Last week, Los Angeles announced the city will begin the process for licensing cannabis manufacturers and cultivators starting August 1. Though it will take months before a manufacturer or cultivator will be fully up and running in the city, this step signifies a green light for anyone hoping to eventually apply for one of these licenses in Los Angeles.
Los Angeles has been hesitant to fully license growers and manufacturers. As we covered in our three-part Los Angeles city guide, the current process for getting a cannabis license includes a tiered review of legal requirements and inspections that an applicant must pass. Retailers have started to open – roughly 150 retailers have been approved so far – but the rest of the market has been delayed.
One of the reasons for the delay is that Los Angeles still has a high number of unlicensed operators. The city’s cannabis black market is thriving. By some estimates, more than 640 cannabis businesses are operating in Los Angeles illicitly. That far outnumbers the handful of retailers that have been approved and licensed. Los Angeles has been unable to discourage black market operators for a few reasons: there aren’t enough officers to enforce cannabis regulations, and high taxes paired with low penalties don’t incentivize black market operators to become compliant.
As we’ve covered in previous posts, getting a cannabis permit is a costly and time-intensive process. We fully expect that Los Angeles will eventually crack down on this black market with more punitive measures. This week’s announcement from Los Angeles should trigger potential grower and manufacturing applicants to begin to locate real estate, ready their operations for inspections, and anticipate some of the biggest areas the application will cover. Our experts advise that when you submit a cannabis business application, your business must be close to 75% ready to open; so, when the final approval comes through, your operations are running smoothly.
What are some of the first steps you should take toward getting a cannabis license? Find real estate and select your jurisdiction are the first two things you should do. This article gives you the three first steps to starting a cannabis business.
There’s no timeline at this stage for Los Angeles manufacturing and cultivation licenses. Stay tuned and follow Green Growth CPAs for all future updates on Los Angeles’ cannabis market!