Proposed Ordinance Changes from the City of Los Angeles Department of Cannabis Regulation

A. Amendments to LAMC in Support of the Social Equity Program

October 13, 2022

February 3, 2023

Create a new definition for “Indirect Owner” to allow all Applicants, including SEIAs, greater flexibility in their business arrangements. This definition would capture individuals who only have an ownership interest in an Applicant or Licensee by virtue of ownership of another entity that has at least a 20% aggregate ownership stake or equity interest in an Owner of the Applicant or Licensee. The amendment would permit verified SEIAs to be either Owners or Indirect Owners provided the aggregate ownership percentage(s) of all SEIAs disclosed complies with LAMC section 104.20.

Would streamline the DCR’s document review by delineating between indirect and direct owners when a business has a multilayer or complex ownership structure.

“Indirect Owner” means a Person with an ownership interest in an entity that has a direct or indirect ownership interest of at least a 20% aggregate ownership stake or equity interest in an Owner of the Applicant or Licensee, unless the interest is solely a security, lien, profit sharing, or encumbrance. Aggregate means the total ownership interest held individually or through an entity. The amount of indirect ownership in the Applicant or Licensee that is held

by any other entity is determined by multiplying the percentage of ownership interest at each level. For example, an individual owning 50% of an entity that owns 50% of a cannabis business would have a 25% aggregate ownership interest in the cannabis business.

Current Definition of Owner in LAMC 104.01 would be AMENDED to read:

“Owner” means a Person with at least a 20% aggregate ownership stake or equity interest in the Applicant or Licensee, unless the interest is solely a security, lien, profit sharing, encumbrance or held through another Person. Aggregate means the total ownership interest held individually or through an entity. For example, an individual owning 50% of an entity that

owns 50% of a cannabis business would have a 25% aggregate ownership interest in the

cannabis business.

ADD section 140.03(e)(5)

Currently, entity substitutions are limited to Pre-Applications originally filed as sole proprietorships, Licensees, or Social Equity Applicants eligible to participate in the refiling process.

DCR suggests language to clarify the following:

(1)   allow for the transfer of a License from one entity to a new entity;

(2)   not require a new land-use review when the Business Premises associated with the License is not amended in the same modification request;

(3)   require the new entity to have a complete Legal Business Entity record before a modification request is considered; and

(4)   reduce the processing time to complete the entity substitution process

Entity Substitutions. An Applicant or Licensee may, under specific circumstances, submit a request to substitute the entity associated with the Application or License. Social Equity Applications may be refiled pursuant to Section 104.03(i). Pre-Application Review records filed as sole proprietorships may be converted to a different legal entity type once during the Application process and may not be further amended until a License is issued. Licenses may be transferred to a new entity provided a new Application is filed, all application information, documents or forms are submitted under the new entity, and all required application fees are paid. Any previously issued License shall be canceled before a License is issued to the new entity. The new entity shall not operate until a new License has been issued by DCR. An entity substitution request shall include notarized signatures from the Authorized Agent and, if applicable, the Social Equity Individual Applicant(s). If an Authorized Agent has not been  designated, notarized signatures are required from a majority of the Owners that own the Applicant or Licensee entity directly without any intervening entities or persons. If an Owner is

an entity, the CEO or President, or equivalent executive position, may sign on behalf of the

entity. If the Application or License is subject to the requirements of Section 104.20, the request

shall also include a notarized signature from the Social Equity Individual Applicant(s) associated

with the Application or License

Successors. The Equity Share shall not be subject to arrangements causing or potentially causing ownership benefits in the Social Equity Applicant or Licensee to go to

another in any circumstance other than after death or incapacity. In the case of death or incapacity, a Social Equity Individual Applicant shall identify a natural person(s) as his or her own successor in interest or assignee of their Equity Share. If a Social Equity Individual Applicant dies, the Social Equity Applicant or Licensee will continue to qualify under this section with the requisite Equity Shares so long as the surviving spouse or successor in interest of the deceased Social Equity Individual Applicant inherits or otherwise acquires all of such Individual’s ownership interest in the Social Equity Applicant or Licensee. The natural person(s) may

subsequently identify an entity, such as a trust, to hold their interest. Upon the death of the Social Equity Individual Applicant or Licensee, the Social Equity Applicant shall notify DCR within 30 days of their death. Unless more time is allotted by DCR, the Social Equity Applicant shall supply a certified copy of the death certificate and amend all contact information on file with DCR within 60 days.

This amendment would state that an application which is not associated with an active, compliant Business Premises address may be subject to abandonment (This may occur due to loss of site control, or terminated their lease at). If the applicant is not eligible to relocate, abandonment would provide a pathway to refiling and an opportunity to restart the licensing process at a new location.

This amendment would also require Applicants to pass an Initial Inspection within six months of the date their Application is deemed filed or the Temporary Approval Application record may be subject to abandonment.

Current language prohibits Social Equity Applicants from modifying applications to remove or replace a Social Equity Owner until a License is issued; Amendment will prevent the removal or replacement of ANY Owner until a License is issued.

Retail storefront and cultivation commercial cannabis license types, exclusive to SEIAs until January 1, 2025, are subject to a finding of Undue Concentration.

However, with the amendment, If an application is abandoned (described above), the Applicant could refile a new Pre-App. Review record proposing a Business Premises in a different Community Plan Area (CPA), as long as that CPA has not reached Undue Concentration

Beginning January 1, 2025, licensees should be authorized to relocate by submitting a relocation modification request for a Business Premises in any CPA that has not reached Undue Concentration.

Relocations After the Issuance of a License. Temporary Approval. If a Licensee has been issued Temporary Approval or a License for the location from which it seeks to relocate,

the Licensee shall request cancellation of its Temporary Approval or License at that location before Temporary Approval or a License at the new Business Premises location may be issued. The Applicant or Licensee Person(s) shall meet the Temporary Approval and/or License

requirements at the new location. Any Temporary Approval and/or License issued at the prior Business Premises location shall expire no later than 180 calendar days from the date the

Business Premises Relocation fee is paid new Business Premises is deemed eligible for further

processing

Specifically, any Temporary Approval and/or License issued to the original Business Premises location would expire 180 calendar days from the date the new Business Premises is deemed eligible for further processing. DCR may grant an extension of time provided the extension would not prevent another Applicant or Licensee from moving forward with an Application or modification request.

Relocations After the Issuance of a LicenseTemporary Approval. If a Licensee has been issued Temporary Approval or a License for the location from which it seeks to relocate, the Licensee shall request cancellation of its Temporary Approval or License at that location before Temporary Approval or a License at the new Business Premises location may be issued.

The Applicant or Licensee Person(s) shall meet the Temporary Approval and/or License requirements at the new location. Any Temporary Approval and/or License issued at the prior Business Premises location shall expire no later than 180 calendar days from the date the Business Premises Relocation fee is paid.new Business Premises is deemed eligible for further processing.

This amendment would allow Phase 3 Retail Round 1 Applicants to benefit from the updated ordinance amendments which were enacted after the Phase 3 Retail Round 1 application window closed.

DCR shall, subject to review of any applications previously deemed ineligible as described below, process Applications up to and including DCR Record No. LA-C-19-310245-R-APP from the list published by DCR titled “Phase 3 Retail Round 1 Submissions (09/03/19, 10 am to 09/17/2019 10 am)”, dated September 26, 2019. Notwithstanding any prior notice and/or action by DCR, Applicants that were deemed ineligible

for further processing due to a Community Plan Area having reached Undue Concentration on or after September 3, 2019, the failure to submit proof of deposit, or due to proximity to a

sensitive use, subject to relocation, may be deemed eligible for further processing if all other requirements are met. Applications deemed eligible for further processing under Section 104.06.1(b)(6) as of January 1, 2020, and Applications deemed eligible for further processing under Section 104.06.1(b)(7) after January 1, 2021, shall not be included in the calculation of

Undue Concentration, as defined in Section 104.01(a)(49).

This will protect the interests of applicants who have made significant progress in the licensing process at the time Undue Concentration is reached, therefore encouraging businesses to seek licensure and deterring possible litigation.

Persons not subject to a finding of Undue Concentration should be limited to: (1) an EMMD; (2) an Applicant eligible for processing under Section 104.08; (3) a SEIAs previously selected through an Application lottery pursuant to Section 104.06.1(c)(5) and deemed eligible for further processing pursuant to Section 104.03(a); and, (4) a refiled Application pursuant to Section 104.03(i) and 104.03(j).

●  LAMC section 104.13

●  Definition: subsection B of the “Household Size”

●  LAMC section 104.04 – Definition: Licensee

●  LAMC section 104.03 – New record types

●  LAMC section 104.11(m)

●  DCR’s Rules and Regulations refer to the most egregious violations as “Major” but LAMC section 104.13 refers to this category as a “Serious” violation.

●  subsection B of the “Household Size” definition should be clarified to state “All household members who are under 18 years of age must be the legal dependent or emancipated minor of an adult household member, as claimed on the most recent income tax return”.

●  Definition of “Licensee” require a corresponding amendment to LAMC section 104.04 to specify that a final inspection and community meeting must occur before the issuance of an annual license.

●  LAMC section 104.03 should also be amended to reflect new record types, as well as the modification processes for each record type.

○  Social Equity, Owner, and Primary Personnel documents, forms, and information are now stored in Legal Entity records rather than Temporary Approval records.

●  LAMC section 104.11(m) amended to change the semiannual reporting concerning workforce requirements from January and July to “on or before the last day of February” to coincide with the existing renewal process and requirements, thereby simplifying the reporting process for licensees.

LAMC sections 104.03 and 104.06

LAMC sections 104.07(c) and 104.08(b)

DCR recommends setting the final date for DCR to accept new Temporary Approval applications from general Applicants and Social Equity Applicants the latter of December 31, 2022 or six months after the date the State stops accepting provisional license applications from each Applicant group. DCR also recommends setting corresponding expiration dates for the final date that Temporary Approvals may be renewed based on the State’s deadline.

Additional amendments to LAMC sections 104.03 and 104.06 – necessary to ensure the application processes require Applicants with a status of “Local Compliance Underway” to meet the current year requirements, INCLUDING updated forms/docs, to receive Temp. Approval or an Annual License.

Finally, DCR recommends an amendment to LAMC sections 104.07(c) and 104.08(b) to clarify that P1/EMMD Applicants and P2 Applicants have always been required and shall continue to be required to go through the Temp. Approval Application process – must submit required information, forms, and documents until the proposed Temp. Approval sunset date.

4. DCR shall cease accepting new Temporary Approval Applications from general Applicants by May 31, 2023. DCR may accept Temporary Approval renewal Applications from

general Applicants that are timely filed during the renewal period through February 28, 2027.

5. DCR shall cease accepting new Temporary Approval Applications from Social Equity Applicants by July 31, 2023. DCR may accept Temporary Approval renewal Applications from Social Equity Applicants that are timely filed during the renewal period through February 28, 2027.

6. Temporary Approval Licenses issued for calendar year 2027 may not be renewed and shall expire on December 31, 2027 after 11:59pm.

7. Temporary Approval Applications abandoned for any reason after July 1, 2023, shall be refiled as an Annual Application.

Currently, LAMC sections 104.03(i) and 104.03(j) allow only an applicant with an abandoned Temporary Approval Application to refile a new application.

DCR anticipates the annual licensing process will begin in late 2022 or early 2023. This amendment would expand the refiling process to allow Applicants participating in the annual licensing process who are not issued an annual license due to unpaid fees or incomplete forms, among other reasons, to refile their annual Application after the initial Applicant is abandoned.

An amendment is needed to elucidate that, after January 1, 2023, a Temporary Approval Application must have been deemed filed, i.e. all documents and fees were submitted, for the application to be eligible for the refiling process.

Amendment to require that applications abandoned 3 months after the end of State’s provisional licensing process must be refiled as Annual Applications rather than as Temporary Approval Applications.

Expand the refiling process to include expired licenses is consistent with the intent of LAMC Section 104.12(a) which states, in the event the License is not renewed prior to the expiration date, the Licensee shall cease all Commercial Cannabis Activity until such time that the Licensee is issued a new License from DCR and a license from the State of California.

An Applicant subject to the provisions of Section 104.20 with a Temporary Approval Application deemed abandoned under Section 104.03(h) after January 1, 2022, may refile an Application subject to the requirements of this subsection. Applications abandoned, for any reason, after November 1, 2022, may not be refiled unless the Application was deemed filed

pursuant to Section 104.03(b).

The Social Equity Individual Applicant associated with a Social

Equity Applicant that has an Application deemed abandoned under Section 104.03(h) after January 1, 2022, may refile an Application subject to the requirements of this subsection. If

more than one Social Equity Individual Applicant is listed on the initial Temporary Approval Application, the refiled Application shall be submitted by the original Social Equity Applicant

entity. The refiling process shall be initiated through the DCR Licensing Portal within one (1) three (3) calendar years of the date DCR notifies the Social Equity Applicant by electronic mail

that the original Temporary Approval Application is deemed abandoned.

LAMC 104.03(j) would be AMENDED to read:

An Applicant not subject to the provisions of Section 104.20 with a Temporary Approval Application deemed abandoned under Section 104.03(h) after January 1, 2022, may refile an

Application subject to the requirements of this subsection. An Applicant not subject to the provisions of Section 104.20 with a Temporary Approval Application deemed abandoned under

Section 104.03(h) after January 1, 2022, may refile an Application subject to the requirements of

this subsection. Applications abandoned, for any reason, after November 1, 2022, may not be refiled unless the Application was deemed filed pursuant to Section 104.03(b). The refiling process shall be initiated through the DCR Licensing Portal within one (1) three (3) calendar years of the date DCR notifies the Applicant by electronic mail that the original Temporary Approval Application is deemed abandoned.

amendment to LAMC section 104.06(b)(1)

LAMC sections 104.03 and 104.06

This section would establish the process for annual licensing, including environmental review and other similar requirements, and establish that an annual license may be suspended or revoked for the same reasons as a Temporary Approval and using the same procedures.

Clarify the annual licensing approval process for non-retailer activity in a Business Premises less than 30,000 sq. ft. and/or delivery. Currently this section does not contain a requirement for DCR to issue written findings based on evidence in the record when denying these application types. DCR suggests mirroring language in LAMC section 104.06(a) for the retail annual licensing process.

Clarify that all records must be updated or renewed annually.

(c) Application – Determination of Completeness. DCR shall determine if an annual Application is complete as provided in the Rules and Regulations. A determination of

completeness includes an Initial Inspection and environmental clearance as required by Section 104.06(e). The applicant shall pay the applicable environmental assessment fee pursuant to

Section 104.19(c). ($6,024) DCR may request additional information and documents from the Applicant

at any time during application processing, subject to payment of any fees under Section 104.19(h). If the Applicant fails to provide the additional information, documents or payment in

the time allotted by DCR, the Application shall be deemed abandoned. An Annual License Application Fee for each Commercial Cannabis Activity pursuant to Section 104.19 shall be paid within 30 days of DCR’s determination that the submission of an annual Application is complete.

If the fees are not paid within the allotted time, the Application shall be deemed abandoned.

DCR will conduct a Final Inspection and, when applicable, schedule a community meeting pursuant to Section 104.04 before an annual License shall be considered operational.

A new subsection LAMC 104.06(f) would be ADDED to read:

(f) Annual Licenses.

1. DCR shall consider an annual License Application filed following: (i) a determination of eligibility pursuant to Section 104.03(a); (ii) the submission of all required and

completed annual License information, forms, and documents to DCR’s Licensing Portal; and (iii) and the payment of the applicable application fee(s) for each Commercial Cannabis

Activity pursuant to Section 104.19. An Applicant shall submit all required information, forms, and documents pursuant to the Rules and Regulations. The applicable Annual License

Application Fee(s) are due within 30 days from the date of the invoice. If the fees are not paid within the allotted time, the Application shall be deemed abandoned pursuant to Section

104.03(h). An Applicant must obtain all necessary permits, licenses, or other authorizations required by law from the City, State or other public agencies before an annual License is

considered operational. The annual License Application process does not waive or otherwise circumvent other City or State requirements or necessary permits from the City, State, or other public agencies, including, but not limited, to, a Certificate of Occupancy, permit or authorization of the Los Angeles Fire Department, health permit from the County of Los Angeles, or authorization from the State. If at any time during the processing of an annual License Application or after the issuance of an annual License it is discovered that an annual License Application has been improperly prepared or required information, forms or documents have not been submitted in accordance with this Code or the Rules and

Regulations, upon notification to the Applicant, processing of that annual License Application shall be suspended until the annual License Application has been corrected or the required

information, forms or documents are provided. Material misrepresentations, false statements, or the failure to disclose a material fact in an annual License Application may result in the denial of the annual License Application. All Licensees shall obtain a permit from the Los

Angeles County Department of Public Health. If the Licensee is engaged in Retail Storefront Commercial Cannabis Activity, the Licensee shall also obtain an emblem placard as required

in Section 104.23.

2. Annual license applications shall be processed in accordance with Section 104.06(a)-(c). Annual license applications may be denied for any reason, by DCR or the

Commission, for the reasons specified in Section 104.06(g).

3. DCR may immediately suspend a License without a hearing based upon: (1) notice from another City, State, or other public agency that  Licensee’s use of or conduct at

the Business Premises poses an imminent threat to life or public safety; (2) notice to DCR or DCR’s discovery that the Licensee is conducting Commercial Cannabis Activity without all necessary permits, inspections or similar clearances to operate from another City, State or other public agency; or (3) notice from the State or DCR’s discovery that the Licensee is

conducting Commercial Cannabis Activity without an active State License for that Commercial Cannabis Activity. DCR’s written findings shall conform with Section 104.13(c). After suspension, the Licensee may request an administrative hearing pursuant to Section 104.14. An Applicant may not conduct Commercial Cannabis Activity while a License is suspended.

(i) If DCR suspends a License because the Licensee is conducting Commercial Cannabis Activity at Business Premises without authorization from the State or without a required permit inspection or clearance to operate from another City, State or public agency, DCR may reinstate the License if the Licensee provides evidence of the relevant State License(s) or required permit, inspection or clearance to operate, or if such a showing is made during an administrative hearing. DCR shall not reinstate the License if a utility disconnection, padlocking or other enforcement action occurs during the period of suspension that renders the Business Premises ineligible under Section 104.03(a)(3).

4. DCR may issue a Notice of Violation based upon notice from another City, State, or other public agency, including but not limited to the Los Angeles Fire Department or Department of Building and Safety, that the Licensee has not taken the necessary corrective action to cure a violation, notice to correct, or other form of non-compliance within 90 days, or other time allotted by the citing agency. DCRs written findings shall conform with Section 104.13(c). The Licensee may request an administrative hearing pursuant to Section 104.14.

5. DCR may issue a Notice of Violation based upon evidence that a License was procured by fraud, misrepresentation, deceit, or material misstatement of fact in the application for licensure. DCR’s written findings shall conform with Section 104.13(c). The

License may request an administrative hearing pursuant to Section 104.14. Similarly, DCR recommends an amendment to consolidate LAMC section 104.06(c) into 104.06(b) and delete 104.06(c) in its entirety.

DCR proposes adding or moving this requirement to LAMC section 104.12, amending the term “local authorization” to “Local Compliance Underway,” and continuing to require LAMC section 104.08 records to renew their “Local Compliance Underway” status annually until such time a License is issued and the Licensee has the option to renew their License.

Lastly, DCR has previously provided fee deferrals to Applicants that were required to renew their record before a License was issued. Currently, deferred fees are due within 6 months or at the time of Licensure. Most Applicants have exceeded the 6-month limit; therefore, all previously deferred fees are due before Temporary Approval is issued and an Applicant’s application may be deemed abandoned due to unpaid fees if the Applicant fails to pay all outstanding fees within 30 days.

DCR recommends adding a third option to allow the deferred fees to be paid within one year of the issuance of a license. Deferred fees that are not timely paid may be subject to late fees and must be paid prior to the renewal of a License consistent with LAMC section 104.12(c).

●  establish a progressive compliance enforcement strategy, and

●  facilitate efforts by DCR’s newly formed Compliance and Enforcement Division (CED) to encourage compliance with DCR’s Rules and Regulations for licensed businesses

●  Addition of a new “Notice to Correct” procedure, which may be used for minor corrections required of the Licensee, in lieu of a Notice of Violation which carries higher penalty fees.

○  NTC may be issued where the non-compliance could be corrected by updating the Licensee’s records with DCR, such as when modifications to the License were made without prior DCR approval.

○  DCR may issue a NOV based upon evidence that a License was procured by fraud, misrepresentation, deceit, or material misstatement of fact in the Application for licensure.

●  Establish a mechanism for DCR to suspend or revoke a License and/or reinstate a License if suspended.

●  Establish factors DCR must consider when suspending or revoking a License.

(a) Violations of this Article. Within five years of discovering a Licensee or owner of Business Premises has violated this article, the Rules and Regulations, or a License condition

(violation), DCR may issue a Notice to Correct (NTC), Notice of Violation (NOV), Notice of Suspension (NOS), or Notice of Revocation (NOR). DCR may impose any administrative penalties or order corrective actions as provided in Section 104.13(b). Any action of DCR does not preclude any enforcement agency from taking its own enforcement action for violation of any local, state or federal law or regulation.

(b) Administrative Penalties and Corrective Actions.

1. Administrative Penalties fines: In addition to any of the remedies and penalties set forth in this article or any other law, DCR may impose administrative penalties on a Licensee or owner of a Business Premises using the violation classes and fine amounts specified below in Section 104.19(i). The types of violations associated with each class shall be delineated in the Rules and Regulations. Repeat Minor or Moderate violations that occur within a one-year

period and result in an administrative fine may result in escalation to a higher class of violation. Penalties associated with Minor, Moderate and Major violations shall be issued pursuant to Section 104.19(i).

(i) “Minor” violation – amount equal to 50% of the current Cannabis License fee for each and every violation;

(ii) “Moderate” violation – amount equal to 150% of the current Cannabis License fee for each and every violation; and

(iii) “MajorSerious” violation – amount equal to 300% of the current Cannabis License fee for each and every violation.

This proposal would consolidate all reasons for denial into a single newly created section,and clarify that an application or license may be denied for these reasons at either the Temporary Approval stage or during the annual licensing process.

1. DCR may deny, with no hearing and based upon written findings and evidence in the record, the issuance of Temporary Approval or an annual License for any of the following reasons:

(i) The Applicant’s Business Premises is substantially different from the diagram of the Business Premises submitted by the Applicant, in that the size, layout, location of common entryways, doorways, or passageways, means of public entry or exit, or limited-access areas within the Business Premises are not the same;

(ii) The Applicant denied DCR employees or agents access to the Business Premises;

(iii) The Applicant made a material misrepresentation or false statement on the application, or knowingly failed to disclose a material fact or any documentation required by the Department;

(iv) The Applicant failed timely to provide DCR with additional requested information, including forms or documents;

(v) The Applicant was denied a license, permit or other authorization to engage in Commercial Cannabis Activity by any state or other local licensing authority due to any illegal act or omission of the Applicant;

(vi) Issuance of a License would create a significant public safety problem as documented by a law enforcement agency;

(vii) The Applicant’s Business Premises is located in a Community Plan Area which has reached Undue Concentration, unless the City Council has adopted written findings that approval of the License application would serve public convenience or necessity, supported by evidence in the record;

(viii) The Applicant failed to adhere to the requirements of this article or the Rules and Regulations;

(ix) The Applicant engaged in unlicensed Commercial Cannabis Activity in violation of Section 104.15;

(x) The Applicant’s Business Premises was the site of Unlicensed Commercial Cannabis Activity, in violation of Section 104.15, on or after January 1, 2018;

(xi) Temporary Approval has been revoked; or

(xii) The Applicant failed a Business Premises inspection by DCR or the County Department of Public Health.

2. DCR may deny, with no hearing and based upon written findings and evidence in the record, the issuance of a Temporary Approval or License if the Applicant fails to meet any of the requirements of Article 5 of Chapter X of this Code, or if the Business Premises is ineligible under Section 104.03(a)(3).

3. DCR may deny, with no hearing and based upon written findings and evidence in the record, the issuance of a Temporary Approval or License if the Applicant is ineligible under Section 104.03(a)(1) or (2).

4. If the Application is subject to Section 104.20, DCR may deny, with no hearing and based upon written findings and evidence in the record, the issuance of a Temporary Approval or License if the Applicant fails to comply with any requirement in Section 104.20.

Eliminate several existing subsections that are no longer relevant, such as (e), (h), (l), (o), and (p).

Addition of a provision to exempt cannabis and cannabis accessories associated with a License or Licensee’s Business Premises so they are not considered “Drug paraphernalia” as defined in LAMC Section 45.19.5.

LAMC 104.11(e), (h), (l), (o), and (p) would be removed and the remaining subdivisions renumbered.

Various subdivisions of LAMC 104.11 would be amended to read:

(b) License for on-site retail sales, Type 10 and/or Type 12, must be prominently displayed at the Business Premises in a manner that makes it readable from the exterior of the Business Premises.

(e) Cannabis, Cannabis Goods, and Cannabis-related associated with a License or Licensee’s Business Premises shall not be considered “Drug paraphernalia” as defined in LAMC Section 45.19.5

(g) An Applicant and Licensee shall be subject to inspection, investigation or audit by DCR or its agents, with no notice required, to determine compliance with this article. An inspection, investigation or audit is a review of any books, records, accounts, inventory, or onsite operations specific to the Business Premises and License.

2. DCR and its agents may conduct an on-site inspection prior to issuing a new or renewal License, or for the purpose of a compliance inspection verification resulting from a complaint or investigation, in accordance with the requirements of the State of California and the Rules and Regulations. DCR may record the inspection, investigation, or audit.

(m) A Licensee shall make a good-faith effort to have no less than 30% of the weekly hours of the Licensee’s workforce performed by eEmployees whose primary place of residence is within a three mile radius of the Business Premises. A Licensee shall make a good-faith effort to have no less than 10% of the weekly hours of the Licensee’s workforce performed by eEmployees who are Transitional Workers. Transitional Worker means a person who, at the time of starting employment at the Business Premises, resides in an Economically Disadvantaged Area or Extremely Economically Disadvantaged Area, as those terms are defined in Section 11.5.6 of this Code, and faces at least two of the following barriers to employment: (1) being homeless; (2) being a custodial single parent; (3) receiving public assistance; (4) lacking a GED or high school diploma; (5) having a criminal record or other involvement with the criminal justice system; (6) suffering from chronic unemployment; (7) emancipated from the foster care system; (8) being a veteran; or (9) over the age of 65 and financially compromised. At a minimum, a Licensee is required to contact local community-based organizations, City of Los Angeles WorkSource Centers, and other such similar organizations to facilitate job outreach, development, and placement services. A Licensee is required to provide a detailed semiannual report on or before the final day of February the first business day of January and the first business day of July every year that provides evidence of its outreach efforts, including the number of persons interviewed, and details on who was hired to satisfy the good-faith effort requirement.

(n) All Licensees shall obtain a permit from the Los Angeles County Department of Public Health. If the Licensee is engaged in Retail Storefront Commercial Cannabis Activity, the Licensee shall also obtain an emblem placard as required in Section 104.23.

LAMC section 104.13

(1)   general appeal procedures;

(2)   appeals to administrative hearing officers;

(3)   appeals to the Cannabis Regulation Commission;

(4)   appeals to City Council.

Amendment to LAMC section 104.13 to specify that any decision concerning an appeal of a NOV (issued by a hearing officer) becomes final and effective 5 days after the date the decision is mailed. If there are monetary penalties associated with the NOV, DCR shall issue an invoice for the associated administrative fine after the decision becomes final with a due date in 30 days.

(a) Appeals – Generally.

1. Unless otherwise specified, a An appeal as authorized in Section 104.06, 104.07 or 104.08 must be filed with DCR within 15 days of the date of the mailing of the written decision being appealed by DCR or the Commission (lower level decision maker). The request for an appeal shall set forth the specific basis upon which the appellant claims there was an error or abuse of discretion by the lower level decision maker. Any appeal not filed within the 15-day period shall be rejected as untimely. The lower level decision maker shall transmit to the appellate body the appeal, the file of the matter, along with any report if one was prepared responding to the allegations made in the appeal.

2. The Commission shall hold a public hearing to consider an appeal as authorized in Section 104.06 within 60 days of the Commission’s receipt of the appeal. DCR shall provide notice of a Commission public hearing under this subsection pursuant to Section 104.05(b). The City Council shall hold a public hearing to consider an appeal of a Commission decision as authorized in Section 104.06 within 15 City Council meeting days of City Council’s receipt of the appeal. Notwithstanding the notice requirements in Section 104.05(b), no later than 5 days prior to any City Council hearing under this subsection, DCR shall provide notice of the hearing via email to the appellant’s agent for service of process and all Persons on DCR’s Interested Party Notification list.

3. An administrative hearing officer shall hold a hearing to consider an appeal as authorized in Section 104.07 or 104.08 within 60 days of the date DCR receives the request for an administrative hearing. An administrative hearing under this subsection shall be conducted in the manner specified in Section 104.14.

24. The time for holding any hearing required under this section may be extended by mutual agreement between the appellate body and the appellant. Failure of the appellate body to act within the time period allowed shall be deemed a denial of the appeal. If the appellate body is the Commission, DCR shall have the authority to extend the time on behalf of the Commission.

35. The appellate body may consider the decision and record before the lower level decision maker and any new written information and oral testimony timely provided to the appellate body. The appellate body shall, however, rule on the record and evidence de novo, substituting its own judgment for that of the lower level decision maker without deferring to the lower level decision maker’s findings and determinations. The appellate body may reverse or modify, in whole or in part, any decision of the lower level decision maker, including any penalties assessed by the lower level decision maker. The appellate body shall make the same written findings as required to be made by the lower level decision maker, supported by evidence in the record.

46. The appellate body shall mail its determination on the appeal within 30 days of the closure of the hearing on the appeal. The appellate body shall issue its decision on the appeal within 30 days of the closure of the hearing on the appeal. Failure of the appellate body to issue a timely determination shall be deemed a denial of the appeal.

5. If there are no further appeals available, a determination issued by an appellate body is final and effective on the date of mailing the determination .

(b) Appeals to Administrative Hearing Officers

1. A request for an administrative hearing may be filed for the matters listed in Section 104.14(a).

2. An administrative hearing officer shall hold a hearing to consider an appeal as authorized in Section 104.07 or 104.08 within 60 days of the date DCR receives the request for an administrative hearing.

3. Administrative appeal hearings shall be conducted in the manner specified in Section 104.14.

4. There is no further appeal to the Commission or City Council of a hearing officer’s determination. A final determination by an administrative hearing officer shall exhaust all administrative remedies.

 (c) Appeals to the Commission.

1. A request for an appeal to the Commission may be filed for the following:

i. DCR’s denial of an annual license application for Storefront Retailer Commercial Cannabis Activity, pursuant to Section 104.06(a)(2).

ii. DCR’s denial of an annual license application for Non-Retailer Commercial Cannabis Activity in a Business Premises Less than 30,000 Square Feet or Non-Storefront Retailer Commercial Cannabis Activity, pursuant to Section 104.06(b)(1).

iii. DCR’s denial of an annual license application for Non-Retailer Commercial Cannabis Activity in a Business Premises 30,000 Square Feet or Larger, pursuant to Section 104.06(c)(1).

2. The Commission shall hold a public hearing to consider an appeal within 9060 days of the Commission’s receipt of the appeal. DCR shall provide notice of a Commission public hearing under this subsection pursuant to Section 104.05(b).

(d) Appeals to City Council

1. A request for an appeal to the City Council may be filed for the following:

i. The Commission’s denial of an annual license application pursuant to Section 104.06(a)(3).

ii. The Commission’s denial of an annual license application for Non-Retailer Commercial Cannabis Activity in a Business Premises 30,000 Square Feet or Larger pursuant to Section 104.06(c).

2. The City Council shall hold a public hearing to consider an appeal of a Commission determination as authorized in Section 104.06 within 15 City Council meeting days of City Council’s receipt of the appeal. Notwithstanding the notice requirements in Section 104.05(b), no later than 5 days prior to any City Council hearing under this subsection, DCR shall provide notice of the hearing via email to the appellant’s agent for service of process and all Persons on DCR’s Interested Party Notification list.

(to reduce confusion)

(1)   “Branded Merchandise;”

(2)   “Canopy”;

(3)   “Delivery Employee;”

(4)   “Employee;”

(5)   “License Renewal Inspection.”

Amend definitions

(1)   “Application,”

(2)   “License” and

(3)   “State License”

Clarify that these definitions apply to all Licensees whether they have Temporary Approval, a State provisional license, and/or annual licenses from the City or State.

Any entity that is incorporated outside of the United States unless the entity possesses a certificate of qualification, certificate of registration, or certificate of status issued by the California Secretary of State.