California Cannabis: City of Los Angeles Slowly Issuing Licenses

marijuana cannabis los angeles
L.A. city licensing is moving like 101 at rush hour.

The City of Los Angeles has been slowly issuing temporary approval for Existing Medical Marijuana Dispensaries (“EMMD”). The deadline for EMMDs to receive Prop M Priority Processing is this Sunday, March 4th. Submitting an application prior to Sunday gives EMMDs “limited immunity” to keep their businesses open while the Department of Cannabis Regulation (the “DCR”) processes applications. Those dispensaries that have not submitted an application must close down.

It is no surprise the DCR is completely understaffed and unable to process the volume of applications that have been submitted thus far. On Wednesday, the City Council approved the creation of 21 new jobs for the DCR. For those EMMDs with a valid 2017 Business Tax Registration Certificate (“BTRC”), it has been a relatively easy process for submitting an application. However, Proposition D placed a halt on the issuance of 2017 BTRCs for cannabis businesses and has left confusion among those applicants that have been in business prior to 2007, but only have a 2015/2016 BTRC. The DCR is working to issue temporary 2017 BTRC numbers, so EMMDs who believe they qualify for Prop M Priority Processing have the opportunity to submit an application prior to March 4th.

Thus far, the DCR has approved 112 temporary licenses for the City of LA. Here is a chart showing the current retailer licenses available based on the approved temporary licenses listed on the DCR’s website and the City of LA’s undue concentration requirements. Neighborhoods that were previously anticompetitive, now only have limited licenses available. Businesses that seek to apply for licenses should take into consideration locations that still have many retail licenses available. If your business is located in a neighborhood with limited licenses, then you should prepare all the application information now and be ready to submit once the general public application window opens.

Because the DCR has been overwhelmed with Prop M Priority applications, it has not yet opened the application window, or issued applications, for non-retailer businesses. The City of Los Angeles ordinance states that applications for non-retailer cannabis businesses may be released at the discretion of the DCR, but that DCR may only process applications until April 1, 2018. It is unclear if the DCR will even begin accepting applications for these businesses prior to the deadline, or just make them wait to apply when the general public application opens.

Finally, there is still no date set for when the general public applications will be released, and despite the fact that some L.A. cannabis business are doing very well, the DCR has given no guidance on when the general public can expect to apply for a cannabis business license. In that sense, it will continue to be an uphill battle to receive licensure in the largest city in California. For now, all entrepreneurs can do is prepare their properties and corporate documents and be ready once the application period opens. We will be sure to update when that happens.