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 email@example.com.