Contributing Author: Shannon Heatley
The first Cannabis Commission hearing of 2021 was packed with information for LA operators and applicants. Here are the key takeaways from the Executive Director’s Report impacting all applicants:
- Across the board, cannabis businesses are being impacted by the Office of Finance’s COVID-19 safety procedures. In an effort to reduce some of the impact, DCR has instituted a new process for issuing invoices.
- City Council is voting on a draft ordinance that would temporarily extend 10-day payment deadlines to 30 days, allow the submission of late renewal applications and/or payments, and establish one-time extensions for the late submission of 2020 and/or 2021 renewal applications. The 30 day extended deadlines would sunset once the pandemic subsides. This news directly affects 57 businesses that failed to timely renew and pay fees.
- As of February 4, DCR had “more than” 850 applications currently under review. Of these, 375 are pre-applications, 275 are modification requests, and 50 are PCN requests.
- DCR reports the following processing times from invoice issuance:
- PCN Processing – approximately 130 days
- Pre-Application Review – up to 120 days
- Temporary Approval – minimum 120-180 days. Most applicants will take longer than this to move through the process
- Modification Requests vary by type
- DCR reiterated an applicant does not vest at its proposed location until it receives both state and city licenses. This means it is possible for DCR to deny a license if a sensitive use pops up in the time the application is being processed.
Phase 2 Update
- Any Phase 2 business that fails to receive Temporary Approval by September 30, 2021 will have their application abandoned as of October 1, 2021.
- Additionally, to avoid losing local authorization, Phase 2 businesses without Temporary Approval must now also submit proof of an active state application by February 28, an active state license by May 31, and must have Temporary Approval by June 30.
- Any Phase 2 applicant that fails to meet the above deadlines will have to apply for a “Notice of Local Compliance Underway” which is similar to local authorization in that it’s the document that would be used to obtain state licensing. Notices of Local Compliance Underway are only valid for 90 days.
Phase 3 Retail Round 1
- As of February 4, these were the stats as they relate to Phase 3 Retail Round 1:
- 45 businesses have uploaded one or more Temporary Approval documents.
- 30 of those have uploaded the minimum number of Temporary Approval documents and are eligible for a status of “Local Compliance Underway.” Applicants eligible for this status should have already received a Notice of Local Compliance Underway which gives them the green light to begin their state retail license applications.
- Note: this document does not allow applicants to begin retail operations and does not guarantee a Temporary Approval will be issued.
- 17 of the 30 with Notice of Local Compliance Underway have scheduled an Initial DCR Inspection. 7 of those have passed the Initial Inspection. It is unclear whether any have passed LAFD inspections yet.
- The processing of these applications is “non linear,” meaning that certain documents can still be missing from the application for the applicant to receive a Notice of Local Compliance Underway and/or schedule an inspection.
Phase 3 Delivery & Non-Retail Application Processing
- Approximately 375 pre-application requests have been submitted. 98 of these have been processed to a status of “Eligible for Processing.”
Phase 3 Retail Round 2
- The DCR currently anticipates the Verification Window for applicants to have their Social Equity Status confirmed no sooner than Q2/2021. This new window for verification will only be available to those eligible under the expanded Social Equity Program eligibility criteria.
- DCR will make the following resources available to those interested in becoming verified:
- Information and Procedure Bulletin
- Video Tutorial
- A self-assessment tool
- Updated licensing map with a layer for Disproportionately Impacted Areas based on Police Reporting Districts
- The subsequent Round 2 license lottery will be no sooner than Q3/2021.
- Approximately 50 applicants have submitted an intent to file a PCN and a completed PCN form. These 50 applicants are now authorized to schedule their payment appointments. No new PCN requests are currently being accepted. Remember — DCR does not begin reviewing applications until the associated fees are due. With PCN requests especially, the early bird gets the worm.
Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.