Los Angeles’ Latest Draft Rules Worry Cultivators and Manufacturers

Existing cultivators and manufacturers in Los Angeles may be forced to shut down. Under the city’s revised draft requirements that were proposed on Friday, cultivation and manufacturing businesses may have to shut down for months until they receive city licenses. For many businesses, going without sales for months could mean bankruptcy.

Los Angeles’ proposed regulations were first unveiled on June 8. The City of Los Angeles released the Revised Draft Requirements for Commercial Cannabis Activity on September 22.

Law firms in the cannabis space issued updates and warnings considering the new revisions. “The major change is that only dispensaries will be allowed to apply first—under Priority licensing—to the city,” Margolin & Lawrence, attorneys at law stated in a press release. “Originally, cultivators and manufacturers that could prove they had been operating since before January 1, 2016, were going to be able to apply along with dispensaries who had a 2016 or 2017 business tax registration certificate from the City (BTRC). Now, all cultivators and manufacturers will apply in the Social Equity or General Processing round, which will be held at the same time.”

The protective Certificates of Compliance that were given to cultivators and manufacturers who began operation before 2016 will no longer be issued. The new regulations also allow for up to 1.5-acre cultivation sites, which gives larger cultivation operations the upper hand.

Fairly similar regulation changes in Michigan have aroused worry among cannabis business owners. Business owners in Michigan also face a months-long gap that may put hundreds of collectives out of business.

City Council President Herb Wesson did his best to dispel the concerns of cultivation and manufacturer business owners. “I realize that that’s a flaw, and we’re going to try to deal with it,” Wesson said at the meeting. “But I’m not going to let one flaw slow down the process.”