Catch Part 1 and Part 2 of our Los Angeles series before reading the third and final article below.

In November 2016, the people of California voted to approve Proposition 64 for the Adult Use of Marijuana (AUMA). This forever changed the landscape of cannabis in California and opened up a slew of opportunities for cannabis businesses.  Los Angeles has been home to the legal medical marijuana market for years. However, it had difficulty monitoring illegal use of medical marijuana. Therefore, the city is taking further actions to ensure their ordinances are crystal clear.

A Social Equity program was also created to promote equitable ownership and employment opportunities in the cannabis industry. Los Angeles has full intentions to issue licenses in the most transparent manner possible.

Los Angeles Cannabis License Requirements

A license is needed for the following commercial cannabis activities.  A license will be issued as one of two categories – A (Adult) or M (Medical).  This information is sited directly from the Los Angeles ordinances, so if you’d like to read it in its entirety, you can do so here.

• Retailer Commercial Cannabis Activity
  • Type 10 – Retailer
  • Type 9 – Non-Storefront Retailer
• Delivery for Retailer Commercial Cannabis Activity
  • Type 10 – Retailer
  • Type 9 – Non-Storefront Retailer

It’s important to note that an applicant may only hold up to 3 Type 10 or Type 9 licenses.

• Indoor commercial cannabis activity
  • Type 1 through Type 5 is defined as:
    • Type 1A – Cultivation, Specialty Indoor, Small
    • Type 2A – Cultivation, Indoor Small
    • Type 3A – Cultivation, Indoor, Medium
    • Type 4 – Cultivation, Nursery (limited to indoor cultivation)
    • Type 5A – Cultivation, Indoor, Large
    • Type 1C – Specialty Cottage Small (limited to indoor cultivation)

An applicant is not limited in the number of license applications. However, each cultivated area may only be licensed 1.5 acres per applicant.

• Microbusiness commercial cannabis activity: Type 12
• Manufacture commercial cannabis activity

• Type 6 – Manufacturer 1 as currently defined or amended by the State of California
• Type 7 – Manufacturer 2 as currently defined or amended by the State of California
• Type N – Infusion
• Type P – Packaging

• Testing commercial cannabis activity: Type 8
• Distributor commercial cannabis activity: Type 11

Los Angeles Cannabis License Application Procedure

If you would like to apply for a license in Los Angeles, you need to fill out and file this application for Commercial Cannabis online. Various fees will be required. Candidates will be ineligible if they fall into any of the following categories:

• If you currently hold office or are employed by the state of California.
• If you have been convicted of any illegal manufacturing practices in the past. There is a bit of leeway, if it happened more than 5 years ago you can apply.
• If you’ve been convicted of violating laws involving wage, labor, illegal sale of tobacco, illegal sale of alcohol or violation of labor laws within the last 5 years.
• If you have been convicted of felonies involving violent crimes, sex trafficking, rape, crimes against children, gun crimes or hate crimes within the last 10 years.

Once you submit a complete application, The Department of Cannabis Regulation (DCR) will require a pre-licensing inspection. The details are outlined in our Rules and Regulations blog (link to our own blog once ready). EMMDs (existing medical marijuana dispensary) are exempt from this inspection. A pre-licensing inspection must be passed before any temporary approvals or licenses may be issued.

The Department of Cannabis Regulation (DCR) will mail applicants notice within 10 days of a complete application. They will also inform and mail the owner of the property and any occupants within 500 feet of the business premise. The applicant is also required to hold a hearing, informing the public of the new cannabis business that may be opening within their neighborhood.

Issuance of Los Angeles Cannabis Licenses

• Retailer Commercial Cannabis Activity or Microbusiness Commercial Cannabis Activity
  • Within 60 days of the completed application and pre-license inspection, the applicant will know if a license will be issued.  The DCR can deny licenses based on their own discretion. However, it is stated that if an application is denied, it is likely because the applicant misrepresented the business space or documentation.
  • If the DCR grants approval, then the Los Angeles Cannabis Regulation Commission shall make the decision to issue the license after a public hearing.
• If your business is a non-retailer conducting commercial cannabis activity in a business premise of less than 30,000 square feet, you will have different processes than a business who has a facility greater than 30,000 square feet.  Refer to this document on page 10 for details.
• Testing Lab Licenses: If you are seeking a testing lab license (Type 8), you may submit an application to the DCR any time after they accept applications for other types of licenses.

The Appeals Process

If you would like to appeal the DCR’s decision or denial of your license, you must do so 15 days from the mailing date of the DCR’s decision. If not filed within 15 days, the appeal is automatically rejected. Click through for more information on page 14 of this document.

Likewise, if you do successfully submit your appeal, the appellate body shall issue its decision within 30 days of the closure of the hearing on the appeal. Unfortunately, if the appellate body does not come to a decision within this time frame it is considered a denial.

Other Must-Know Info for Getting a Los Angeles Cannabis License

Your license is non-transferrable. The only exception to this is if you submit your case (and there’s been an organizational or ownership. Although this is a detailed post, the city of Los Angeles issued a highly comprehensive document that goes into further detail, so we recommend taking a look if you’d like further detail about any of the above topics.

Still looking for some guidance on the licensing process? Let Green Growth CPA make sense of it all. Contact us today with your questions and we can get you started.