Los Angeles Phase III Update

Recently, the Department of Cannabis Regulations (DCR) in the City of Los Angeles drafted an ordinance amendment. Phase III as it currently stands is being considered for retail and delivery. The ordinance also calls for new cultivation distribution and manufacturing permits. However, this has not been discussed in recent DCR communications. So, for now the only licenses being offered are retail and delivery. Under the current proposal DCR made on February 8th, there will to be 100 new retail licenses available to Social Equity applicants and there will be 60 delivery permits available for the first round of licensing. 40 of those are going to go to Social Equity applicants and 20 will go to general. To qualify for Round 2, an applicant must have an individual “owner” that is a Tier 1 or Tier 2 Social Equity applicant that’s already been verified by the City.

The key point of the licensing program is the Social Equity Program (SEP). DCR has defined the social equity program. If you want to apply for a dispensary, you have to be a social equity applicant or team with one. In order to apply, you or your partner would have to fit within three categories. The First category includes people with low incomes who have a prior California cannabis arrest or conviction. If you had an attorney that got your charges dismissed, you can still qualify as long as you were arrested, and that needs to be before licensing started. The second category includes those residing in a disproportionately impacted area for five years plus being low income. The third category applies to people residing in a disproportionally impacted area for 10 years and that does not require low income. 

Determining the neighborhoods that qualify as disproportionately impacted, there is a list of zip codes in the ordinance, but you also need to verify that you are in the police reporting district that has a disproportionate number of arrests. For low income, it’s approximately $45,644 per year for the past two years In LA.

If your goal is to be awarded a retail license in Los Angeles, it is in your interest to participate in the Social Equity Program. To qualify, you do not yourself need to actually qualify for SEP. You can partner with someone who does and Tier one and Tier two of the Social Equity Program require 51% ownership by Social Equity Applicants for Tier one and Tier two is 33.33%. As long as you meet these requirements, you’ll be in the running!

MJ Legal is now offering Social Equity Applicant matchmaking for Cannabis entrepreneurs, as well as Social Equity verification.

If you would like more information about Phase III Cannabis licensing, please call us at 310-893-3262.

We look forward to working with you!

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