Law & Industry

Los Angeles Moves to Next Round of Cannabis Retail Licensing

The City of Los Angeles just wrapped up round 1 of phase 3 cannabis retail licensing. A total of 802 applications were submitted in what will be become the largest cannabis retail capital of the world – many say it is already there, and yet 250 retail licenses have yet to be issued.

For many, the moments leading up submission were a culmination of years and months of hard work, anxiousness, and hurry-to-wait pacing. A list of awardees can be found here. The first 100 that meet the criteria of round 1 will be awarded the much-coveted retail license. There are no assurances on how this will shake out, but it will be interesting to see the final list of 100 applicants.

Lives will change very quickly when this happens, and for those social equity applicants who make it through and who were affected by the War the Drugs, this would offer a life-changing opportunity.
While this all shakes out, the following are some points to keep in mind as you prepare for the next round of licensing, and are also some essential things to keep in mind as you track what is happening in Los Angeles:

  • Though a preliminary list of top 100 applicants have been issued, there is likely to be a lot of shift. Applicants may get bumped for several reasons: priority of tier 1 vs. tier 2, incomplete application or incorrect documents, in-compliant property or, areas meeting a soft cap requirement.
  • Based on extensive anecdotal evidence and observations, there were technical glitches in the submission process that have been reported to the city. There were even some claims of alleged ‘robots’ that entered the system, but the city has indicated no foreign intrusions. For those looking to appeal their time-stamps and the application process for whatever discrepancy they claim, there is no formal appeal process announced just yet.
  • Regardless of the outcome, round 2 still presents an extraordinary opportunity for social equity applicants and partners to pursue a retail license. An estimated 150 licenses will be issued in this round. According to city officials, round 2 is looking like it will also be a first-come, first-serve basis model. There is also speculation that the application will also be merit-based; thus based on a point system. The final guidelines on this are not clear yet but should be coming out soon.
  • For Round 2, real estate will not be required as part of the application process. This is great news for applicants. If applicants are approved, they will have 90 days to be in the property. What is not clear is whether having real estate will generate more points on the citys point system. This, of course, will be a massive point of interest for applicants, given what headaches came with securing property in round 1.
  • The city is still looking to launch a delivery pilot program before the new year. The city is expected to open 60 delivery applications (20 for tier 1, 20 for tier 2, and 20 for general applicants). Formal announcements with guidelines have yet to be made but should be
    coming soon.

All and all, the cannabis industry in Los Angeles has yet to settle into the mecca of cannabis; it is expected to be. Licensing is still shaking out, and the city’s full supply chain has yet to be materialized. Nevertheless, there is a positive movement happening, and progress is starting to show. There is much to be optimistic about, and plenty of opportunities are still out there for us to collectively look forward to.

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