As we prepare for January 1 and recreational cannabis in California, many legal questions remain for cannabis businesses. In this video, Los Angeles Cannabis Attorneys Margolin & Lawrence explain the local and state licensing process for cannabis businesses in California. If you are looking for a high level overview of what you will need to do to start a cannabis business, or get your existing cannabis business into compliance, this is the place to start.
L.A. County released long-awaited draft cannabis regulations yesterday. The Board of Supervisors, which creates laws that govern all of the unincorporated areas of the county (any area that is not part of an incorporated city) has been listening to the findings of the Cannabis Advisory Group over many months and has released the zoning requirements that will apply to commercial cannabis in the county, as well as the activities that will be licensed.The County will be issuing for Adult-Use (recreational) and Medical cannabis uses. Our LA cannabis attorneys have reviewed the proposed cannabis regulations and our findings are below.
At a meeting this week, the LA City Council adopted a draft ordinance on the subject of the fees and fines for cannabis licensing, bringing the city one step closer to opening its official cannabis licensing process. Our Los Angeles Cannabis Lawyers are often asked how much the compliance process will cost. Now that LA has published their fee schedule, many existing cannabis businesses have sticker shock. Existing cannabis retailers, for instance, will have to pay nearly $10,000 for an official LA retail license. Cannabis microbusiness owners will need to pay fees for each cannabis activity they are conducting. The City will likely only accepting payment in cash or by check (no bitcoin, yet).
Yesterday the LA City Council passed three ordinances that will regulate recreational cannabis sales, manufacturing, cultivation, distribution, delivery, and microbusiness in the city of LA. The council also voted on the Social Equity Program and cannabis zoning, including the setbacks from sensitive-use areas that will be required of licensed cannabis businesses. Volatile cannabis manufacturers, for example, will have to be not only 600 feet away from schools, but also at least 200 feet away from any residential parcel.
The city is also imposing caps on the number of licenses granted per neighborhood, so licensing will be a competitive process in some areas; if you haven’t already, now is the time to start preparing your cannabis business for licensure. The city has rigorous requirements for proof of operation in compliance with Prop D if your business is a pre-ICO, as well as strict safety and environmental regulations for marijuana cultivators and manufacturers.
The new regulations passed by the city can be found here:
If you are a cannabis operator with an existing marijuana business in the city of LA, email us at firstname.lastname@example.org to speak with one of our cannabis attorneys. We can advise you on the next steps for your operation as Los Angeles enters a new era for cannabis.
Cannabis attorney Allison Margolin addressing the LA City Council on the new zoning regulations on Monday:
Today the LA City Council will vote to determine all of the City's. the city's new restrictions on where a cannabis business may be located. The current California cannabis law requires that cannabis businesses be located more than 600 feet from all schools.
On top of that, LA's most recent draft of its location ordinance required businesses intending to conduct on-site retail sales to be located 750 feet away from sensitive-use areas, including schools, public parks, libraries, and drug treatment facilities, as well as any existing marijuana retail business.
While this is a more lenient approach to sensitive-use areas than LA's previous zoning restrictions, which called for an 800-foot buffer zone, some cannabis businesses and marijuana advocates, including our Los Angeles Cannabis lawyers, argue that introducing two different distancing standards will only complicate the already-opaque standards for marijuana zoning.
The City Council's vote will take place at 10 A.M. tomorrow, December 5th, at 200 N. Spring St.
As we approach the Thanksgiving holiday, Los Angeles is one step closer to cannabis licensing. Here is the latest from our Los Angeles cannabis attorneys who attended today's City Council meeting. Today the Council further discussed the Social Equity Program and the 4 Tiers of priority that will be given to eligible applicants. Tier 1 will get the highest priority for Los Angeles cannabis licensing (after Measure M Retail priority which you can read more about here), and Tier 4 will get the lowest of the Social Equity applicants.
Today, California’s three state cannabis licensing authorities released proposed emergency licensing regulations for commercial medicinal and adult-use cannabis. The regulations are intended to reflect the law that was set out in California’s Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), and will replace the draft regulations that were released for cannabis cultivation, manufacturing, retail and other activities in April 2017 (you can read more about the prior regulations in our post here). These regulations will allow the state to start issuing temporary licenses to conduct commercial cannabis activities on January 1. Our San Francisco and Los Angeles cannabis attorneys are analyzing the new regulations and comparing them to the previous draft and we will do a more in depth post on what has changed very soon.
On November 5th, the City Council of West Hollywood put an end to a long period of speculation about the future legal status of cannabis in their jurisdiction, moving to allow recreational and medical marijuana dispensaries, delivery services. In particular, the WeHo City Council approved of allocating 8 licenses per type of cannabis activity (Adult-Use retail, Consumption Areas with On-Site Adult-Use retail, Delivery Services, and Medical-Use dispensary,) and confirmed this decision on the morning of November 8th. These activity types are of interest in themselves: Allowing retail spaces to provide an area for on-site consumption means WeHo might soon be the home of hip, Amsterdam-style marijuana cafés.
While this explains quite a bit about West Hollywood's approach, some aspects of the city's regulations remain unclear. For instance, the exact selection process for the 8 licenses per activity has not been decided by the City Council. Moreover, the zoning regulations for marijuana businesses have also not been finalized by the city. To address these questions, the City Council of West Hollywood will meet again on November 20th to discuss zones and grading criteria for licenses. The City Council has given itself a deadline of December 6th to resolve these issues, which it hopes to meet before the new laws come into effect on January 1st.
As it stands, what our cannabis lawyers know about the future process for license application selection is as follows: The top eight applications will be issued licenses based on merit. Some of the criteria in consideration for "merit" will include compliance with the city's social equity program, operating a pre-existing cannabis business that's in good standing in WeHo, or previous experience with a cannabis business elsewhere in the state. Again, these criteria have been merely discussed and not approved. Once the criteria are fixed, the city will essentially grade each application based on the standards they establish.
Since relatively few licenses will be granted, it is imperative for any marijuana business applicant in West Hollywood to not only meet the criteria set out by City Council, but also to provide adequate reasoning for why its merits qualify it to be chosen over the other applicants. The application period will be open in January 2018 for a period of 30 days; since the timeframe is so short, if you're interested in starting a cannabis business in WeHo, it's important to get started on the application process now.
Last week, our Los Angeles cannabis attorneys were at the City Council meeting where the Council moved to amend the Draft Regulations that were previously released on September 22, 2017. The Los Angeles City Council moved to amend the Draft Regulations released on 9-22-2017 to include a motion that will allow cannabis operators who meet certain requirements to remain open if they file for limited immunity within 15 days of applications opening. You can read more about the Draft Regulations from September in our previous posts here and here.
Thanks to everyone who came to our first Freedom of Information session about Los Angeles Cannabis Licensing!
This weekend was the second annual The Edibles List Infused Expo in DTLA. As LA Cannabis lawyers, our firm is tracking the City's development of regulations and also California's. This weekend, the focus was on edibles.
As California prepares to start issuing cannabis cultivation licenses on January 1, 2018, the state is becoming more transparent regarding the exact requirements for legal cultivation under the new regulatory regime. Our cannabis lawyers are often asked how you can prepare for licensing - here is your answer. The California Department of Food & Agriculture’s just released a full checklist of requirements for the Cal. Cannabis cultivation application, now available in .pdf form on their website.
These requirements represent an important shift in the state’s attitude when it comes to cannabis cultivation – in particular, the checklist shows that California plans for far more robust cooperation between state and local regulatory authorities than has existed in the past. As Merry Jane writes in an article about the checklist, “Unlike the current cat and mouse games canna-businesses play with local municipalities under the wild west rules of Prop 215, California’s new system will see increased coordination between state and local governing bodies by requiring licenses for cannabis operations at both levels.” Our Los Angeles cannabis attorneys have witnessed both the wild west and the implementation of the new system as cities and counties around California issue their own permits and licenses.
This two-level licensing structure also means that the process of applying for a cultivation license will be an arduous one, with applicants required to jump through a long series of bureaucratic hoops in order to attain legal status. The full State requirements, as listed in the checklist, are as follows:
- An existing local cultivation permit (optional, but recommended)
- Proof of the applicant’s right to occupy the property used for cultivation
- Business formation documents filed by the California Secretary of State’s office
- California State Water Resources Control Board permits and verification of water source
- California Department of Fish and Wildlife’s 1602 permit or a waiver
- California Department of Toxic Substance’s hazardous materials record search via their EnviroStor data-management system
- California Department of Fee and Tax Administration’s seller’s permit
- Labor peace agreement (for operations that will employ more than 20 people)
- Surety bond valued at $5,000
- California Department of Justice fingerprinting via its Live Scan service
The checklist also includes a list of local permits that may be required, including those issued by the municipality’s Building Department, Public Works Department, and Sheriff’s Office. The takeaway is clear; while Jan 1, 2018, may seem very soon to aspiring cannabusiness owners, getting a legal license to cultivate cannabis won’t be possible without a lot of paperwork.
While there has been much debate over LA’s recent Draft Regulations, not much has been stated clearly about how to prepare for the LA license application process. You can read more about the draft regulations here, here, and here. Below is some guidance from our Los Angeles Cannabis Attorneys. As you know from our previous posts on SB 94, you will need City or County authorization in order to apply for a State License. The areas you can start preparing for fall into a few main categories: real estate, taxes, corporate documents and financial planning.
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.
On September 22, 2017, the City of Los Angeles released Revised Draft Requirements for Commercial Cannabis Activity in the City. Our LA cannabis lawyers have analyzed the regulations and compared them to the June 2017 draft, and there are drastic differences that will affect large portions of the thousands of cannabis operators within the City.
The major change is that only dispensaries will be allowed to apply first - under Priority licensing - to the City. Originally, cultivators and manufacturers that could prove they had been operating since before January 1, 2016, were going to be able to apply along with dispensaries who had a 2016 or 2017 business tax registration certificate from the City (BTRC). Now, all cultivators and manufacturers will apply in the Social Equity or General Processing round, which will be held at the same time.
The number of dispensaries that will qualify for priority has been expanded to include dispensaries in compliance with the current medical marijuana laws that have a 2015 or later BTRC, in addition to those that have a 2016 or 2017 BTRC (the original group that would receive priority). You can read more about the prior draft here.
Additionally, cultivators and manufacturers who could prove operation before 2016 under the June regulations were going to be able to receive certificates of compliance that allowed them to continue operating. This is no longer the case. Only dispensaries that are preexisting and meet the criteria will be authorized to continue operations under the current draft.
Under California’s SB-94 (aka MAUCRSA), the retail sale of marijuana products to consumers is only legal if the business owner holds a license for cannabis distribution. Since this covers all sales of cannabis products, from marijuana proper to derivatives like hash oil and CBD, these licenses are in high demand. Many clients often ask our cannabis lawyers what happened to the Transportation license. This was a license type under the MCRSA but that provision was repealed in SB 94 and the activities covered by the old Transportation license have now been merged into the Distribution license. So, the state license is now for the same activity but under a different name.
In order to qualify for the state license, your business must first hold a local license (or local authorization), which can only be granted by the municipality the business intends to operate in. For those eager to enter the world of cannabis distribution, the question is: which cities are giving out these licenses? Here are a few cities that have distribution in their ordinance and are either already issuing distribution licenses or are on the road towards doing so:
- California City
- Cathedral City
- Desert Hot Springs
- Long Beach
- Los Angeles (expected* but we will have to wait for the Ordinance to be sure)
- Nevada City
An ordinance does not necessarily mean that it will be easy to secure a license. Many cities put heavy restrictions on how many distribution licenses will be granted, and the regulations that must be complied with are robust.
Regarding Los Angeles, all indications appear that LA will allow this cannabis activity. However, the City has until September 30th to promulgate an ordinance, and we will not know for sure until we see the final version. The fact that they have included distribution in the draft location ordinance (which you can read more about here and here) and in the operating requirements suggests that they will. Stay tuned for updates from our LA cannabis attorneys as the City’s local regulations take shape.
One of the hot topics within the LA cannabis community is priority licensing. In this post, our LA cannabis attorneys will explain what priority licensing is within the city’s licensing schema, and who qualifies for it. A recently released survey from the State Department of Agriculture found that there were 2,718 cannabis operators in LA County interested in obtaining licensing for their business. Of course, the County of LA still has a ban in place on all cannabis activity which applies to unincorporated areas. For those operators who are located within the City, you may qualify for priority licensing if you were conducting cultivation or manufacturing within the city limits before January 1, 2016 and can prove it; or, if you are a dispensary and can show a valid 2016 or 2017 BTRC for your place of business. You can read more about what evidence you can use to qualify for priority here and more about LA's zoning requirements here. In other words, you don't have to have been around for centuries, as long as you can show continuous operation from the past 21 months and meet the City's other requirements.
Los Angeles cannabis lawyers are often asked "but what about CBD?"; this post is part 2 of our series on the extract.
As a derivative of cannabis, CBD is currently considered a schedule I controlled substance. However, although cannabidiol has psychoactive effects, it’s very different in effect to other, better-known cannabinoids such as THC; CBD doesn’t produce a mentally altered state or any type of euphoric ‘high.’ Instead, its main purpose lies in its wide variety of therapeutic uses. The Huffington Post writes that “CBD is a powerful anti-epileptic, anti-depressant, anti-inflammatory, anti-nauseate, sleep aid, muscle relaxant, sedative and anti-proliferative.” In other words, distilled CBD is a broadly useful form of medical marijuana that comes without traditional marijuana’s ‘drug-like’ effects. This explains why the FDA is willing to label it “beneficial.”
Of course, the medicinal value of CBD doesn’t exactly come as a surprise. As the NORML foundation writes in its statement on the FDA’s request for comment, “Seventeen states explicitly recognize [...] CBD as a therapeutic agent. Safety trials have determined the substance to be non-toxic and well-tolerated in human subjects and even the head of the US National Institute on Drug Abuse has publicly acknowledged that CBD is ‘a safe drug with no addictive effects.’” In other words, CBD is already widely understood to be beneficial. However, having the Food & Drug Administration call it “beneficial” may prove useful to the effort to have it legalized.
Despite the acceptance of CBD use in individual states, the current policy of the U.S. Justice Department, as led by Trump administration Attorney General Jeff Sessions, is to treat all forms of marijuana as schedule I controlled substances. (For more information on the current legal status of marijuana, consult our “Do I Need a Cannabis Lawyer?” blog post and California Cannabis Law FAQ.) The DEA issued a clarification in December 2016 confirming its position that it considers CBD a Schedule I substance.
This statement by the FDA might complicate that strategy, as would a WHO decision in favor of easing international restrictions on CBD: If one branch of the federal government believes that derivatives of marijuana can be straightforwardly beneficial, another branch treating them the same as dangerous narcotics doesn’t seem reasonable. In this sense, the text of the FDA’s request may be an asset to U.S. groups seeking an end to marijuana prohibition.
Cannabis, via a wide variety of consumption methods and in a myriad of forms, has a long history of use as a pain reliever. In this post, our los angeles cannabis lawyers tackle the topicals and Type 6 non-volatile cannabis manufacturing licenses.
Los Angeles cannabis lawyer Allison Margolin spoke at the State of Marijuana conference this past weekend. In this video clip, she gives an overview of the cannabis licensing process in California. If you haven't heard, you need to get local authorization (which can mean a license or something less official like local government officials signing off on your project to the state) in order to apply for a California cannabis license when it becomes available January 1, 2018. Our cannabis attorneys are familiar with local jurisdictions statewide and are actively advising our clients on the nuances and complexities of zoning, the application process, and compliance with local ordinances.