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L.A. Prepares Phase 3 Social Equity Licensing

August 26, 2019

Recently, the L.A. Department of Cannabis Regulation announced that they will be opening the application window for Phase 3 licensing for social equity cannabis businesses. The application portal will open on September 3rd at 10 a.m. Applicants will be vying for 100 dispensary licenses, 75 will be for Type 1 social equity applicants and 25 for Type 2 social equity applicants.

Social Equity Pre-Vetting

The Department of Cannabis Regulation launched Social Equity “Pre-Vetting,” or the Social Equity Program eligibility verification application process in late May.  This process was implemented and designed to provide technical assistance to prospective applicants and help them navigate the Social Equity eligibility verification process. 

DCR hosted four citywide workshops with more than 3,000 cannabis entrepreneurs, hosted multiple stakeholders meetings; and schedules approximately 250 one-on-one training sessions to educate applicants on the eligibility verification process. 

Areas of Undue Concentration

Social equity applicants had to submit their application and supporting documentation before July 29th otherwise they are automatically disqualified from licensing consideration. Some businesses were also attempting to in communities that were already flooded with dispensaries making them ineligible because of undue concentration. The L.A. Department of Cannabis Regulation announced that the following areas are off limits for Type 10 retail license applicants:

  • Central City
  • Central City North
  • Harbor Gateway
  • Sherman Oaks – Studio City- Toluca Lake – Cahuenga Pass
  • Sun Valley- La Tuna Canyon
  • Venice

Public Convenience or Necessity

There are some exceptions in these communities however they are few and far between and require a finding of Public Convenience or Necessity (PCN) from the City Council.  DCR will only accept and process applications that have the City Council seal of approval. If you want to take your chances, you can still apply on September 3rd, but you’ll likely be re-routed automatically to the PCN process. 

Dispensary applicants will then be required to pay a $1,499 PCN fee within 10 calendar days of submitting their PCN request. The PCN will be transmitted to the Office of the City Clerk for City Council consideration. It’s imperative for these applicants to remember that, “PCN requests are not pending applications, do not receive a timestamp, and do not prevent another applicant from submitting a competing PCN request in the same area.”

Dispensary Location Documentation

In addition to satisfying the social equity qualification, one of the most essential Phase 3 criteria is proof of right to commercial property for your intended license type. The L.A. Department of Cannabis Regulation has announced that it wants to see evidence of this in the form of a lease or deed in the name of the applicant, with proof of deposit in the event of a lease. The potential dispensary property must also abide by all sensitive use buffers and zoning requirements.

If you’ve already done your due diligence for the social equity verification and your business property meets the sensitive use buffer, zoning, and undue concentration requirements, applicants can focusing on making progress on the licensing checklist recently released by DCR.