Business
LA Cannabis Licensing: Retail Round Two is Here!
After many delays, controversies, and changes to the regulations, Los Angeles is finally opening its second (and last) round of retail licensing.
Based on the timeline laid out by the LA Cannabis Regulations, Retail Round Two will open by early next year. This time around, the Department of Cannabis Regulation (DCR) will use a lottery system. Applicants are expected to register for the lottery within a 30-day time frame before it begins.
When the lottery proceeds, the system will choose registrants at random from the pool. Those chosen will have a year from the date they are notified to complete their applications for Temporary Approval. This timeline lines up neatly with the state’s deadlines for provisional licensing. Local equity applicants with temporary approval have until June 30th, 2023 to apply for a state provisional license, and can renew on a yearly basis until January 1st, 2025.
I know you’re already wondering, so here’s what you need to do to prepare for this round of retail licensing.
1. Obtain social equity eligibility verification (or find a social equity partner)
In order to apply for Retail Round Two, you must qualify as a Social Equity applicant. If you are new to the game, the Social Equity Program aims to “acknowledge and repair” the harm caused by the War on Drugs by leveling the playing field and offering priority licensing to qualified applicants.
DCR opened its application for Social Equity Eligibility Verification on May 26th and will close the application on July 25th.
To qualify, you must submit documentation showing that you satisfy at least two of the following three criteria:
- Cannabis arrest or conviction in California for any crime prior to November 8, 2016
- 10 years of cumulative residency in a Disproportionately Impacted Area.
- Qualify as low income in the 2020 or 2021 calendar year:
After the July 25th deadline, DCR will spend 90 days processing the verification applications, until about mid-October.
If you don’t qualify for social equity, consider partnering with someone who does! Just make sure that your social equity partner owns and controls the majority of the business, as required by the LA cannabis regulations.
2. Register for the retail round two lottery
DCR will give applicants who have received Social Equity verification a 30-day window to register for the lottery before it begins. The lottery itself will only take one (1) day, and DCR is supposed to notify the public at least 15 days before it starts. You don’t need property or even a business for this part. The aim of the lottery is to identify social equity applicants for further processing.
The number of applicants chosen for the lottery depends on the number of available licenses. LA regulations limit the number of retail businesses per community plan (e.g. South Los Angeles, Hollywood, etc.). So far, there are about 230 retailers with pre-approval and 200 still waiting for application processing. According to my calculations, there should be a little over 30 available retail licenses in LA. Therefore around 30 registrants will be selected through the lottery.
3. Wait for the results (and maybe try again via PCN)
Once you win this lottery, the real hard work starts: you have a year to submit a completed application for Temporary Approval. This would be a good time to consider seeking the support of one of HB’s highly qualified local cannabis attorneys.
If you aren’t selected, there’s still hope! Some applicants may not complete their applications and DCR may disqualify some applicants. Furthermore, not every community plan will reach its retail license cap. So we may see a second or even third lottery.
Alternatively, if you wish to apply for a retail license in a community plan that has reached its cap, you can file a Public Convenience and Necessity application with DCR and seek the approval of the City Council member for that district.
There’s more to come, so stay tuned to Canna Law Blog for regular updates on Retail Round Two and the future of Los Angeles cannabis licensing.
Source: https://harrisbricken.com/cannalawblog/retail-round-two-is-here/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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