

A complete list of permits that may be required for a specific property/activity, including health and water use requirements, can be found on the county’s Commercial Cannabis Permitting website.

Application Process

The Contra Costa Board of Supervisors released a preliminary draft of the county’s Request for Proposals (RFP) form. Designed as an invitation for cannabis business applicants, the RFP lays out the Contra Costa cannabis licensing process for the numerically-limited activities listed above.

First, applicants will submit a Letter of Intent (LOI) containing the basic information about their proposed business. The LOIs will be reviewed by the county, which will invite some businesses to submit full proposals. These proposals will make up the main part of the application, including complete descriptions of the prospective operation and the applicant’s qualifications.

Once an applicant’s proposal has been reviewed and selected by the county, the business will be eligible for a Land Use Permit for their commercial cannabis activity. Permits for non-numerically-limited commercial cannabis activities, on the other hand, can be applied through directly through the county’s Land Use Permit process, without the added LOI/RFP requirement.

The county currently plans to release its final RFP form on January 24, with LOIs due by February 14, proposals due by April 18, and permit eligibility granted in June/July. However, the terms of the RFP, including these estimated dates, are still subject to change. The application process, including the RFP, will be revised and brought before the Board of Supervisors again on January 22.

Lessons From the Cape

Posted by Margolin & Lawrence on December 20, 2018
By Allison Margolin with Erin Williams
 
Last week, I travelled to Brewster, Massachusetts, a small town on Cape Cod, to speak to the city planning board about a client's proposed cannabis cultivation license. The client's proposal was the first of its kind in Brewster. Since Massachusetts legalized cannabis in 2016, so far there are only three recreational dispensaries in the whole state, with more expected to open in the coming months. Nearly 80 towns have issued bans and about 90 others have moratoriums. In other words, the change has been slow. 
 During this meeting with the planning board, I quickly realized the city seemed open to the plan, but had some basic questions on what a grow and potential retail location would mean for their small community. A few board members voiced their concerns on the effects of cultivation on groundwater and the energy costs, the town traffic (a key issue for an area with two lane highways), and potential increases in crime in the area. 
 Personally, I found these questions very encouraging. When Raza and I first started our practice almost a decade ago, the stigma against marijuana use was high, especially outside of California. Now that 33 states and the District of Columbia have legalized either recreational or medical cannabis, public opinion has shifted, too. None of the questions I heard in this meeting were about the morality of using cannabis. Instead, they were all practical concerns on the industry's impact on the environment and town safety. Here I will try to address these broad concerns.
 
Impact on Environment 
 
Obviously, this will vary with each site proposal, but what I can guarantee is that a regulated cannabis market will take the necessary precautions in meeting each state and city's guidelines than the illegal cannabis market. 
One environmental concern is water use. Cannabis plants are a  thirsty bunch, which poses more of a problem for desert climates like Southern California than places like Cape Cod. Still, it is far better to have a regulated cannabis grow in your town than an illegal grow, which might divert water or disrupt irrigation. 
Another issue is the potential clearing of forests and the effects on soil as well as the potential for pollution through the use of pesticides, herbicides, and fertilizers. Many in the industry are combatting this issue by using plant nutrients and fertilizers with a low environmental impact. 
There is also the issue of energy usage. Colder climates like Massachusetts' Cape will almost always use indoor cultivation, which will require a lot of electricity. There are ways to offset these energy costs by using solar panels, LED grow lights, etc. The more that area has renewable energy options, the better things will go for the city. 
In short, there will be environmental costs, but it will not be any more harmful than say, driving an SUV or eating too much factory-farmed meat.
 
Impact on Crime Rates 
 
Although I did not get any questions on the potential for crime – probably because Brewster is one of the safest cities in the region – this is another common question for places new to legal cannabis. Will legal weed will make your town more dangerous?
In the  5 years since Colorado and Washington became the first states to legalize recreational cannabis, there has been a decrease in violent crime for both states and a decrease in youth use of marijuana. The legal market also led to an economic boom in these states. The negative result is that there is an increase in impaired driving and traffic accidents.
Ultimately, as long as there is federal prohibition, the cannabis industry will be inherently riskier than other industries. Still, the evidence shows that legal cannabis is safer than the unregulated black market, not only for cities and states but for individual consumers which requires product testing. 
 
Harm Reduction 
 
Although I never got the chance to dive into this subject at the planning board meeting, there is evidence showing that places with legal cannabis are not being hit as hard by the nationwide opiate crisis. After 14 years of steady increases in opioid-related deaths in   Colorado, there was a 6.5% reduction in 2014. This result is consistent across other places with legal cannabis, whether medical or recreational. 
Cape Cod, a vacation area that sees little business for nine months of the year, has been deeply impacted by the opioid epidemic. A 2018  report in the  Cape Cod Times showed rescuers responded to 15% more overdose calls on the Cape in 2017 than they had in 2016. The expanded use of the opioid overdose reversing drug Narcan saved a lot of lives. Even as the rest of the state saw a decrease in opioid-related deaths for the first time in 6 years in 2017, the problems facing the Cape remain. The community is aging and the lack of opportunities have driven its youth to the major cities inland like Boston. The research implies that the medical benefits of marijuana, as well as the economic opportunities that marijuana businesses provide, would only support the Cape's community.
 I believe there will always be some potential for risk when introducing a new industry to a community, especially when that industry is centered on a federally illegal substance. However, I think the rewards far outweigh the risks. 
 

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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.