Business Law News Social Equity

L.A. Phase 3 Social Equity Window Opened Tuesday

The prelude to Phase 3 licensing in the City of L.A. is finally upon us. Today, L.A. will begin accepting applications for Phase 3 social equity applicants for retail and delivery in the City. Specifically, Phase 3 social equity applicants will have from today through July 29th to prove up their Tier 1 or Tier 2 status. And if they can do that, they’ll move on to be able to apply for actual licensure in Phase 3, which kicks off (or should kick off) in September of this year.

If you have any hope at all of securing a coveted L.A. brick and mortar retail or delivery retail license, you must apply as a Tier 1 or 2 social equity applicant in Phase 3 and you must first demonstrate your Tier 1 or 2 eligibility in this 60-day window set up by the Department of Cannabis Regulation (DCR). This is incredibly important as the City will not accept eligibility applications after July 29th. Moreover, only 250 retail licenses remain in the entire City.

Logistically, Tier 1s and 2s will apply online through the DCR’s licensing portal. This is the specific link to register for pre-verification. There is no application or verification fee and this is not a first come, first serve process–the City will simply review eligibility applications as they come in and respond to applicants as quickly as possible. The date at which you file in this pre-vetting window has nothing to do with your place in line when Phase 3 actually opens in September. Most important of all for this 60-day window is that applicants must also upload “various documents to prove certain eligibility criteria.”

Translated: you’ll need to provide physical evidence of your low income status, your residency in a Disproportionately Impacted Area, and/or your cannabis arrest or conviction when you file online.

In the future, DCR will make the rounds on verifying that social equity applicants receive their mandatory equity allocations in their cannabis businesses but, for now, DCR is solely focused on basic eligibility criteria. For more on that criteria and how to prove you meet it, see here. Now is the time to compile your eligibility documentation so that you’re not caught flatfooted at the end of July. And applicants should include their strongest, prima facie evidence of Tier 1 or Tier 2 status where the DCR allows a range of evidence to come in, including declarations signed under penalty of perjury (which you’ll need to draft yourself since there is no designated City form for that).

To Read The Rest Of This Article By Hilary Bricken on Canna Law Blog

Published: May 28, 2019

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