City of Los Angeles Releases Commercial Cannabis Regulations

The City of Los Angeles maintains commercial cannabis regulations that inform cannabis-related businesses of the requirements to obtain a city business license. Importantly, a local license is a prerequisite for approval by the state Department of Cannabis Control (DCC). These regulations also reflect the high standards set by officials. We recommend reviewing the full set of commercial cannabis regulations. However, below we cover a few points most relevant to cannabis retailers and dispensaries.

Dispensary Inspections

First, prepare to be inspected. The Los Angeles Department of Cannabis Regulation (DCR) sends an agent for a pre-license inspection once a retailer submits a completed application. Passing this inspection makes your business eligible for a temporary or permanent license. Moreover, once you’re approved for your cannabis business license, you must continue to meet all regulatory requirements. After all, DCR agents are allowed to inspect your dispensary without notice. Failure to comply with these surprise inspections could cost you thousands in fines, or even be grounds to revoke your license. The lesson is simple: keep your cannabis retailer consistently compliant with the commercial cannabis regulations.

Retailer Requirements

Every marijuana dispensary must meet specific commercial cannabis regulations to stay in business. We’ve outlined the major retail obligations below, so you can be prepared:

• Business licenses are non-transferable, however, if there is a change in ownership the Licensee can submit a change in ownership application to be reviewed and approved by DCR.

• The name and contact number of the neighborhood liaison is required to be displayed and visible from outside the cannabis retailer.

• A retailer business license must be prominently displayed on the premises and visible from the exterior of the storefront.

• You are required to appoint or designate a supervisor or manager to be in charge at all times during business hours.

• Licensees must attest they will not manufacture, prepare, label or package any products other than marijuana and marijuana related products.

• All applicants must adhere to all operational requirements set by the state.

• A commercial cannabis retailer must allow DCR agents access to the facility to complete inspections.

Compliance Violations

When violations occur, the Department of Cannabis Regulation issues a Notice of Violation within five years of the alleged infraction. However, this does not prevent other enforcement agencies from pursuing their own legal recourse. In addition, the DCR has laid out specific classes of violations to assess fines and punitive measures. For each violation, the notice also specifies the timeframe in which it must be corrected.

Penalty Fines

Occasionally, a commercial cannabis retailer is charged with a violation and assessed administrative fines. The amount of each fine depends on the violation classification. We’ve provided a breakdown of the fines below:

• Minor Violations will incur a fine equal to 50% of the current cannabis license fee for each violation.

• Moderate Violations will incur a fine equal to 150%  of the current cannabis license fee for each violation.

• Serious Violations will incur a fine equal to 300% of the current cannabis license fee for each violation.

Ultimately, Los Angeles dispensary owners, managers, and budtenders should all stay aware of the commercial cannabis regulations. For local operators, our dispensary POS software in California helps keep that compliance built into daily operations. In short, avoiding violations keeps your business profitable and below the radar.