Los Angeles Starts Licensing Process for Cannabis Growers

The City of Los Angeles has begun accepting license applications for cannabis growers, manufacturers, and test labs, after months of delay. The city’s Department of Cannabis Regulation began accepting license applications through its web portal on Wednesday.

LA Slow To License Cannabis Industry

Los Angeles has been the subject of criticism for the slow pace of licensing commercial cannabis businesses in the city. So far, the city has only granted approval to about 150 retail shops. No cultivators, processors, or testing facilities have yet received permission to operate in Los Angeles. Other major cities including Oakland and San Diego began the licensing process months earlier.

Commercial cannabis activity became legal in California under Prop 64 on January 1, 2018. But before businesses can begin operating legally, they must first obtain approval from the state and the local jurisdiction in which they are located.

The delay has been a burden for many of those who wish to operate a cannabis business in Los Angeles. Many have been paying thousands of dollars in rent each month for commercial space that they are not yet able to use to generate income.

Donnie Anderson, a cannabis retailer and cultivator, told the Associated Press that it has been difficult to wait out the process.

“We’ve been hanging on by the skin of our teeth,” said Anderson.

The lack of licensed growers and manufacturers in Los Angeles has meant that the retail shops that have been licensed must look elsewhere for the product to fill their shelves. Aaron Lachant, an attorney specializing in cannabis law, said that “the retailers have had to figure out new supply relationships with licensees across the state.”

Phase 2 Of Licensing Process

The applications being accepted in the current Phase 2 licensing period are limited to businesses that were operating prior to January 1, 2016.  The applicant must have been a supplier to an existing medical marijuana dispensary prior to 2017 and must qualify under the city’s social equity program. Applications will be accepted for a period of 30 days.

Phase 1 license application processing, for retail businesses that had been operating in compliance with the city’s medical marijuana ordinance Proposition M, closed in early March. The department will begin accepting licenses to operate cannabis businesses from the general public in Phase 3 of the licensing process. The date for the beginning of Phase 3 has not yet been determined by the Department of Cannabis Regulation.

The Los Angeles Department of Cannabis Regulation has not determined when the first licenses for cannabis growers, manufacturers, and test labs will be issued. Cat Packer, the executive director and general manager of the agency, said last month that the city was still in the process of creating regulations and did not want to commit to a deadline.

Ballot Measure For New Cannabis Taxes Pulled

In more good news for the Los Angeles cannabis industry, on Tuesday the city council decided against a ballot measure that would have added new taxes to the city’s marijuana businesses. The council had planned to put the Cannabis Reinvestment Act on the ballot for November’s election.

Had it passed, the ordinance would have levied on one percent tax on cannabis businesses’ gross receipts, and a $5 dollar tax on each lab test and cannabis event ticket. Instead, the council instructed city staff to return within 45 days with new proposals to fund the Department of Cannabis Regulation.

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