Under New City Regulations, Will LA’s Marijuana Businesses Be Able To Stay Open?

Posted by Margolin & Lawrence on September 27, 2017

This past Monday, the Los Angeles City Council held an open meeting of its Rules, Elections, and Intergovernmental Relations Committee on the subject of the city’s cannabis regulations. Our LA cannabis lawyers were present to comment on the new draft and urge the City to take a reasonable, fair, and business-oriented approach to regulation. To the disappointment of many of Los Angeles' cannabis stakeholders, the city has not yet drafted its final cannabis ordinance, and has yet to even set a date for the completion of said ordinance. Though under Measure M this was supposed to pass by September 30, that deadline is about to come and go.

As the LA Times reported, the current situation and the new draft regulations leave the city’s existing marijuana businesses (particularly existing cultivators and manufacturers) in a precarious situation. Without a clear path toward legally sanctioned operations under the new cannabis ordinance, their businesses could be forced to shut down to avoid violating the law. Beyond the obvious financial hardship, inconvenience, and legal risk, this unclear state of affairs for marijuana activity presents a business hazard: With real estate prices in Los Angeles at record levels, a property that’s zoned for cannabis activity, but not allowed to operate, can quickly become a white elephant with overhead expenses large enough to drive its owner out of business.

Council members responded to the concerns of those in attendance, saying that, although they had not made an official recommendation to the city on how to proceed, they hoped to find a solution that satisfied the existing industry’s needs. Politically, the situation is a difficult one: While it makes sense to give marijuana operators priority in licensing commensurate with their compliance with previous laws, detractors argue that this could be interpreted as rewarding grey-market or outright illegal activity. Either way, some constituents are bound to be unhappy. Moreover, the situation is characterized by pervasive uncertainty: this regulation is still a draft, and there could be still more changes on the way before a final ordinance is passed.

For Los Angeles to pave the way for a sustainable legal cannabis industry, the council members will have to respond to these concerns – and do so quickly, before the uncertainty of the current situation takes its toll on existing cannabis businesses.  

LA's Draft Cannabis Regulations Should Strive For Fairness And More Fun - Our Cannabis Law Op-Ed In The LA Daily News

Posted by Margolin & Lawrence on July 13, 2017

As med. cannabis lawyers, we think LA's regulations should allow for those operators already existing who have had prop D violations to still apply. Moreover, karaoke and cannabis should not make an illegal combo.

Today's Los Angeles Daily News includes a guest editorial on LA's new marijuana regulations by M&L partners Allison Margolin and Raza Lawrence!

Read more on our previous blog posts on Prop D compliance and social equity measures for more information on this field of cannabis law – or email us at info@margolinlawrence.com with any questions!

LA Cannabis Licensing & Social Equity

Posted by Margolin & Lawrence on June 29, 2017

As explained in our previous blog post, “compliance” will be a major factor in the distribution of marijuana licenses in Los Angeles – and cannabis lawyers around the city are fielding a number of questions about what, exactly, LA’s priority licensing process will entail.

The draft regulations the City has released extend a certain amount of privilege to existing marijuana sellers when it comes to licensing. Businesses and dispensaries that have operated “in substantial compliance” with prior iterations of marijuana law will be given priority, allowing them to continue operating while their license approvals are pending. Clearly, this confers a major business advantage, which has raised concerns about whether a compliance-based approach to awarding priority is equitable.

Disqualifying potential cannabis business owners for past violations, but opening the door to “compliant” newcomers, threatens to reinforce inequality. As Drug Policy Alliance policy director Cat Packer, slated to head the City of LA’s Cannabis Commission, explained in an interview with Merry Jane, “The impact of marijuana prohibition and the drug wars was heaviest in black and brown latino communities. If you say people with prior arrests and convictions can’t participate, it automatically has a disproportionate effect on communities that were punished by the War on Drugs.” In other words, privileging “compliance” could compound the negative effects of marijuana prohibition, blocking communities which have historically been more likely to be punished for cannabis use from gaining access to the benefits of the new, legal marijuana industry. As attorneys who have practiced in cannabis law for many years, we have seen the damage prohibition has done to these communities, and are fully supportive of a restorative approach to justice through the licensing process.

The LA City Council recently moved to create a Social Equity Program for marijuana licensing, intending to serve “those individuals and communities that were disproportionately harmed by cannabis prohibition.” This follows in the path of a similar program in Oakland, which reserved half of new dispensary permits for residents who lived in certain neighborhoods, had below-average annual incomes, or had previously faced cannabis convictions. Given how much larger Los Angeles' marijuana industry is than Oakland's, however, the mechanics of the LA program may need to be worked out, and it may not be able to mirror the Oakland model in every way.

Whatever the exact parameters of LA's Social Equity Program end up being, (and however they'll be affected by recent changes to state and city licensing regulations,) the priority-based system will continue to play a major role in deciding which marijuana businesses are allowed to operate. At present, the city plans to reserve a special round of applications for organizations that fit a profile similar to the requirements Oakland used. For more on priority and marijuana laws to the new state law (MAUCRSA), check our previous blog posts or guide to Prop 64, or email us at info@margolinlawrence.com.

 

Which Marijuana Dispensaries Will Los Angeles Allow?

Posted by Margolin & Lawrence on June 20, 2017

Los Angeles is moving ahead with regulating marijuana, a shift that will bring many businesses out of the gray and black and into compliance with municipal and state law. As cannabis lawyers who have been practicing throughout the implementation of various California marijuana regulatory regimes, we could not be happier to see these changes coming to fruition. The city will go from granting limited prosecutorial immunity to a short list of dispensary operators, as it did under 2013’s Prop D, to fully regulating a host of medical cannabis businesses with the implementation of 2017’s Measure M. This post will give you an overview of the Draft Regulations released by City Council President Herb Wesson’s office in June 2017, and will answer the question of how the city will treat existing cannabis businesses.

The regulations treat dispensaries differently from cultivators and manufacturers, and lay out different requirements for priority processing for each. Measure M will give priority to existing medical marijuana dispensaries (EMMDs) that have a 2016 or 2017 Business Tax Registration Certificate, are operating in compliance with current zoning law, and have been in “substantial compliance” with the city’s 2013 regulations. Those regulations, as laid out in Proposition D, require 1000-foot distancing from sensitive use areas, restrict operating hours to between 10 a.m. and 8 p.m., and introduce a host of other factors for compliance. “Substantial compliance” has not yet been defined by the city. Note that it is expected the City of LA will put a cap on the number of dispensary licenses granted. This number is not established in the draft regulations, but will likely be decided upon in the next 50 days, through discussions with Angelenos in the public comment period.

For existing medical marijuana businesses (EMMBs) which are not dispensaries (i.e. cultivators and manufacturers), the rules are similar. If an EMMB is located within the correct zoning, hasn't violated earlier regulations, and has been operating from a consistent location since January 1, 2016 or earlier, they qualify as “compliant.”

If an existing cannabis business that meets the above requirements applies for a license within 30 days of the applications opening, it'll have a chance to receive a compliance certification – which not only puts them in the first round of applications, but also allows their business to continue operating while its license is being processed. Any organization which isn't an EMMD or EMMB must wait until after they're licensed to begin operating.

The second round after “priority processing” will be the Social Equity round, which we will discuss in our next post. For more information about marijuana licensing, consult our blog post on Gov. Jerry Brown's recent changes to licensing restrictions, our guide to California marijuana laws, or email us at info@margolinlawrence.com.

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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.