Posted by Margolin & Lawrence on August 8, 2019

BA56487D-9137-48AF-BF01-1654F168864C(Picture of DCR building in Los Angeles)

On August 6, 2019, M&L partner J. Raza Lawrence attended the Phase 3 Round 1 Licensing and Social Equity Workshop hosted by the Department of Cannabis Regulation (DCR). The DCR provided an update on Phase 2 applications, the Social Equity Program, and the application process for Phase 3.

Here is a summary of what was discussed at the workshop:


Phase 2 Applications

  • The DCR announced that a total of 570 Phase 2 applications were submitted and 122 temporary approvals were issued.
  • A total of 16 testing temporary approvals were issued.


Social Equity Program


  • The DCR announced there is a new social equity program manager, Dr. Imani Brown.
  • The City of Los Angeles is applying for more funding from the state of California for the social equity program. A sum of $40 million will be available statewide.
  • Los Angeles will likely do a new request for qualified vendors to provide services to social equity applicants.
  • The DCR will work with consultants who will look to other areas, such as Boyle Heights, San Fernando Valley and Downtown Los Angeles and determine the effect of gang injunctions for possible addition to the social equity program.
  • A total of 2,000 social equity applicants submitted applications to the DCR. 700 have been verified so far (mostly people who submitted everything correctly first time). Out of the 2,000 social equity applicants, 500 social equity applicants applied on the final day available to submit the application.
  • If social equity applicants have any issues regarding their social equity application, they may speak directly with the analyst assigned to their case to deal with these issues.
  • 90% of applicants should have a status by next week.
  • The DCR will not send denial letters and will continue to work with all applicants who respond within 7 days of getting an email request for additional information.
  • If you are one of the 100 selected for processing, you will need to:
    • Begin build out of retail premises
    • Prepare for DCR inspection
    • Prepare for LAFD inspection
    • Obtain state provisional license
    • Submit full local annual license application


Phase 3 Application Process


  • When the application for Phase 3 opens, the applicant will need to provide the business premises information on the application.
    • The applicant must submit a business premises diagram that meets the following requirements:
      • The diagram shall be to scale;
      • The diagram shall show the boundaries of the property and the proposed retail premises to be licensed, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, windows, and doorways;
      • If the proposed premises consist of only a portion of a property, the diagram must be labeled indicating which part of the property is the proposed premises;
      • The diagram does not need to provide any information not listed above (i.e. no security cameras).
  • For more information on all Phase 3 requirements, check out our blog here.
  • On August 9, 2019, the DCR will post an FAQ document on its website. This FAQ will be updated every week.
  • Tier 1 applicants have processing priority over Tier 2 applicants. The first 75 tier 1 applications that meet all the requirements will be eligible for Round 1. The remaining 25 applicants may be Tier 1 or Tier 2
  • Application Fees:
    • Retail fee: $8,059
    • Applicant only has to pay fee if determined eligible for Round 1
  • Public Convenience or Necessity (PCN) Approval
    • To obtain a PCN approval, an area must be at its Undue Concentration limit of Type 10 retail licenses. Applicant must apply for PCN with City Council. If the applicant is then denied by Council, the applicant cannot proceed with the application. If PCN is approved by Council, the applicant may then proceed to apply with DCR for a Type 10 retail license.
  • During the application process for Phase 3, applicants will be able to add non-retail activities at a later time after the retail application has been submitted.
  • The DCR will propose to issue temporary approvals for Phase 3 applicants for applicants to be able to operate before obtaining an annual license.


Other Announcements


  • In December 2018, the DCR only had 11 employees, the DCR now has a total of 25 employees.
  • The DCR announced that many areas have already met the cultivation undue concentration limits.
  • The DCR’s intent is to start the Delivery Pilot Program before 2020. 60 Type 9 Delivery licenses will be available.
  • There is also a possibility there may be a 2nd social equity verification window that includes new criteria for the Valley, Downtown Los Angeles, and Boyle Heights.
  • There will be a cannabis regulation commission meeting on August 22, 2019 that will begin at 2:00 p.m. and will be held at the city council chambers.





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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.