Top 6 Most Frequently Asked Questions When Applying for a Cannabis License in Los Angeles
1. What is the Los Angeles Social Equity Program?
The Social Equity Program sets requirements that applicants must meet in order to apply for a license in Los Angeles under Phase 2 licensing. Phase 2 licensing begins on August 1, 2018 and lasts for 30 days. To qualify as a social equity applicant, one must have been convicted or arrested of a ‘qualify[ing] cannabis’ offense or conviction before November 8, 2016 within the State of California and/or meet certain residency and income restrictions. The residency restrictions require an applicant to have lived for 5 or 10 years cumulatively within certain qualifying zip codes that the City of Los Angeles has determined were ‘disproportionately impacted’ by the War on Drugs. To be considered low income an applicant must have earned he income requirements requires an applicant to have earned less than 80 percent or below of Area Median Income for the City based on the 2016 American Community Survey, which is right around $41,230.40.
Even if you don’t think you qualify as a social equity applicant, you may qualify as a “Tier 3” applicant by either entering a contract with a qualifying social equity applicant to help them with their cannabis business or by paying a fee to the City in order to allow the City administer and assist other qualifying social equity applicants.
2. What's the first thing I need to apply for a cannabis license in Los Angeles?
Real estate. The most critical component of a cannabis application is the applicant’s ownership, lease, or authority to operate in a compliant location. Los Angeles has initiated a complicated scheme to determine which properties are eligible for certain types of businesses. Each properties eligibility to operate a cannabis business hinges on multiple factors, including the type of proposed using, the existing zoning and allowable uses of the property, available infrastructure, such as water and electric, and the location of any nearby ‘sensitive use’ entities, such as schools. We can help you determine if your potential property is compliant with your desired use. Our experience in real estate and regulatory compliance is invaluable at this critical stage of the licensing process.
3. Can I apply for a Los Angeles Marijuana License if I only have raw land?
Probably. You may be able to begin the licensing and ‘entitlement’ process with raw land that is located in the appropriate area. You will need detailed architectural, engineering, and floor plans to get started. You will need to complete construction of the facility before receiving any final licenses, and likely will not be able to operate at that location before you receive any license. Also, developing raw land is extremely costly and should not be attempted by amateur investors. We can help you assess whether your piece of raw land is in a cannabis designated area before you break ground.
4. What is a security plan and do I need one?
A security plan is a written description of the security measures that a cannabis business will take to ensure that the business will operate in compliance with state and local law. The State of California and almost all local jurisdictions require cannabis businesses to have certain security measures in place as part of the licensing process. These measures include installing security alarm and camera systems, using access control procedures, establishing an inventory tracking system, and safeguarding sensitive data and information. Each cannabis business is required to prepare and submit a security plan as part of the State and most local licensing procedures.
5. What happens after I submit my medical or adult-use cannabis application with the Los Angeles Department of Cannabis Regulation?
After you submit your commercial cannabis licenses the Department of Cannabis Regulation will conduct pre-license inspections. Pre-license inspections will include: (1) review and approval the premises diagram submitted with the application; (2) an on-site inspection to ensure that your business meets applicable building, safety, and fire codes; (3) review and approval of your security plan; (4) fingerprinting necessary to complete any eligibility background checks; and; (5) approval of the fire safety plan for cultivation and manufacturing license applicants.
6. Does the Los Angeles Department of Cannabis Regulation inspect cannabis businesses after the business has received its license?
Yes. All commercial cannabis businesses are subject to regular inspections and audits by DCR. An inspection or audit includes a review of the businesses books and records, including its point-of-sale system and inventory tracking systems. Inspections may also include inspections by fire or building and safety personnel to ensure that the business is operating in compliance with all applicable regulations and City Codes. Cannabis Businesses are required to allow DCR personnel and their agents access to their business premises during normal working hours to ensure compliance. DCR does not have to give Cannabis Businesses advance notice of any inspection or audit. If you are subject to an inspection or audit, call our offices immediately and we can help.