While there has been much debate over LA’s recent Draft Regulations, not much has been stated clearly about how to prepare for the LA license application process. You can read more about the draft regulations here, here, and here. Below is some guidance from our Los Angeles Cannabis Attorneys. As you know from our previous posts on SB 94, you will need City or County authorization in order to apply for a State License. The areas you can start preparing for fall into a few main categories: real estate, taxes, corporate documents and financial planning.
Here is our Cannabis Attorney’s Initial Checklist for LA Licensing Prep:
Property: you will need a property that is in the correct zoning for your activity before you begin the application process. If you are leasing, you will need your landlord to sign an authorization letter. The City may have a specific form for this, or they may accept a notarized letter. Talk to your landlord about the fact that you will need it and make sure to check your zoning according to the Final Location Ordinance the City of LA released in September.
Taxes: you will likely need to show you are up to date on City, State, and Federal Taxes as part of the application process. If you are not up to date, you have the option of paying back taxes for taxes that were due or are owed. Consult with the Office of Finance for the City of LA regarding local taxes, the California Department of Tax and Fee Administration (CDTFA – formerly the Board of Equalization) for State Taxes, and the IRS for Federal Taxes.
Corporate Documents: who will have control over your business? Who owns the BTRC that is tied to your dispensary? A valid corporation is not required for the application process but it is essential to long term planning for your business. Note that the state continues to require nonprofit operation. We anticipate there will be a change to allow for for-profit operation and the state has made every indication that this will happen, but they have not given guidance on the timing yet.
Financial Planning: many local jurisdictions require Proof of Funds as part of the application process. Regardless of whether it is required by the application, in many cases you will need significant capital to start a cannabis business or see your current business through the compliance process successfully. Start planning now.
Regardless of how the Final Ordinance for the City of LA shakes out, you will need the four above addressed to apply for a cannabis business license in the City and to run a successful and compliant operation as cannabis enters a regulated state in California. Our online guide to California’s new regulations has more information on how cannabis will be treated under the MAUCRSA.
{{cta(’75c98fad-ab66-4c34-8425-715e7e57d0c5′)}} to learn more about how to prepare for LA cannabis licensing.
