L.A. Retail Cannabis Legislation Moves Forward: What Happens Now

Posted by Margolin & Lawrence on April 22, 2019

 

 

Wednesday, April 17 - The City of Los Angeles Rules, Elections, and Intergovernmental Relations Committee discussed and approved an April 12, 2019 report and proposed ordinance from the LA City Attorney regarding cannabis licensing, with recommendations to make some amendments.

All recommendations were approved and will be redrafted for Council consideration and presented on Tuesday, April 30.

Today’s meeting moves the City closer to the opening of the highly anticipated Phase 3, which is the first chance that will allow the general public to receive dispensary licenses. The City Attorney was directed to make requested changes to the proposed new ordinance, to present for City Council consideration on April 30.

 

Notable Takeaways from Wednesday’s Meeting

The City of Los Angeles and the DCR have been hard at work in recent months, particularly as they sort through the specifics of Phase 3. While Phases 1 and 2 focused on existing cannabis dispensaries, non-retailers (i.e. growers and manufacturers), and social equity applicants, Phase 3 has been the main attraction for many entrepreneurs and would-be business owners looking to break into the industry.

In an earlier April meeting, the fate of Phase 3 was largely unknown due to funding. The DCR claimed that licensing was on hold as they awaited the Fee Deferral Program, which would allow Phase 3 to commence.

While a date has not been announced for the opening of Phase 3 applications, Wednesday’s meeting shed some light as to the direction the City and DCR are taking to solidify the process.

 

Among the notable new details that are coming out through these recent meetings and reports are:

● Changes to the Los Angeles Municipal Code establishing a first come, first served application process for retailer commercial cannabis activity licenses, with details regarding what is required for an application to be considered complete

● A proposal to allow applications for retail storefront dispensaries beginning January 1, 2020, in neighborhoods that have already exceeded Undue Concentration caps, with City Council approval

● Modifications to the process for issuing non-storefront retail licenses

● Allowing the Department of Cannabis Regulation (DCR) to grant Temporary Approval to Phase 3 storefront retail applicants

● Exempting Phase 2 applicants from the Undue Concentration requirements

● Setting deadlines for Phase 2 applicants to finalize their business location (May 15) and obtain Temporary Approval (substantial progress by July 1)

● Revising various requirements to qualify as a Tier 3 Social Equity Applicant and revising various benefits provided to Tier 1 and Tier 2 Social Equity Applicants

● Adding an additional reason to deny a license application — if the City has taken enforcement action against unlicensed cannabis activity at the same address since January 2018

● Clarifying the definition of license ownership relative to management companies

 

In addition, one of the recommendations to the draft ordinance that was approved on Wednesday was to instruct the DCR to finalize a timeline for all Phase 3 and Type 9 Pilot activities and post the information on the Department’s website. This indicates that an exact date for Phase 3 licensing could be established by April 30, if not sooner.

 

City Council Action Unanimously Passed Today

Posted by Margolin & Lawrence on April 11, 2019

The LA City Council held a meeting today to follow up on the April 1 meeting of the Budget Committee and approve the recommendations made on April 1.  After a good deal of discussion about the enforcement efforts against unlicensed dispensaries, the City Council approved all the recommendations with only minor revisions.  This means the licensing process can now move forward. 

The funding approved today by the City Council will allow the Social Equity Program to move forward, which is an integral part of the upcoming Phase 3 licensing process awarding cannabis licenses to new businesses in the City of LA.  So far, the licensing has been delayed while the City has worked through issues surrounding the Social Equity Program.  We are still waiting for the City to announce details of the timing of the next phase of LA cannabis licensing.  This phase will start with the issuance of 200 retail storefront and 40 retail delivery licenses, issued largely to Social Equity applicants.  

Now that the City Council has approved the Social Equity funding, we expect the licensing to open up soon, and now is the time for anyone interested in applying to find a property and get all the elements of their applications in order.
Before the ruling on the Social Equity funding, there was an update on enforcement efforts against unlicensed cannabis businesses, including utilities disconnects, cease and desist letters, and search warrants.

So far, the City has been shutting down the illegal businesses bureau by bureau.  The City started the crackdown in the Valley, where it has gone to 22 locations, with 10 more scheduled for next week when it will be finished with the Valley.  Then, it will move to the South bureau, where it will start with 10 locations in the Harbor area, and then move to the Southeast.  The City has also been disconnecting utilities from unlicensed businesses in the past month.  $2.3 million has been set aside by the police department for cannabis enforcement. 

DCR Prepares to Open Phase 3 Applications

Posted by Margolin & Lawrence on April 2, 2019

An Important Step Forward for Los Angeles Cannabis Licensing – DCR Prepares to Open Phase 3 Applications, Starting with Retail for Social Equity Applicants

 Cannabis licensing has been on the lips of hundreds of interested Los Angeles retailers and users for months.  Important steps were taken to move the process forward at yesterday’s meeting of the Los Angeles Budget and Finance Committee at City Hall.  During the meeting on April 1, City reps discussed delays in the licensing due to the delayed funding for the social equity program. It was also revealed that many people in LA have been holding properties for months waiting for the license application process to open up.

In order to continue with the licensing process, based on the specifics of the LA ordinance, the City of Los Angeles needs to issue a set number of retail dispensary licenses to social equity applicants (defined so that people may qualify based on low-income status, having a prior cannabis arrest, and/or living in specified zip codes within the City for at least 5 or 10 years that have had the most cannabis arrests). 

For several months, interested parties have been awaiting the opening of “Phase 3” of Los Angeles’s cannabis licensing program, which is the first opportunity for members the general public to apply for cannabis licenses in the City.  The previous two phases awarded licenses to certain qualified “priority” retail and non-retail businesses who had been operating in the City since before 2016. 

The City is required to issue retail dispensary licenses to social equity applicants on a 2:1 ratio as compared to non-social equity applicants.  To date, the City has issued 178 Phase 1 retail (non-social equity) applications, meaning that it needs to issue 356 social equity licenses in order to catch up with the required ratio.  To start reaching these numbers, the City has proposed issuing 200 licenses (in two batches of 100) to social equity applicants.

This process has been delayed because, under the City’s law, social equity applicants are entitled to receive certain business licensing and compliance assistance, but so far there have been no funds allotted to provide this assistance.  At yesterday’s meeting, the Budget and Finance Committee finally approved funding for the social equity program, meaning the whole licensing process can now move forward.

DCR’s New Tool to Aid Prospective Phase 3 Retail Applicants in Their Property Search & State to Issue Provisional Licenses to Qualified Temporary License Holders

Posted by Zachary Tucker on March 29, 2019

DEPARTMENT OF CANNABIS REGULATION’S NEW INTERACTIVE MAP

The Department of Cannabis Regulation (DCR), the governing agency regulating commercial cannabis activities for the City of Los Angeles, released a new interactive map this week which highlights the number of retail licenses available for applications in each of the 35 Community Plan Areas in the City. The map shows the maximum number of retail licenses approved (i.e., “license capacity”) for each Community Plan Area as well as how many of those licenses are available or otherwise occupied by retailers currently in operation.

The interactive map will be particularly useful for prospective applicants who want to pursue a dispensary license during the next and final round of licensing for the City and need to identify eligible properties for a potential retail location. Many retail licenses have already been distributed which has greatly limited the number of remaining licenses available for application in each Community Plan Area. The limited number of vacant licenses has further complicated the property search process for prospective applicants -- a process already restricted by distance and sensitive use requirements defined by the Los Angeles Municipal Code (LAMC). LAMC mandates that all retail locations be at least 700’ away from other licensed cannabis retailers and other “sensitive use” properties (e.g., public parks, public libraries). Further, it restricts the location of potential retail establishments to nine zones as defined by the City’s planning website through Zimas.

Eligible Zones for Cannabis Retail Locations as Defined by The LA Department of City Planning:

  • C1 Limited Commercial Zone

  • C1.5 Limited Commercial Zone

  • C2 Commercial Zone

  • C4 Commercial Zone

  • C5 Commercial Zone

  • CM Commercial Manufacturing Zone

  • M1 Limited Industrial Zone

  • M2 Light Industrial Zone

  • M3 Heavy Industrial Zone


 

STATE TO ISSUE PROVISIONAL LICENSES BEFORE EXPIRATION OF TEMPORARY LICENSES

Today, the Bureau of Cannabis Control, California Department of Public Health, and California Department of Food and Agriculture announced a plan to prevent lapses in licensure for retailers who have active temporary commercial cannabis licenses that will soon expire. The three licensing agencies are tracking the expiration dates of all active temporary licenses and intend to issue a provisional license to eligible retailers who currently have a temporary license prior to its expiration. To qualify for a provisional license, applicants must:

(1) Hold or have held a temporary license for the same premises and the same commercial cannabis activity for which the provisional license will be issued; and

(2) Have submitted a completed license application to the licensing authority, which must include a document or statement indicating that California Environmental Quality Act (CEQA) compliance is underway.

In today’s announcement, the three licensing agencies urged that any temporary license holders who are contacted by their state licensing authority reply promptly in order to avoid a lapse in licensure.

Hemp and CBD updates

Posted by Margolin & Lawrence on March 20, 2019

Know Your Rights: Understanding State Hemp Regulations

 

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.

Governor Newsom Calls In the National Guard

Posted by Raza Lawrence on February 19, 2019

Are we about to see more enforcement against unlicensed cannabis?

California Governor Gavin Newsom recently announced he is calling for the California National Guard to work with federal officials to target the California illicit market.  Given the history of the war on drugs and the current federal laws imposing harsh criminal and civil sanctions for cannabis, the involvement of the National Guard and the federal government in a new crackdown is concerning.  Governor Newsom’s announcement of this increased enforcement, however, comes amid growing frustration with perceived dysfunction in the state regulatory system and a persistent illicit market that crowds out regulated cannabis.

California has a thriving illicit market in cannabis, estimated by New Frontier Data to be valued at $3.7 billion last year.  This is due to many factors, including California’s unregulated cannabis collectives and cooperatives that operated for years before licensing came, the slow speed at which state and local governments in California have issued licenses, the high taxes and burdensome regulations of the new licensing system, and the demand for California cannabis products throughout the country.

In a sense, the entire cannabis market is an illicit market, as cannabis remains illegal under federal law, which makes any inconsistent California state law allowing cannabis invalid under the Supremacy Clause of the US Constitution. This federal illegality has caused most banks to refuse to do business with cannabis-linked companies, resulting in a largely cash business that is more difficult to track and regulate than it would be if banks were involved.  Federal illegality also makes it so the entire interstate market is illegal and unregulated, though lucrative. 

The California Bureau of Cannabis Control, tasked with regulating cannabis retail sales, has issued a few enforcement actions against some unlicensed dispensaries, but the efforts have been largely symbolic, against only a tiny fraction of the unlicensed operators.  Los Angeles and other cities have also filed misdemeanor cases against unlicensed operators for violations of local licensing laws, but unlicensed dispensaries seem to pop back up faster than they are shut down.

 In order for California’s regulatory project to succeed going forward, the state will need to convince more operators to move to the regulated market, through some combination of greater enforcement and lower taxes and regulatory burdens. 

The large illicit market and slow roll-out of the licensing process have shaken the confidence of many people who are attempting to comply with California laws.  Hopefully, state and local regulators will take advice from frustrated operators, learn from their mis-steps and continue to develop a functioning system.  The state and local governments are trying to find the right regulatory balance.  Over-regulation makes it so difficult and burdensome to comply that only rich people and companies with lots of resources can operate, and an expensive final product that leads many consumers to buy from the illicit market.

For now, many license holders are playing the long game, hoping the illicit market will shrink over time, and more consumers throughout the state (and eventually the country and world) join the regulated cannabis market.  Governor Newsom says that he expects it may take at least five years to develop its complex regulatory system.  If the state gets it right, this can be an industry that drives the state economy, creating more resources and jobs for everyone.

One approach that could be successful would be to offer a more simplified and inexpensive process to get new cannabis businesses up and running.  More burdensome regulations and higher taxes could kick in only after businesses have gotten through the startup phase and adapted to the regulations.  There could be a tiered or graduated system of compliance, taxes, and enforcement that is welcoming to new operators.  Startup costs for new businesses are already very expensive, and high licensing expenses and a burdensome application process can dissuade many people from pursuing licenses who might otherwise want to follow the law.  Lowering the tax rates in the beginning, while businesses get off the ground, could also encourage new entrants to the regulated market.  Once businesses become established and there is a healthy regulated market, taxes could be increased to desired levels.  The government has many tools available to help establish a functioning market.  We are optimistic that the future is bright for the cannabis economy in California.

LA Cannabis Update: New Recommendations from the Los Angeles Department of Cannabis Regulation

Posted by Raza Lawrence on February 15, 2019

Cannabis attorney Raza Lawrence attended today’s special meeting of the Los Angeles Rules, Elections, and Intergovernmental Relations Committee. At the meeting, the discussion focused on three main points:

  • The City of LA is considering and discussing different possible ways to process Phase 3 applications, including a first-come first-served method, a lottery, a “merit-based” system, or some combination of these three methods.

  • It’s possible that the city will lower the percentage of a Tier 1 or Tier 2 social equity business that is required to be owned by the individual who satisfies the social equity criteria.

  • The DCR’s lack of funding, and the need for more funds in order to move forward and process all the applications from Phases 1, 2, and 3.

The current situation with regard to cannabis retail is tense – the city has considered cracking down on non-compliant businesses by shutting off their water and power, among other methods.

To help streamline the city's regulations and ameliorate the pressure that cannabis businesses currently face, the DCR released a report including a set of recommended amendments to the city’s cannabis procedures. The recommendations, as filed with the city, are as follows:

1. REQUEST the City Attorney, with the assistance of the Department of Cannabis Regulation (DCR), to prepare and present an ordinance to amend Section 104 of Article 4 of Chapter X of the Los Angeles Municipal Code and the Rules and Regulations as necessary to:

a. Modify the definition of “owner” in conformance with state regulations, including clarifying that the meaning of “owner” does not apply to the managers, officers, directors, and equity-holders of the management company.

b. Allow DCR to grant Temporary Approval to a Phase 3 storefront retail license applicant after DCR recommends that the Commission issue the applicant a license.

c. Amend “Program Site Specific Conditions” from the Social Equity Applicant to allow for site specific conditions only as required by CEQA, public health and safety, or as necessary under a DCR, State of California, or City enforcement action in conformance with other sections of the rules and regulations.

d. Eliminate a Tier 2 applicant’s obligation to provide business, licensing, and compliance support to a Tier 1 applicant.

e. Require Tier 3 applicants with Temporary Approval to enter into a Social Equity Agreement within 60 days of the enactment of this ordinance or from the time of application, whichever is later.

f. Allow DCR to issue non-storefront retail licenses in the manner provided in LAMC Sec. 104.06(b) and exempt non-storefront retail license applicants from the community meeting requirement in LAMC Sec. 104.04.

g. Clarify that DCR may require an applicant to submit additional information documents after DCR deems an application complete as necessary to make a licensing decision.

h. Remove the requirement in Regulation No. 10 D. 4. that a retailer store all cannabis goods in a vault or safe during non-retail hours.

i. Revise Regulation No. 7 to provide that DCR shall process applications for licenses in a manner consistent with LAMC Section 104 and these Rules and Regulations.

j. Conform the City’s delivery regulations with state regulations with respect to operational requirements.

K. Allow DCR to enter into Social Equity Agreements with a Tier 3 applicant without Commission approval.

l. Clarify LAMC Section 104.20(i)(9) to state that after the term of a Social Equity Agreement is completed, a Tier 1 or Tier 2 Social Equity Applicant license holder may only transfer control or ownership of a License after first providing the other ownership interests in the business the right of first refusal to buy, at market-rate.

m. Clarify the definition of limited access areas to only include those areas required under the rules and regulations of the State of California.

n. Clarify that any applicant or landowner with evidence against them with respect to illegal cannabis activity at any time since January 1, 2018 will be banned from participation in Phase 3 retail and delivery processing.

2. INSTRUCT the DCR to report back at the next Rules, Elections, and Intergovernmental Relations Committee meeting with a further analysis of the recommendations for Phase 3 Storefront Retail processing and Non-storefront Retail processing, including consideration of a social equity applicant registry platform similar to the City of San Francisco.

3. INSTRUCT the DCR to suspend any Phase 3 processing until the enhanced Social Equity analysis for the San Fernando Valley, Boyle Heights, and Downtown Los Angeles is completed.

4. INSTRUCT the DCR to provide an updated map online within two weeks oft he Council action with respect to the current locations of all Phase 1 and Phase 2 applicants that have received local authorization, temporary approval, or any form of local and state licensure. This shall also include an online document with respect to undue concentration areas by community planning areas, and the capacity left for Phase 3 applicants.

5. INSTRUCT the Department of City Planning (DCP) to include amending the pending draft ordinances pertaining to cannabis in conformance with state regulations with respect to alleyway access, ingress, egress, and door location.

6. INSTRUCT the DCP to include amendments to the pending draft ordinances pertaining to cannabis in a similar manner to the City of Seattle, Washington in which two retail establishments may co-locate within 1,000 feet of each other, and the next retail establishment must be 1,000 feet away from both retail establishments.

7. INSTRUCT the City Clerk to hold Council File No. 14-0366-S5 open and active, including the DCR report on file, for further deliberations by the Rules, Elections, and Intergovernmental Relations Committee.

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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.