Posts tagged los angeles cannabis regulations
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.


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