California Cannabis: L.A. County Releases 2018 Recommendations

L.A. County has some big ideas for cannabis. But are they any good?

On Monday, Los Angeles county’s Office of Cannabis Management published draft policy recommendations that will guide the county in drafting regulations to govern both medicinal and adult-use cannabis businesses in the unincorporated regions of L.A. county. Although these policies are not final, they will surely influence the drafters of the county’s forthcoming regulations. L.A. county plans to release official regulations in early 2018. News from the county comes a week and a half after the City of L.A. approved its regulations to govern medicinal and adult-use cannabis businesses (though questions remain about actual implementation).

From June 29th–August 31st of this year, the county’s Cannabis Advisory Group (CAG) held public hearings to discuss general issues with cannabis regulation, covering topics that included youth access and exposure, public health and safety, personal cultivation, all license types, compliance, taxation, licensing itself, equity, and economic development. The recommendations published this past Monday are based on the information shared during those public hearings.

The county plans to offer the same types of licenses as the state offers: cultivation, manufacturing, distribution, retail, microbusiness, and laboratory testing. The public hearings addressed concerns about wanting to encourage small business and local ownership, so we might see L.A. county implement those concerns by allowing and/or promoting small businesses and local owners regarding getting priority licensing processing or having a different/lower license fee structure.

Still, retail stores may be scarce in LA county. The CAG proposed that the county permit only 20 cannabis stores and 20 delivery-only services in the first 3 years of the local licensing/permitting process. Microbusinesses are included in those counts. This restriction is in response to the large amounts of illegal stores that have been operating in unincorporated L.A. county for years despite the current prohibition on all cannabis businesses. Furthermore, the county plans to phase-in non-retail cannabis businesses. There will be a maximum of 10 cultivation, 10 manufacturing, 10 distribution, and 10 laboratory testing permits for the first 3 years of implementation. With more than 1 million residents living in unincorporated L.A. county, it’s unlikely that these stringent caps will be able to fulfill county demand.

For those seeking to open a business in unincorporated L.A. county, although the regulations have not been created, it’s pretty clear from the CAG recommendations where the county will go with its ordinances. In turn, it is important to start looking at real property that meets the county’s planned zoning. The CAG recommended that retail stores be permitted in C-3 (General Commercial), C-M (Commercial Manufacturing), M-1 (Light Manufacturing), M-1.5 (Restricted Heavy Manufacturing), and M-2 (Heavy Manufacturing) zones. Cultivation, manufacturing, distribution, and microbusinesses should be allowed in M-1 (Light Manufacturing), M-1.5 (Restricted Heavy Manufacturing), and M-2 (Heavy Manufacturing) zones. Notably, the CAG proposed buffer requirements that differ from the State’s 600-foot requirement. The buffer from schools has been increased to 1,000 feet, and there would also be buffers of 600 feet from day cares, public libraries, public parks, alcohol/drug rehabs, and other cannabis stores. There would also be a buffer of 300 feet from stores that sell alcohol. Fortunately, the Department of Regional Planning released proposed locations that comply with the suggested zoning.

The proposed recommendations also discuss the potential for an equity program similar to what has been passed in the City of Los Angeles. However, there are no definitive guidelines, so it is unlikely we’ll see an equity program in the county that’s as elaborate as the City of L.A. in early 2018.

The proposed recommendations provide significant insight into where the county will likely go with its actual cannabis business regulations–stakeholders should review these policies and prepare themselves accordingly as it’s going to be a competitive county in which to run a cannabis businesses.

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