Don't panic. Although the first application cycle for cannabis retail licensing in the City of Los Angeles closed this morning, the real fun is only beginning. After today, the City’s Department of Cannabis Regulation (DCR) will begin to process and review applications submitted in Round 1. Over 800 applications were submitted in the first round, but only 100 applicants will be issued a license through this electronic process. Applicants who are unable to obtain a license in Round 1 of Phase 3 will be eligible to apply for one of the 150 licenses to be issued in Round 2, although it is anticipated that the final round will yield an even larger applicant turnout. However, applicants can apply for a license in an area of undue concentration, and there is no limit on the number of licenses that can be issued through the undue concentration process. Under Los Angeles Municipal Code (LAMC) SEC. 104.20 (Part a.), the number of Social Equity licenses to non-Social Equity licenses is 2:1, which means that if 190 licenses were issues through Measure M Priority Round 1, 380 should be issued through a combination of Round 1 and Round 2 Phase 3 processing, and the "Public Convenience or Necessity (PCN)" process (for areas of undue concentration) described below. If the city abides by its own ratio, 130 retail storefront licenses will be authorized in addition to the 250 through the electronic process.
Just yesterday, the Department of Cannabis Regulation (DCR) opened up the application process for Round 1 of Phase 3 retail storefront licenses in the City of Los Angeles. Due to heavy restrictions and high demand, appropriate locations for these storefronts can be difficult to come by. Many applicants have locations which meet all guidelines, yet still fall within a community plan area that has reached “undue concentration.” Here’s the 411 on what is expected to happen after the opening of Phase 3 Round 1 applications:
Requirements for Phase 3 Application
Individuals interested in Phase 3 Retail and Delivery licensing must submit SEP eligibility verification documents for review by DCR Staff.
Why must I complete the SEP Applicant Eligibility Verification Process?
In order to be eligible to apply in Round 1, Round 2 and the Delivery Pilot in Phase 3, potential social equity applicant must complete this.
When must I do this by?
July 29th, 2019 is the deadline.
Who is eligible to participate in the City’s Social Equity Program?
Individuals who are considered low income ($45,644 or less), have past cannabis arrests and or convictions and those that live in Disproportionately Impacted Areas (districts with the highest cannabis-related arrests) are eligible to participate in the City’s Social Equity Program. (https://cannabis.lacity.org/licensing/social-equity-program). Check to see who qualifies for social equity and priority processing for licensing by taking the quiz linked below.
Please see our quiz on eligibility. (click link)
The City of Los Angeles confirms that there is no maximum number of individuals who can be verified during the SEP Eligibility Verification Process. Therefore, it is not too late to be able to apply for a retail license during Phase 3!
What is the SEP?
The SEP provides applicants assistance in navigating the City’s cannabis licensing process – whether it be technical or business related. This is especially helpful for first-time legal cannabis business owners.
However, if you have additional questions on how to operate a licensed cannabis business, please ask our attorneys at Margolin & Lawrence as the Social Equity deadline is quickly approaching! We are proud to be one of the few jurisdictions in the United States that is persistent on addressing those that are disproportionately impacted by the War on Drugs.