APPLICATIONS DUE SEPTEMBER 3RD 2019
Los Angeles will begin licensing cannabis retail businesses as part of the Phase 3 licensing process. This represents the first opportunity for new operators to apply for cannabis business licensees in Los Angeles. Phase three offers the opportunity to obtain both storefront retail and delivery licenses. Initially,100 storefront retail licenses will be issued.
Prior to Phase 3 licensing, the Department of Cannabis Regulation (DCR) has verified Social Equity Program applicant’s eligibility during a 60 day “Pre-Vetting” process. The DCR is currently finishing the pre-vetting process for Social Equity applicants. Application submittal for Round 1 of Phase 3 begins on Tuesday, September 3rd, 2019 at 10am PST.
Verified Tier 1 and Tier 2 applicants will receive the first 100 licenses. These will be issued on a first-come, first-served basis. 75 of the first 100 will go to Tier 1 applicants. After licensing the first 100 Type 10 licenses on a first-come, first-served basis, the DCR will issue roughly 150 Type 10 licenses. These will also be issued on a first-come, first-served basis. The use of a merit-based system or lottery system had been discussed, but ultimately the DCR adopted a first-in-line system. Additionally, the first 60 delivery license applications will be processed as part of a delivery pilot program.
In order to qualify as a Social Equity applicant for Phase 3 licensing you must meet the criteria below:
TIER 1
1) Have an annual income 80 percent or below the Area Median Income for Los Angeles based on the 2016 American Community Survey and a prior California Cannabis Conviction,
OR
2) Have an annual income 80 percent or below the Area Median Income for Los Angeles based on the 2016 American Community Survey and a minimum of five-years cumulative residency in a Disproportionately Impacted Area (DIA).
A Tier 1 Social Equity Applicant shall also own a minimum of 51% equity share of the business.
TIER 2
1) Have an annual income 80 percent or below the Area Median Income for Los Angeles and a minimum of five-years cumulative residency in a Disproportionately Impacted Area;
OR
2) Have minimum of 10-years cumulative residency in a Disproportionately Impacted Area.
A Tier 2 Social Equity Applicant shall also own a minimum of 33 1/3 percent equity share of the business. They must also enter into a Social Equity Agreement with the City to provide business, licensing and compliance assistance to Tier 1 participants.
TIER 3
A Tier 3 Social Equity Applicant shall enter into a Social Equity Agreement with the City to provide capital, leased space, business, licensing and compliance assistance to Tier 1 or Tier 2 Social Equity Applicants. A Tier 3 Social Equity Applicant shall provide Tier 1 Social Equity Applicants access to property with no rent and with prorated utilities for a minimum of two years.
INTERESTED IN APPLYING?
If you would like to determine whether you qualify as a social equity applicant, need help drafting or reviewing your application, or have any general questions about cannabis licensing in California, contact our office today. Also, be on the lookout for our follow up blog about a social equity applicant’s ability to transfer ownership.