In a 14-0 vote Tuesday evening, the Los Angeles City Council finally adopted its regulations for cannabis businesses. Many of the changes reflect the nuances of the State of California’s recent rollout of their rules. The largest 420-friendly city in the world is one of the few places in SoCal trying to regulate the industry rather than ban it.
Why Does It Matter?
This vote capped off months of deliberations by the City Council. Their task: to transition LA’s cannabis industry from the CUA’s blind eye to tightly-regulated Adult Use, with minimal disruptions. Of course, building and enforcing these brand new regulations on an existing, quasi-legitimate industry is a monumental task. So why bother? In short, the expected tax windfall gave the Council millions of reasons to rush out the rules.
Does it Affect Me?
Even though the City is getting their cut of the action, the transition will be anything but painless for the City’s 1700+ dispensaries and innumerable growers, distributors, and manufacturers. While the 130-or-so Pre-ICO (“Prop M Priority”) dispensaries will be able to stay in business, all other dispensaries hoping to sell under the recreational regime will have to shut down—at least temporarily. Non-retail businesses can continue working if they have been operating continuously for the past two years and meet certain criteria.
Will Cannabis Businesses Open Soon?
While LA’s cannabis regulations technically don’t go into effect until January 1, 2018, the licensing application provisions are immediately relevant. Cannabis businesses looking to get licensed now have the framework they need to develop compliant premises and procedures. Pre-ICOs will be able to remain open during the application process and will be open to adults 21+ on January 1, 2018. Those businesses who don’t qualify for limited temporary approval may see their first Adult Use customer by Q1 2018, but it’s unlikely.
Honestly? Not much. The approved ordinance is mostly the same as the revised draft regulations published in September. Differences are subtle and mostly reflect the final iteration of California’s rules. Specifically, the City included licenses for non-storefront delivery services (Type 9), indoor cottage cultivation (Type 1-C), infusion (Type N), and packaging (Type P). Most of the remaining changes reflect minor changes to the language for clarification and consistency with both City and State regulations.
What happens next?
For Pre-ICOs, applications will be accepted in early December, with all other businesses eligible to apply 60 days after the Priority applicants. Existing businesses looking to minimize downtime between January 1 and temporary licensure will have to work quickly to bring their premises into compliance before applying.