Setting Priorities

[dropcap class=”kp-dropcap”]I[/dropcap]n September, retail cannabis business applicants in Los Angeles who hail from marginalized and disadvantaged communities finally received the green light to move forward in the licensing application process. Social Equity Program applicants, as well as businesses that have been in operation since 2007, will receive priority over all other applicant groups during the licensing process.

Voters approved Measure M in 2017, an ordinance that created the Social Equity Program. But implementation of the bill moved at a glacial pace due to a series of setbacks including loss of funding to pay Los Angeles Police Department officers overtime. Criteria to qualify as a Social Equity Program applicant includes income restrictions, residence in a “Disproportionately Impacted Area” and prior cannabis conviction requirements.

Applicants with pre-approval only had a two-week window to file their applications. Before even starting, applicants were provided with a checklist of requirements including a list of documents, as well as making sure their proposed premises were properly zoned and located outside of Sensitive-Use Areas.

From Sept. 3 to Sept. 17, Department of Cannabis Regulation (DCR) accepted license applications for pre-qualified Social Equity Program applicants. According to the DCR website, more than 1,600 qualified applicants were verified during the latest licensing round during a pre-vetting process that wrapped up in late-July. Those 1,600 will be whittled down—all the way to only 100 retail licenses.

Phase 3 Retail Round 1 is the third round of the licensing process. The first round was exclusive only to retailers who have been in operation in Los Angeles since 2007, seeking to enter into the new licensing system. The second round was for existing businesses in the supply chain such as cultivation operations and manufacturers.

Still, with only 100 retail licenses going out this round, stiff competition reigns as businesses battle for inclusion. “The Department is excited about the launch of the Phase 3 Retail Round 1 Application Processing, which opened on Sept. 3, 2019,” a news release from the DCR read. “During the Phase 3 Retail Round 1 Application Process, 100 retail licenses will be available for verified Social Equity Applicants who meet certain requirements on a first-come, first-served basis.”

“During the Phase 3 Retail Round 1 Application Process, 100 retail licenses will be available for verified Social Equity Applicants who meet certain requirements on a first-come, first-served basis.”

A company called Accella runs the online application software. Applicants were required to login to the Accela Application Portal to upload documents and applications. A convenient interactive licensing map depicts all the designated neighborhoods in Los Angeles with an infographic featuring bars that represent how many retail licenses are available in each individual neighborhood. When you hover over the bars, more information is provided as well as the number of available licenses.

Some zones such as the Los Angeles International Airport or the Port of Los Angeles have zero licenses available, while other areas have many. In late-September, 26 licenses were available in South Los Angeles. Once Phase 3 Retail Round 1 wraps up, a final retail licensing round will be open to the general public. That date has not yet been designated.

According to statistics from Marijuana Business Daily—equal representation of communities within the cannabis space is getting worse, not better, reaffirming the need for social equity programs. In 2017 for instance, 81 percent of cannabis business owners and founders were Caucasian, and the corporatization of cannabis has been blamed.

Some of Los Angeles’ suburb cities like Long Beach have introduced similar social equity programs. Nearby in Pasadena, residents are calling for a social equity program as well. Many cities across the country also look to Los Angeles for guidance, a city which has been called the largest legal cannabis market in the country.