L.A. Cannabis Commission Set To Clarify PCN Process

Posted by Olivia Hartman on July 29, 2020

L.A. Cannabis Commission set to clarify PCN process

On Thursday, July 30th, at 2:00 pm, the Los Angeles Cannabis Regulation Commission

Department of Cannabis Regulation will be conducting a Special Meeting via Teleconference to continue the discussion on L.A. cannabis licensing updates. At the last City Council meeting, changes were made to the ordinance relating to the retail licensing process, the Social Equity Program, and moving licenses around the City. The details of those changes were reported on by our staff - check them out here. Some of the decisions that were made in the last meeting were found to be confusing by Los Angeles civilians - specifically in regards to the details of the revised Social Equity Program and Round 2 Licensing process, who will be able to participate in the Round 2 lottery, and how and when Round 1 applicants who secured properties in anticipation of a license will be able to get licensed. Some of these issues may be clarified after the meeting on Thursday.

The most notable changes were made to the Phase 3, Round 2 process for storefront retail licenses, which will now be selected by a lottery opposed to the first come, first served selection process used during Phase 3 Round 1. Lottery winners will have a period of one year to find a business location in an area that has not met undue concentration. Some revisions were made to the Social Equity Program as well to have it better serve those who it was created to serve. New criteria for people seeking to become qualified as a Social Equity Applicant (SEA) requires proof of previous residence in newly-defined areas of the City and proof of meeting a revised low-income definition. All retail licensees will also need to meet the revised criteria of equity share requirements. Existing Phase 3, Round 1 licensees will need to revise their equity share to meet the newly established criteria.

On the agenda of things to be discussed on Thursday, July 30th:

- A summary of DCR activities since the last meeting of the Cannabis Regulation Commission

- A summary of Amendments to Article 4, Chapter X of the Los Angeles Municipal Code, including amendments to Section 104.19 regarding fees and fines associated with Commercial Cannabis regulations, Ordinance No. 186703

- The “PCN” process and related requirements and restrictions

- The Pre-Application Review process and related requirements and restrictions.

- The Temporary Approval application process and related requirements and restrictions

- The process to request Business Premises Relocation and related requirements and restrictions

- The definition of Equity Share and related requirements and restrictions (include link to blog here)

- Phase 3 Retail, Round 1

The currently operating definitions for relevant terms related to these matters are included in Ordinance No. 186703. The ordinance amends Article 4 of Chapter X of the Los Angeles Municipal Code regulating Commercial Cannabis Activity.

Margolin & Lawrence Policy Recommendations:

As the Los Angeles Department of Cannabis Regulation (DCR) continues to work out the kinks of the proposed ordinance amendments, the attorneys at Margolin & Lawrence have a few recommendations that are informed by years of experience in representing clients in the cannabis

industry and advocating for cannabis policy reform. We have already written about most of these recommendation in a previous blog, attached here for your reference. M&L would like to suggest an additional recommendation that is more relevant to the agenda for Thursday’s DCR meeting.

All of the Los Angeles Phase 3 retail applicants were required to secure real estate in the proper zone for months and spend substantial resources, but none has yet received any license. With the entire licensing process halted after Mayor Eric Garcetti called for an outside audit on November 6 after various allegations of irregularities, we believe that these retail applicants deserve access to the PCN process as they continue to work towards obtaining their licenses.

Each applicant deserves to have his or her application processed, and at the very least reviewed. Applicants put their faith in the City and its social equity program to rectify the harm they have already experience through systematic oppression. Instead, they have had their resources and funds bled dry as the City continues to stall the licensing process.

Applying through the PCN process would allow for a more equitable licensing process. The City of Los Angeles limits the number of Retail Licenses that can be issued in any given Community Plan Area. Once a Community Plan Area has reached this limit, the area is deemed to have met “Undue Concentration.” Applicants in these regions can submit applications through a streamlined “Public Convenience or Necessity” hearing process, where they can get their applications approved by the City Council following a hearing with input from any relevant community groups and assessment of any local issues. We believe this same process should be made available to all Phase 3, Round 1 applicants who still hold properties and have been waiting to secure approval from the city.

If you would like to make a public comment and offer testimony during this meeting, follow the instructions below:

1. During the Commission meeting before the item you wish to speak on is called by the Commission Chair, dial (877) 853-5257 or (888) 475-4499 (Toll Free), use Meeting ID No. 474 790 208 4284 and press #. Press # again when prompted for a participant ID.

2. When the item you wish to speak on is called by the Commission Chair, press *9 to get on the speaking queue. The Commission Executive Assistant will call out the last four numbers of the phone number to identify and unmute the speaker when his/her turn comes up.

3. If there are no other items you wish to speak on, you may disconnect from this call and dial Council Phone (see below) to listen to the meeting only.

4. Members of the public who remain on this call, will be called on again, should there be another item which allows for the public to speak.

For more information about this post, contact Margolin & Lawrence.

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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.