Summary of Major Changes of the Recently Amended Article 4 of Chapter X City of Los Angeles Ordinance
The most significant updates to Article 4 include a revised definition of “Undue Concentration” to increase the number of the number of cannabis businesses and define ownership concentration. In addition, a tiered system of “Social Equity Applicants” was permitted to allow for economically disadvantaged persons to apply for cannabis licenses.
The definition of undue concentration was updated to allow for additional business licenses according to population density and applicable zoning laws. This includes:
One Store Front Retail (Type 10 license) for every 10,000 residents.
One Microbusiness (Type 12 license) for every 7,500 residents. A Microbusiness is an entity that engages in cultivation on less than 10,000 square feet.
One square foot (1 sq. ft.) of cultivation space for every 350 square feet of zoned land.
One license to manufacturer (Type7) for every 7,500 residents.
Existing dispensaries (EMMD) and processors (as defined under Section 104.08) are not subject to this new rule.
Additional rules, including calendar days, for how applications are submitted, accepted, processed, approved and denied was also clarified. Some limits pertaining to zoning (i.e. M1-M3, MR1, MR2), as well as limits on the number of licenses (i.e. 1 cultivation license per every 2,500 square feet of cultivation space) were also delineated.
The Undue Concentration provisions may be waived if the City Council believes doing so would serve “public convenience or necessity.”
Ownership & Percentages was also updated to clarify and limit the number of individuals that may own cannabis businesses
A person may own or have a maximum 20% profit share in up to three Storefront retail (Type 10) or Delivery (Type 9) businesses.
Three types of Social Equity Applications (Tier 1, Tier 2 and Tier 3, each which must be approved by DCR), were introduced:
Tier 1 applicants are reserved for those with low income AND a prior California Cannabis Arrest or Conviction; OR Low income and a minimum of 5 years California residency.
Restrictions, including a minimum ownership requirement (51%), as well as benefits including expedited renewal processing, fee deferrals are also detailed.
A “Tier 2 Social Equity Applicant” was also defined to include anyone with a Low Income & 5 years' residency or 10 years residency and no less than a 33.3% ownership.
A “Tier 3 Social Equity Applicant” was also defined to essentially include those entities that support Tier 1 & Tier 2 applicants and regulates the price per square foot of property, in certain instances.
Finally, this ordinance also requires a completed financial statement for the “most recently completed fiscal year” for any cannabis businesses applying for a renewal license.