PART B: THE LATEST IN LA

Last Fall, you Chose Your Own Adventure in our Provisional Licensing Decision Tree (scroll down to view the updated version). The State of California had just passed the 2021 ‘Trailer Bills,’ the legislation that accompanies the Governor’s yearly Budget Act. The budget bill authorizes spending, and the trailer bills outline how money will be spent.

2021 Trailer Bills shifted deadlines and compliance benchmarks for provisional applicants and licensees. One of those deadlines is coming up at the end of this month, on March 31.

Here’s what you need to know:

  • The deadline to apply for new large-scale / stacked cultivation provisionals has passed. From 2/1/2022, new stacked-license cultivation operations must satisfy all conditions of the annual license, including California Environmental Quality Act (CEQA) compliance.
  • For most license types (exception: social equity applicant with cultivation activities; see the bullet point below), your last opportunity to apply for a provisional license is at the end of the month. To be eligible, you must submit your license application by 3/31/2022 and the license must be issued by 6/30/2022.
  • If you are an outdoor grower under certain canopy limits, you may be issued a new provisional license until 9/30/2022, as long as you provide the required documents. Applications are due by 6/30/2022. If you’re not sure whether you qualify, call us.
  • If you are a local equity applicant with cultivation activities, you may be issued a provisional license until 6/30/2023. Applications are due by 3/31/2023.
  • For cultivation applications submitted in 2022 or later, a provisional will not be issued if it would cause the licensee to exceed certain canopy limits across multiple cultivation licenses on contiguous premises.
  • Once the provisional license doors close, the Department of Cannabis Control (DCC) will no longer issue you a provisional license. The only remaining pathway is to satisfy all the requirements for an annual license.
  • Existing provisional licensees may continue to renew by satisfying compliance benchmarks.
  • 2025 is the last possible year to maintain a provisional license.

The key stepping stone between a provisional and an annual license is compliance with the CEQA. If you’ve been keeping an eye on licensing in California, you’re probably aware that in many jurisdictions, the CEQA process is nightmarishly unclear and/or still being figured out.

PART B: THE LATEST IN LA

Terms & Acronyms:
CEQA = California Environmental Quality Act
DCR = Los Angeles Department of Cannabis Regulation (Local level)
DCC = California Department of Cannabis Control (State level)
Temporary Approval = LA’s term for local approval to operate a cannabis business.

Inside Insight: Licensing in LA

Present and future LA cannabis operators, here’s what you need to know:

  • According to DCR, Tier 3 is Not Social Equity: The DCR has clarified that it will not treat Tier 3 Social Equity Licensees as entitled to the state-level Social Equity deadlines. Apply as a general applicant by the deadline in the Provisional Licensing Decision Tree.
  • Talk to DCR before the 3/31/2022 Deadline: For new general applicants who are cutting it close and need to meet the March 31, 2022 deadline (see Part A above), make sure to tell your LA City DCR Analyst that you’re applying to DCC. The key here is to communicate with your City and State analysts to ensure DCR issues the Notice of Local Compliance Underway Letter that demonstrates Local Approval.
    • REMINDER: To operate ASAP in LA, plan to submit for Temporary Approval before the DCC’s 3/31/2022 deadline. The benefit of applying by that deadline is that you get to avoid the more in-depth CEQA analysis required for Annual License applicants
  • LA’s CEQA Compliance Plan is TBD…: The DCR has not yet developed its CEQA process.
  • …BUT More Funding is Coming for Cannabis Licensing & CEQA: The City Council accepted $22.3M in State funding, and DCR will begin the process of hiring and dispersing funds to:
    • Assist with CEQA program assistance for licensees and environmental consultants.
    • Hire 21 DCR positions, 3 City Attorney positions, and 2 Customer Service Specialists with the Office of Finance.
  • If you have Temporary Approval and Need Provisional Renewal: So long as you have your 2022 Temporary Approval in hand, DCR will generate a letter that CEQA is underway for purposes of the Provisional License Renewal Application. LA licensees should expect to receive this letter when their 2022 Temporary Approval is renewed, sometime in April 2022.
  • Fee Increases by Fall? This is not good news. We’ll know more details by May, but it seems the fee increase will happen by 9/1/2022. DCR appears sensitive to fee increases and a tiered structure may be in the works.
  • A New Ordinance is Coming: On February 16, 2022, the LA City Council voted on the Marquis Harris-Dawson Motion discussed initially in this GF Bulletin and detailed in this Council File, which includes an amended motion, and a number of reports, findings, and recommendations from Planning and DCR. The City Attorney is now tasked with preparing an ordinance to reflect the cannabis licensing, regulation, and policy changes. Stay tuned. Clark Howell will issue a Bulletin detailing the rule changes once that ordinance is finalized.

There is still time. We’re here to help you meet these deadlines.
Contact our office if you’d like to discuss how we might be able to assist.

UPCOMING EVENTS

2nd Annual Cannalaw Summit
May 3rd-5th

Please join CHLLP founding partners Ariel Clark and Nicole Howell at the 2nd Annual Cannalaw Summit taking place virtually May 3rd – May 5th.

Nicole will lead a roundtable discussion on the future of cannabis law and what’s next for legalization, the cannabis industry, and the legal profession. Her panel discussion kicks off the Summit on May 3rd following the opening remarks.

Ariel will be speaking later that day on a panel to discuss the right way to build a holistic entheogen practice with other professionals in the plant medicine/psychedelics field.

We look forward to connecting with you there!

Get Ready: Inside LA County Cannabis Licensing
March 30th

Join CHLLP attorneys Ariel Clark and Katie Podein for a nuts-and-bolts legal and strategic discussion on the new LA County cannabis program.

We’re thrilled to have Veronica Perez join this conversation. She is a seasoned Public Affairs professional in the Los Angeles Market for over 20 years, advising Fortune 500 companies and nonprofits on navigating the regulatory and political environment. This hour-long, live webinar will take place on March 30, 2022 at 12:00pm PT.

Get informed! Save the date!

If you have any questions about how the above or would like to discuss how it could impact your business, please contact your attorney directly or call our main line at 877-257-2442.

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