One Step Forward How cannabis businesses are coping with legal limbo and licensing 

When the Medical Cannabis Regulation and Safety Act and Proposition 64 passed, they created medical and recreational licensing for California, but they also created a legal limbo. With licensing unavailable until January 1, 2018, business owners have been in a hurry-up-and-wait holding pattern. Looking for their next move, the spotlight turns to city permitting. Yet again, in cities across our great state, permitting may or may not be available before state licensing on January 1, 2018. Los Angeles seems to be at the center of a heated permit debate—with Prop. M passing earlier in March, L.A. cannabis businesses are eager to get to work, but it’s not panning out to be so simple.

“Prep and strategy for licensing should already be your business’ top priority despite that the city and state are still trying to get their act together.”

Los Angeles’ Prop D Wasn’t Going to Cut It

When Californians approved recreational use and commercial licensing for cannabis, it didn’t change the fact that cannabis businesses in L.A. would remain illegal under city law due to the outdated ordinance known as Prop D.

Then, on March 7, the problems facing L.A. businesses started to appear manageable, because L.A. voters overwhelmingly approved Proposition M to legalize and regulate cannabis in L.A. for the first time ever. Under Prop. M, the City Council gained the authority to revise Prop. D and create permits.

What’s the Status of L.A. Now?

What we’ve gotten so far is not necessarily what we bargained for. On June 8, the Los Angeles City Council released its proposed cannabis regulations. Unfortunately, the council’s proposal provided for “Certificates of Compliance” rather than affirmative permitting. This then caused an uproar from L.A. based cannabis business who expected permits within their city in the near future. Notably, this is the most controversial issue of L.A.’s draft regulations.

Additionally, Los Angeles’ proposed regulation would prohibit volatile manufacturing and outdoor cultivation (commercial and personal). Further, Los Angeles will allow businesses to apply for four (4) different registration groups, Pre-ICO Priority, Non-Retail Registry (cultivation and manufacturing), Social Equity and General Public. All L.A. cannabis businesses that are not Pre-ICO or incorporated/in-operation prior to January 1, 2016, will likely fall into the General Public registration.

Although the initial draft still needs a lot of work, it’s a big move in the right direction and we only have until August 7, to file public comments.

Los Angeles Needs Feedback

Keep in mind that none of this is actual law as of yet. The proposed regulations are still subject to revision. After the regulations release on June 8, a 60-day public comment period was triggered in which the industry representatives gets their chance to voice their comments, concerns and feedback on the proposed regulations. Then it’s back to the drawing board for the City Council. It is rumored that Pre-ICO and Non-Retail Registries will begin accepting applications September 30, 2017. Anxious business owners await to see if L.A. will stick with their deadline.

What Are Businesses Doing in the Meantime?

Prep and strategy for licensing should already be your business’ top priority despite that the city and state are still trying to get their act together. Unlike your tax deadline, application dates, whether California or Los Angeles will not come and go without consequence. There is so much work to be done and so little time. What are you waiting for?

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