In case you missed it, at the finish of final month, the City of L.A. lastly decided on what to do with Phase three cannabis licensing with regards to retail and retail delivery (see right here and right here for the City’s newest ordinances). In addition, City Council instructed the Division of Cannabis Regulation (“DCR”) to begin the pre-vetting course of action for social equity applicants for Round 1, Phase three licensing no later than Could 28th, 2019 and to start taking applications for Round 1 of Phase three no later than September three, 2019. This is the initially time the City has provided any indication of when it expects Phase three to lastly open. And when that pre-vetting opens, it is going to be quickly and furious for applicants to file as it will be when Phase three licensing commences.
There are important adjustments to note for this Phase three overhaul. Prior to the commencement of opening Phase three, the DCR need to initially establish social equity eligibility by means of a pre-vetting course of action that will take location for 60 calendar days (see right here for a breakdown of social equity in LA). It is extremely most likely that the DCR will use the exact same social equity eligibility criteria as it did in Phase two to choose who gets to proceed to the actual licensing window. And if you will need to know who qualifies for what beneath social equity, verify out the DCR’s FAQ web page on the subject. The lengthy-awaited “social equity assistance” for Tier 1 and two social equity applicants has to be in location for 45 days prior to Phase three really opening. After social equity pre-vetting is carried out and technical help has been obtainable for the mandatory time, the DCR will open Phase three for the initially 100 Form 10 (brick and mortar retail) licenses on a initially-come, initially-served basis (especially, the initially 75 Tier 1 applicants and the initially 25 Tier two applicants will get licenses if they meet all eligibility needs (see beneath, also)). This is now identified as Round 1. For Round two, which will be for 150 Form 10 retail licenses, this will also be on a initially-come, initially-served basis. Notably, DCR’s determination of no matter if an person is a Tier 1 or Tier two social equity applicant shall be produced with no hearing and is final and not appealable.
The Round 1 window is going to be incredibly short–only 14 calendar days (preceded by a 15 calendar day notice from the DCR). Companies are only eligible to apply if they have a verified Tier 1 or two social equity “Owner” (with the mandated equity share in the small business). Importantly, person cannot be the Tier 1 or Tier two social equity Owner for additional than one particular applicant in Round 1, and EMMD owners cannot act as social equity Owners in this round either.
The distinction in between Round 1 and two is mostly 3-fold: additional licenses will be provided in Round two, additional qualifying information and facts is necessary for Round 1, and the licensing window is longer for Round two displaying that you have proof of ideal to actual home for your industrial cannabis activity is necessary in Round 1 upon filing (and it is not necessary in Round two at the time of filing). For Round 1, applicants need to give more than to the DCR: “1) a copy of an executed lease agreement with proof of a deposit or home deed for its Company Premises two) an ownership and economic interest holder type three) a economic information and facts type four) a Company Premises diagram five) proposed staffing and safety plans six) a dated radius map like horizontal lines and labeling of any sensitive makes use of relative to a Form 10 License 7) a labor peace agreement attestation type eight) an indemnification agreement and 9) all small business records and agreements important to demonstrate that a Tier 1 or Tier two Social Equity Applicant owns the minimum equity share in the small business.” Round 1 companies will not be topic to Undue Concentration unless DCR decides otherwise.
The Round two window is 30 calendar days for 150 licenses that will also go to pre-verified Tier 1 and two social equity applicants. In Round two although, at the time of filing, applicants only have to submit to the DCR “a economic information and facts type a labor peace agreement attestation type and an indemnification agreement.” These 150 applicants will then have 90 days to supplement their applications with the additional robust information and facts necessary by the DCR.
The City also solidified its Form 9 delivery pilot system, which I’ll be covering in additional detail in my subsequent post on Los Angeles cannabis licensing subsequent week.
Irrespective of whether you are shooting for Round 1 or two, now that the DCR has a path forward, it is totally time to get started gathering your proof of social equity eligibility. The DCR has been clear in the previous about the documents it will accept to establish this status, so there’s no time to waste in at least starting to appear at the City’s prior recommendations to get organized for pre-vetting.