With state applications for licensure quickly approaching, cities and counties all over California are working hard to create regulations on a local level for the cannabis industry. In Southern California, the spotlight is on Los Angeles and its plight in drafting one of the most comprehensive cannabis regulatory frameworks that has ever existed.
August 7 marked the closing of the 60-day comment period that was triggered by the release of Los Angeles’ proposed cannabis regulations and boy did everyone have something to say. Various cannabis business owners, advocates and members of the Los Angeles City Council submitted public comment letters voicing their opinions, suggestions and proposals—mostly with common themes. So, what is the Los Angeles cannabis industry saying about the proposed new regulations? Three of the most prevalent points of contention were the lack of affirmative permitting, provisional licensing and volatile manufacturing.
“Given the size, population, economic power and visibility of the city, Los Angeles is uniquely positioned to shape the future of California’s cannabis industry.”
Los Angeles Should Issue Permits for Commercial Cannabis Activity, Not Limited Immunity
The most talked about and controversial issue that most comment letters made a point to discuss was the city’s proposed quasi-legal, limited immunity scheme. According to the city’s draft regulations, “certificates of compliance” (COC) will be issued to businesses in lieu of actual permits, with COC’s only conferring limited immunity upon compliant businesses instead of affirmative licensing. Critics argue that the issuance of COC’s will only result in a repeat of the same mistakes under Proposition D. Critics further argue that the lack of local permitting will only deter investors from the city and continue to make it difficult for business owners to find and lease property. Since the city released its draft regulations back in June, the proposed limited immunity scheme has come under heavy fire from industry stakeholders, the community, and multiple city council members including President Herb Wesson, Jr.
Provisional Licenses Should be Given to All Compliant Businesses
As the draft regulations now stand, only the following businesses will be allowed to continue operating while their applications are pending: Proposition D retailers and certain cultivators and manufacturers who were in operation prior to January 1, 2016. To ensure market stability, many proponents argue that all existing compliant businesses seeking to apply for local licensure should be provisionally licensed and allowed to continue operating while their applications are pending.
Volatile Manufacturing (Type 7) Should Be Allowed
Volatile manufacturing (Type 7) will be disallowed under the city’s draft regulations. But with Senate Bill 94’s inclusion of the volatile manufacturing license, many cities find regulating volatile manufacturing a navigable process and also find that using solvents in manufacturing cannabis can be done safely. In support of allowing volatile manufacturing within L.A., President Wesson stated he was confident that “[the city] ha[d] the inspection, safety, and regulatory expertise to allow for safe volatile manufacturing.”
In addition to the above proposals, there were a number of other requests that were submitted to Los Angeles City Council for its consideration. This included immunity granted from criminal prosecution, allowances for small outdoor and mixed-light cultivation and many more.
Given the size, population, economic power and visibility of the city, Los Angeles is uniquely positioned to shape the future of California’s cannabis industry. Other regions in California and across the nation will be looking to Los Angeles City Council to galvanize the market and determine industry precedent. Like the city, business owners, advocates and the industry as a whole support clear regulations that create a favorable environment for cannabis businesses while also protecting public health and safety. The Los Angeles City Council is now combing through all the public comments and feedback and will be amending Proposition M regulations as they deem appropriate. We are eager to see what changes will be made!