If you are interested in applying for a commercial cannabis license in the City of Los Angeles, participating in Phase III of the City’s commercial cannabis licensing program is now your only option. As Phase II came to an end on September 14th, general applicants are anxiously waiting for the City to announce when Phase III will start. The City has yet to comment on when Phase III will begin but given the large number of applications that were received during Phase I and Phase II, prospective applicants will likely be waiting months rather than weeks for the third phase to begin.
Social Equity Program
While Phase III will be open to general applicants and participation in the City’s Social Equity Program is not mandatory, there are some things to know about how Phase III will be implemented before applying. First and foremost are how applications will be processed and how priority for Social Equity Applicants will be assessed.
For retail applicants, one general application will be processed for every two social equity applications. In phase three, only Tier 1 and Tier 2 Social Equity Applicants will receive priority processing. While, on their face, these processing requirements do not seem too intense, all Phase III retail applicants should know that the 2:1 processing requirement encompasses all of the non-equity retail licenses that have been issued thus far.
This means that if 150 non-equity retail licenses were issued during Phase I of the City’s cannabis licensing program, 300 Social Equity retail applications will need to be processed during Phase III before a single non-equity retail application is reviewed. Therefore, if you are planning to apply for a retail license during Phase III, participation in the City’s Social Equity program will significantly increase your likelihood of obtaining a license. That being said, both Tier I and Tier II of the City’s Social Equity Program require the Social Equity Applicant to own 51% or 33.3% of the applicant entity respectively. Thus, it is imperative to work with a Social Equity Applicant that has been appropriately vetted and structure your entity (or entities) properly if you plan to apply as a Tier 1 or Tier 2 Social Equity Applicant during Phase III.
When it comes to Phase III non-retail applicants, one general application will be processed for every Social Equity application that is processed. All Phase II non-retail applicants were required to participate in the Social Equity program and therefore, the 1:1 processing ration for non-retail applicants is not nearly as high of a hurdle as the 2:1 processing ratio for Phase III retail applicants.
Given that the City has not discussed when Phase III will begin, now is a good time for potential applicants to get their commercial cannabis entity formed, find individuals that qualify as Tier 1 or Tier 2 Social Equity Applicants, and locate premises that meet all City zoning and operational requirements. If you would like assistance with any of the items noted above, please contact Rogoway Law Group to schedule a consultation today.
