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.
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
On Tuesday
night, the city of Pasadena hosted a presentation on cannabis licensing with a planning consultant. Here is what we learned from the meeting.
Regulations for cannabis businesses were voted in on
June 5th
by Pasadena voters. As a pragmatic and conservative city, Pasadena's licensing focuses on exercise of local control – with the aim of protecting its residents from secondary effects through land use regulation.
The application period is from
January 1st to January 31st at
11:59 p.m.
There will be a notice of the 30-day period on
December 14th. Currently there is a draft of the review criteria available. The final criteria will be released on
December 14th.
The whole application, as well as payments, may be submitted electronically. Pasadena's selection committee will not give special weight to applications submitted on
January 1st
versus
January 31st, and will not look at anything until the application window closes. The application fee will be approximately $10,000 per category.
The application requires qualifications of the operator, cover letter, business plan, background, experience dealing with government agencies, neighborhood compatibility and enhancement, and security plan. The limit is 50 pages of text and images. You do not have to have a confirmed site in order to apply.
When the application portal closes, there will be an initial screening of applications - did the applicant answer all questions? is the application in full compliance? - to ensure the application is complete and responsive.
Once applications are scored, top applicants will be notified and will have the
opportunity to go forward and secure land use permits and public
health permits – this is period when you need to lock down your sites,
look at buffer zones, and so on. These sites must also be located at least 1,000 feet from
any other cannabis retailer.
All the scoring will be based on written submissions, but the city reserves the right to start an interview process of the final applicants.
Pasadena will allow up to 6 retail permits in the city, one per council district, so long as they meet the required separation from schools, parks, and residential properties.
Another point about delivery: people with licenses in other cities are allowed to deliver in Pasadena. Pasadena will not have separate delivery licenses, but the retail licenses will allow both storefront and delivery.
Pasadena will allow up to 4 cultivation sites in the city, indoor only. These cultivation sites must be in commercial general and industrial general zones.
Pasadena will also allow 4 testing laboratories in the city where other medical labs are allowed.
For more information from the workshop, see the handouts at the
City of Pasadena website. These include details of the proposed scoring system.
