The Los Angeles City Council has shoved its slow-motion legal cannabis process into gear with a number of amendments to existing regulations.
Not only is it drafting legislation to reinvest weed taxes back into the community but has also called on its City Attorney and other departments to become more pro-active by clarifying, tightening and technically repairing the city’s current commercial cannabis legislation.
The City Council has also introduced more stringent regulations for the licensing granting process to previously convicted felons.
With California earmarked as the biggest marijuana marketplace worldwide, LA’s initiative could play a dominant role in an industry that will plough billions of tax dollars into State coffers.
The Social Equity Program
But it’s the city’s Social Equity Program (SEP) that is the center of attention and more legislation regarding this is expected to be formulated in the weeks ahead.
Last year, LA adopted a Social Equity Program to provide opportunities and access for people who were disproportionately impacted by the failed War on Drugs.Impacted areas were earmarked as police districts with high marijuana arrest rates such as MacArthur Park where 427 people were arrested compared to LA’s city-wide average of 72.
The City Council has introduced a three tier SEP system:
Tier 1: Low income bracket with earnings below $41,230 annually – 51% ownership is required by the applicant. Eligible to apply for retail licenses under the 2:1 ratio set by the City Council and for non-retail licenses under the 1:1 ratio.
Tier 2: Low income earner with a five year cumulative residency in a qualifying zip code OR 10 years cumulative residency in a qualifying zip code. 33⅓% ownership is required by the applicant. Eligible to apply for retail licenses under the 2:1 ratio set by the City Counciland for non-retail licenses under the 1:1 ratio.
Tier 3: Applicants will not be allowed to obtain retail licenses but will be eligible to apply for non-retail licenses under the council’s 1:1 ratio.Landlords must provide capital, leased space, business, licensing and compliance assistance to both Tier 1 and Tier 2 applicants. They will also have to provide Tier 1 applicants with access to rent-free property and prorated utilities for a minimum of two years. The property must meet certain requirements.These conditions will apply to all landlords who want to take part in the City of Los Angeles’ Social Equity Agreement.
The City Council also proposes to introduce a number of education and training SEP projects.
Cannabis Reinvestment Trust Fund
The City Council has also called on the City Attorney to draft a Cannabis Reinvestment Trust Fund Ordinance to be voted on by the public at the State General Election on the 6th November, 2018.
The Ordinance will call for a one percent tax rate on all commercial cannabis sales that will be reinvested into the community.
The City Council’s newly-amended regulations become effective on the 23rd July and include:
- Advertising of commercial marijuana, both on and off-site
- Cannabis quality assurance testing
- Technical Fix Legislation calling on existing medical marijuana dispensaries (EMMDs) to become current on outstanding taxes
Felony convictionswill disqualify license applications
Additional amendments that will disqualify applicants from applying for licenses if they have felony convictions involve the following crimes:
- Sex trafficking
- Crimes against children
This licensing ban will remain effective for 20 years from the date of the conviction. It also applies to applicants who have completed their term of imprisonment, their supervised release or probation,if those conditions were applied as part of the sentencing process.