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CANNABIS REGULATION COMMISSIONJULY 30, 2020

● Summary of DCR activities since the last meeting of the Cannabis Regulation Commission.

● Summary of amendments to Article 4, Chapter X of the LAMC, including amendments to Section 104.19 regarding fees and fines associated with Commercial Cannabis regulations, Ordinance No. 186703.

● The “PCN” process and related requirements.● The Pre-Application Review process and related requirements.● The Temporary Approval application process and related requirements.● The process to request Business Premises Relocation and related requirements.● The definition of Equity Share and related requirements.● Phase 3 Retail Round 1 2

Report Summary

DCR Activities To Date

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Summary of DCR Activities

● COVID-19● Racial Equity ● Budget and Administration ● Licensing● Social Equity Program ● Communications● Policy

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COVID-19

Novel coronavirus, “COVID-19,” is a new virus that hasn’t been identified before in humans. The spread of COVID-19 has been declared a public health pandemic by the World Health Organization and the Centers for Disease Control.

Members of the public are encouraged to get the facts about coronavirus by visiting the following websites for more information and resources related to COVID-19.

● Corona-virus.la for information from the City of Los Angeles.

● Publichealth.lacounty.gov for information from the County of Los Angeles.

● Cdc.gov for information from the Centers for Disease Control.

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COVID-19

Members of the public are further encouraged to take steps to care for themselves and their community by doing all of the following:

● Wash hands often● Avoid close contact● Cover mouth and nose with a cloth face cover when around others● Cover coughs and sneezes● Clean and disinfect● Monitor health daily

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COVID-19

The Department of Cannabis Regulation (DCR) is taking every precaution possible to prevent the spread of COVID-19. To help protect the health of our customers and staff, and in line with Mayor Garcetti’s directives, DCR has implemented the following:

● Cannabis Regulation Commission meetings will be conducted telephonically until further notice.

● DCR’s Public Service Counter is currently closed.● DCR Licensing and Information Services are still available online at

cannabis.lacity.org or by phone at 213-978-0738 from 10am to 3pm (Pacific Time).

● DCR is piloting virtual inspections. 7

Racial Equity

On June 19, 2020, Mayor Eric Garcetti signed Executive Directive 27: Racial Equity in Government.

Amongst a variety of initiatives that will be managed by the City’s Chief Racial

Equity Officer, the Mayor has directed each Department to:

● Designate a Racial Equity Officer

● Develop a Racial Equity Action Plan

● Participate in the Racial Equity Task Force

● Prepare for the future 8

Budget & Administration

● FY 20 -21 - Fiscal Emergency Declared

● Key Department Resources Continued

● Consideration of Furloughs

● Current Hiring and Contracting Restrictions Imposed:

○ Potential Impact on Licensing and Social Equity Program

○ Potential Impact on Revenue Collection

○ DCR is seeking an exemption from current restrictions

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Social Equity Program

● Business Licensing and Compliance Assistance - LAMC 104.20(c)(4)(iii)

● Programming, curriculum development and training in the areas of:

○ state and local licensing requirements

○ commercial cannabis regulations

○ general business development

○ cannabis-specific business development

○ workforce development

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Social Equity Program

● Financial Grant Program - LAMC 104.20(c)(4) (iv)

○ DCR is working to establish requirements and restrictions related to the Financial Grant Program. These requirements and restrictions will be established in the Department’s Rules and Regulations.

○ Participation in the Financial Grant Program will be subject to availability of resources.

○ DCR is preparing a plan to develop and manage this program whereby $5 million would be made available to Social Equity Applicants. Funding for this program is provided by the California Cannabis Equity Act.

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Social Equity Program

● California Cannabis Equity Act -- Cannabis Equity Grants Program for Local Jurisdictions

○ Bureau of Cannabis Control (BCC) ○ $10 Million in Grant Funding Available ○ City of Los Angeles award amount: $1,834,156.00

● Governor’s Office of Business and Economic Development (Go-Biz) ○ $30 Million in Grant Funding Available ○ City of Los Angeles award amount: $6,042,014.00

Two seperate grants, each with their own eligible uses and reporting requirements (ex. Demographic Data). Funds from both grants will be be used to support various components of the City’s Social Equity Program. More information will be forthcoming. 12

Social Equity Program

The Department is pleased to share that it has been working in close coordination with SmartLaw, a service of the Los Angeles County Bar Association (LACBA), to make additional services available to Social Equity Individual Applicants.

Through a referral program administered in coordination with the Department of Cannabis Regulation, and in support of the City’s cannabis Social Equity Program, LACBA and SmartLaw will provide Social Equity Individual Applicants with limited pro bono referrals in the area of cannabis business representation.

Additional information regarding this service will be announced next month.

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Licensing

● Phase 1:○ 189 businesses have received Temporary Approval.

● Phase 2:○ On July 2, 2020, Applicants without Temporary Approval were reminded that their

local authorization would expire on July 4, 2020, if they did not pass the pre-licensing inspection by July 3, 2020, but DCR would not immediately abandon their Application.

○ Losing local authorization, eliminates limited immunity by operation of law under LAMC Section 104.08(c).

○ Applicants were alerted that their Application would be abandoned as of July 20, 2020, unless, by no later than July 19, 2020, the Applicant either: ■ registers a notice of intent to relocate; or ■ submits a request to schedule an initial or follow-up pre-licensing inspection.

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Licensing

● Phase 2 - Cont’d○ 449 active Phase 2 records as of July 4, 2020:

■ 184 businesses have received Temporary Approval

■ 190 businesses passed a pre-licensing inspection by July 3, 2020.

■ 75 businesses did not pass a pre-licensing inspection by July 3, 2020.

● 41 of the 75 businesses registered their intent to relocate or make other modifications to their application.

License Renewals

On July 1, 2020 the Department sent a communication to Phase 1 and Phase 2 Applicants with Temporary Approval granting an extension of time to pay renewal fees until July 17, 2020. Licenses that were not timely renewed expire on July 31, 2020.

Testing Laboratories

The Department has issued 18 Temporary Approvals for testing laboratories.

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Licensing

● Phase 3 Retail Round 1:○ DCR has identified 100 Social Equity Applicants eligible for further

processing per Sec. 104.06.1(b)(6).○ DCR is reviewing an additional 100 Applicants, including one Applicant

deemed ineligible due to a location in the Boyle Heights Community Plan Area and 14 Applicants deemed ineligible due to a location within 700 feet of an invoiced Phase 3 Round 1 application per Sec. 104.06.1(b)(7).

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Licensing

● PCN Requests:○ Six Community Plan Areas (Central City, Central City North, Harbor Gateway, Sherman

Oaks/Studio City, Sun Valley/La Tuna Canyon, and Venice) have reached undue concentration limits.

○ Boyle Heights, Hollywood, North Hollywood, and West LA have not reached undue concentration due to the recently adopted amendments.

○ Applicants who wish to apply within these Community Plan Areas must request a finding for Public Convenience or Necessity (PCN) from City Council.

○ 69 Social Equity Individual Applicants have registered their intent to submit a PCN request: Central City (39), Central City North (5), Harbor Gateway (4), Sherman Oaks/Studio City (8), Sun Valley/La Tuna Canyon (10), and Venice (3).

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Licensing

● 2020 License Renewals:○ Extended 2020 License Renewal Deadline to July 17, 2020.

■ 31 Phase 1 businesses have not renewed one or more activities.■ 25 Phase 2 businesses have not renewed one or more activities.

○ Late payments accepted through Friday, July 31, 2020.○ Licenses that are not timely renewed will expire Friday, July 31, 2020.○ 2020 Temporary Approval (TA) documents will be printed by August 28, 2020.○ 2020 TA document(s) will be mailed and should arrive by September 18, 2020.

● Phase 2 Applicants who receive their TA after July 31, 2020 will be issued a separate 2020 License renewal invoice; payment is due within 10 days.

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Licensing

● 2021 License Renewal:○ Renewal window will open on Monday, September 7, 2020.○ Renewal window will close on Monday, November 2, 2020.○ Licenses that are not timely renewed will expire Thursday, December 31,

2020.○ 2021 Temporary Approval (TA) documents will be printed by Friday,

December 18, 2020○ Businesses must be current on taxes through September 30, 2020 to

receive their renewal licenses.

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Licensing

● Phase 1 Applicants:○ Phase 1 businesses that receive 2020 Temporary Approval (TA) documents will

have the opportunity to request relocation within their CPA and/or separate their activities before submitting their Annual License Application.

○ The modification process will be streamlined using the Accela portal for submissions and approvals.

○ Phase 1 businesses with 2020 TA may submit for their 2021 renewals and Annual Application beginning in September.

○ The first set of Phase 1 Annual Applications may be deemed complete by the end of 2020.

○ DCR may hold the first set of virtual community meetings in January 2021.○ The first set of Phase 1 applications may be transmitted to the Commission in

Spring 2021. 20

Licensing

● Phase 2 Applicants: ○ Phase 2 businesses that receive 2020 Temporary Approval (TA) documents will

have the opportunity to request relocation within their CPA and/or separate their activities before submitting their Annual License Application.

○ The modification process will be streamlined using the Accela portal for submissions and approvals.

○ Phase 2 businesses with 2020 TA may submit for their 2021 renewals and Annual Application beginning in September.

○ The first set of Phase 2 Annual Applications may be deemed complete by the end of 2020.

○ The first set of Phase 2 Annual Licenses may be issued in Spring 2021.

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Communications

● DCR Website:○ The Department’s website is currently undergoing a comprehensive review to update the

information in accordance with the code amendments recently adopted and to provide a more intuitive resource for our stakeholders.

○ The website will provide portals, video tutorials, interactive maps, specific licensing information, consumer information, and dedicated landing pages for the Social Equity Program and community outreach efforts.

○ The website will serve as a valuable tool in DCR’s communications toolbox as we continue to improve our direct communication with our applicants, licensees, stakeholders, and industry.

● Stakeholder Meetings and Community Listening Sessions:○ DCR is currently in the process of selecting a contractor to design and facilitate stakeholder

meetings and community listening sessions. ○ The stakeholder meetings and community listening sessions are intended to assist DCR in

developing programs and policies to better serve the Community.22

Policy

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Policy

● Performance Audit:

○ In November of 2019, the Mayor’s Office instructed the Chief Administrative Officer (CAO)

to utilize an independent, third party auditor to conduct a performance audit and review of

the Department of Cannabis Regulation’s Phase 3 Round 1 licensing process

○ The audit was in response to concerns raised by applicants and other members of the public

about the fairness of the Phase 3 Round 1 licensing process.

○ At the request of the Mayor’s Office, the Department paused the further processing of

Phase 3 Retail Round 1 applications until the completion of the Audit.

○ The purpose of the audit was to determine whether errors occurred on the morning of

September 3, 2019, when licensing began and, if errors occurred, the nature of those errors

and the degree to which they were material to the first-come, first-served application

process. 24

Policy

● Performance Audit - Cont’d:

○ The audit was concluded on Friday, March 27, 2020.

○ The Auditor found “that the DCR conducted the process in good faith and found no evidence of bias or unfairness.”

○ Further, the Auditor concluded that the DCR’s “normalization process effectively negated any benefits that those applicants received by their early access.”

○ Based on the Auditor's findings, the CAO recommended that the Department be, “directed to complete the processing of Phase 3 Retail Round 1 processing and commence the necessary work required to conduct the Phase 3 Retail Round 2 process later this fiscal year.”

○ The CAO further recommended that, “In conducting the next licensing process, DCR should take into account the Auditor’s recommendations relative to improving the process for future rounds of licensing applications.”

○ DCR transmitted to City Council its response to the audit on April 10, 2020. 25

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Policy

● DCR Policy Objectives:○ On June 16, 2020, the DCR transmitted a series of reports to the Los

Angeles City Council proposing amendments to the Cannabis Procedures Ordinance.

○ The proposed amendments sought immediate and comprehensive improvements in the administration of the City’s commercial cannabis Licensing and Social Equity Program.

○ DCR’s policy objectives were included in the following reports:

DCR Reports & Recommendations

■ DCR Report No. 1 (CF 20-0782):➢ Recommended amendments to LAMC Sections 104.01, 104.02, 104.03. 104.04, 104.05,

104.07, 104.08, and 104.12. ➢ Included proposed language to clarify the public convenience or necessity (PCN) process

and to allow Business Premises relocations.

■ DCR Report No. 2 (CF 20-0785):➢ Recommended amendments to LAMC Sections 104.06, 104.06.1, 104.20, 104.21, and

104.22. ➢ Limited Type 9 and Type 10 application processing to only Social Equity Applicants until

January 1, 2025; create a lottery process for Phase 3 Round 2 Application processing; ➢ Allowed for the issuance of Temporary Approval; ➢ Revised the definitions of Equity Share, Low Income and Disproportionately Impacted Area; ➢ Revised the qualifying criteria for a Social Equity Individual Applicant. 27

DCR Reports - Con’t

■ DCR Report No. 3 ( CF 17-0653):➢ Transmitted the Expanded Cannabis Social Equity Analysis as directed by the City Council

(Council File No. 14-0366-S5).

■ DCR Report No. 4 (CF 20-0420):➢ In conjunction with DCR Report No. 1, this report outlined the step-by-step process to

request a PCN finding from City Council.➢ Recommended approval standards for City Council consideration and adoption by

resolution.

■ Fee Study Report (CF 20-0777):➢ Included a fee study to fully recover the Department’s costs involved in the administration

of the City’s commercial cannabis licensing program.

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Items Prepared for Council Consideration

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DCR Policy Objectives

● Establish a process for the issuance of Temporary Approval for all

Applicants.

● Establish a process for businesses to relocate.

● Clarify the process for Applicants to request a finding of public convenience or necessity (PCN).

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DCR Policy Objectives - cont’d

● Establish a process to allow individuals to participate in the Social Equity Program based on either the original criteria or new criteria as supported by the Expanded Cannabis Social Equity Analysis.

● Amend the selection process for Phase 3 Round 2 Social Equity Applicants eligible for retail application processing by creating a lottery process rather than the current online, first-come, first-serve process.

● Expand the definition of Equity Share and create related requirements to provide additional protections to mitigate against potential predatory practices.

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DCR Policy Objectives - cont’d

● Limit Type 9 and Type 10 application processing to Social Equity Individual Applicants until January 1, 2025, unless the Applicant received priority processing under LAMC Section 104.07.

● Reorganize, clarify, and include necessary procedures for the administration of the City’s commercial cannabis licensing and Social Equity Program.

● Address the recommendations put forth by the Cannabis Regulation Commission.

● Address the extensive feedback from the licensing and Social Equity Program stakeholders.

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Article IV: Cannabis Procedures

104.00 Purpose.104.01 Definitions.104.02 License Required.104.03 Application Procedure.104.04 Pre-licensing Inspection and Community Meeting.104.05 Notice.104.06 Issuance of License.

104.06.1 Retailer Commercial Cannabis Activity Application Processing.

104.07 Proposition M Priority Processing.104.08 Non-retailer Commercial Cannabis Activity Prior to

January 1, 2016, Processing.104.09 Testing Lab Licenses.104.10 License Appeal Procedure.

104.11 Mandatory Requirements.

104.12 Renewal and Cancellation.104.13 Administrative Violations and Penalties.104.14 Administrative Hearing Procedure.104.15 Enforcement and Penalties for Unlawful Cannabis

Related Activity.104.16 Administration.

104.17 Severability.104.18 No Vested or Nonconforming Rights.104.19 Fees and Fines.104.20 Social Equity Program.104.21 Management Companies.104.22 Cannabis Corporate Responsibility Report.104.23 Storefront Retailer Emblem Program.

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Sec. 104.03 - Application Procedure

Past Sec. 104. 03 Organization

(a) How to apply for a License, Fees, Phase 1 Fees Phase 2 Fees, PCN process

(b) Incomplete Application, additional documents, withdrawing an Application

(c) Ineligibility to apply for a License

(d) Commission determination that a Person is ineligible to apply for a License

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New Sec. 104. 03 Organization

(a) Application - Pre-Application Review1. Disqualification from holding a License 2. Disqualification from being an Owner of a

License3. Disqualification of the Business Premises4. PCN Process

(b) Application - Filing and Fees(c) Application - Determination of Completeness(d) Application - Withdrawal(e) Application - Modification

1. Relocations2. Ownership Structure3. Legal Entity Name Change4. Physical Modification of Business Premises5. Fictitious Business Name Change

(f) Calculation of Time

Section Reorganization

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Past Sec. 104. 06.1 OrganizationRetailer Activity Application Processing

(a) Type 9 & Type 10 Application Processing (Except Phase 1) in compliance with Sec. 104.20

(b) Social Equity Applicant Verification & Application Period for all rounds

(c) Type 10 Application Processing - Round 1

(d) Type 10 Application Processing - Round 2

(e) PCN Applications

(f) Type 9 Application Processing

(g) Application Amendments

Sec. 104.06.1 - Application ProcessingSection Reorganization

New Sec. 104. 06.1 OrganizationSocial Equity Program Application Processing

(a) General - Applicability(b) Type 10 Application Processing - Round 1

1. Social Equity Individual Applicant Verification2. Application Period3. Procedure

(c) Type 10 Application Processing - Round 2

(d) PCN Application Processing

(e) Type 9 Application Processing

(f) Non-Retail Application Processing

Social Equity Program Organization

Past Sec. 104. 20 Organization

(a) Priority Processing Program Benefit

(b) Tier 1 Criteria + Benefits

(c) Tier 2 Criteria + Benefits

(d) Tier 3 Criteria + Responsibilities

(e) Tier 3 Benefit (Priority Processing)

(f) Tier 1, Tier 2 and Tier 3 Workforce

Requirements

(g) Social Equity Agreement Requirement for Tier 3

(h) Additional Requirements for Tier 1 and Tier 2

(i) Programs and Incentives by DCR

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New Sec. 104.20 Organization

(a) Program - Original Eligibility Verification1. Individual Eligibility Verification (Tier 1, Tier 2,

Tier 3 criteria and definitions)2. Entity Eligibility Verification (Equity Share and

ownership)(b) Program - Expanded Eligibility Verification

1. Social Equity Individual Applicant (new criteria and definitions)

2. Entity Eligibility Verification (Equity Share and ownership)

(c) Programming - Benefits & Requirements1. Programming Requirements2. Programming Benefits

Social Equity Program

● Reorganizes LAMC Section 104.20.

● Clarifies and expands Program requirements and benefits.

● Limits Type 9 and Type 10 application processing to Social Equity Individual Applicants until January 1, 2025, unless the Applicant received priority processing under LAMC Section 104.07.

● Expands the definition of Equity Share and creates related requirements to provide additional protections to mitigate against potential predatory practices.

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Social Equity Program

● Allow individuals to participate in the Social Equity Program based on the original criteria or new criteria as supported by the Expanded Cannabis Social Equity Analysis.

● Revise the definition of Social Equity Individual Applicant for those seeking to participate in the Program based on the Expanded Analysis to any individual who meets any two of the following three criteria: 1) Low Income 2) a prior California Cannabis Arrest or Conviction 3) ten year’s cumulative residency in a Disproportionately Impacted Area.

● Revise the definition of “Low Income” to be based on the annual U.S. Department of Housing and Urban Development (HUD) income limits which considers household size and assets. Furthermore, the amendments add definitions for “Household Size” and “Asset.”

● Revise the definition of Disproportionately Impacted Area in accordance with the Expanded Analysis which recommends using 151 Police Reporting Districts instead of Zip Codes as the geographic unit for inclusion in the Program.

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Cannabis Procedures Ordinance

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Cannabis Procedures OrdinanceChanges in Licensing Program

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Before Amendments

No process to determine eligibility regarding Owners & Business Premises location prior to applying for a License.

Temporary Approval limited to Phase 1 and Phase 2 Applicants

Phase 3 Applicants required to proceed to annual licensing process before receive authority to operate.

Business Premises Relocation is Prohibited

No PCN Standards

After Amendments

Pre-Application Review Available!

Temporary Approval available for all applicants eligible for further processing!

Business Premises Relocation is Allowed!

PCN Standards Adopted!

Cannabis Procedures OrdinanceChanges in Social Equity Program

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Before Amendments

Approximately 150 Retail Licenses Available SEAs Processed on 2:1 Ratio .

Phase 3 R Round 1 - Authorization to identify 100 Applicants eligible for further processing. First Come, First Served; Online.

Phase 3 R Round 2 - Remaining Retail LicensesFirst Come First Serve

Social Equity Applicants express concern regarding:● Program Eligibility ● Lack of Access to Capital ● Predatory Practices

After Amendments

Approximately 250 Retail Licenses Available! Retail & Delivery Licenses Limited to SEAs until 2025!

Phase 3 R Round 1 - 100 applicants determined eligible can apply for Temporary Approval (TA)!

DCR is authorized to identify an additional 100 applicants eligible for further processing; then apply for TA!

Phase 3 R Round 2 - Remaining Retail Licenses available via Lottery with no upfront property requirement!

Eligibility Criteria Better Targets Communities Impacted! Authorization to establish Financial Grant Program! Equity Share Definition Seeks to Afford Additional Protections!

The PCN Process and Related Requirements

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Overview ● LAMC 104.03(a)(4). ● The City of Los Angeles limits the number of Type 10 Retail Licenses.● This limitation is based on the population of each Community Plan Area (CPA)

within the City at one license per 10,000 residents. ● Once a CPA limit has been reached, the CPA has reached Undue Concentration. ● Type 10 Retail Licenses in any CPA that has not reached Undue Concentration will

only be available via Phase 3 Round 2. ● Applicants seeking to apply for a Type 10 Retail License in a CPA that has reached

Undue Concentration may submit a request to the City Council for a finding that approval of the License application would serve the public convenience or necessity (PCN) by evidence on the record.

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PCN Standards

● The existing commercial cannabis businesses in the requestor's CPA are concentrated in one area, such

that the requestor's business, located in another area, would serve the public convenience or necessity;

or

● The proposed business premises would serve an area of increased density or consumer traffic,

including, but not limited to, an entertainment or commercial corridor, such that the proposed location

would serve the public convenience or necessity by satisfying a higher demand for retail locations; or

● The proposed business premises would be located in an area with a high number of unlicensed

commercial cannabis retail establishments, such that an additional licensed location would serve the

public convenience or necessity by satisfying a higher demand for retail locations and reduce

patronage of unlicensed establishments; or

● The requestor's business would include clear specified public safety related features, such that the

operation of the requestor's business would serve the public convenience or necessity by likely

reducing crime or nuisance activity in the surrounding area. 44

How to Request a PCN Finding

1. Read and follow DCR procedures in related Bulletin.

2. Submit PCN Request Form.

3. Pay the PCN Application Fee.

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PCN Workflow

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Pre-Application Review Process and Related Requirements

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Overview

● LAMC 104.03(a). ● First stage in the application process: determine if the application

is eligible for further processing. ● Based on information related to:

○ Primary Personnel & Owner(s) ○ Business Premises Location

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How to apply for Pre-Application Review

1. Read and follow DCR procedures in related Bulletin.

2. Submit information required for the Pre-Application

Review via Accela.

3. Pay the Pre-Application Review Fee.

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Pre-Application Review Workflow

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Temporary Approval Process and Related Requirements

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Overview

● LAMC 104.03(b) Application - Filing and Fees ● LAMC 104.06(d) Temporary Approval

○ Applicants must first Complete the Pre-Application Review Process.

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Overview.

DCR may at its discretion issue a Temporary Approval to engage in Commercial Cannabis Activity provided the following requirements are met:

● the Applicant receives authorization from the State; ● the Business Premises location passes an Initial Inspection● there are no fire or life safety violations at the Business Premises● the Applicant submits the required attestations, as determined by DCR. ● the Applicant indemnifies the City on a form provided by DCR.

Applicants and Licensees subject to Section 104.20 shall also provide all business records and agreements necessary to demonstrate that the Social Equity Individual Applicant owns the minimum Equity Share required under Section 104.20(a)(2).

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How to apply forTemporary Approval

1. Read and follow DCR procedures in related Bulletin.

2. Submit information required for Temporary Approval via

Accela.

3. Pay the Temporary Approval Application Fee.

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Temporary Approval Workflow

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Process to Request Business Premises Relocation and Related Requirements

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Overview

● LAMC 104.03(e)(1) ● Applicants must provide DCR with the following:

● site plan● Business Premises diagram● copies of the licenses from the applicable State agency or agencies● copy of an executed lease with proof of a deposit or property deed for the new

location● landowner acknowledgement that the Licensee has the right to occupy the property

for the Commercial Cannabis Activity or Activities

An Applicant or Licensee shall not relocate without prior written approval by DCR.

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Overview - Con’t

● DCR will review the request and notify the applicant or licensee if the new location complies with LAMC 105.

● DCR will provide written notification when the requested modification has been processed.

● DCR’s determination is final and not appealable.

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Restrictions

Business Premises Relocation

A. Delivery, Distribution and Non-Volatile Manufacturing: May relocate to any Community Plan Area (CPA).

B. Retail, Cultivation, and Volatile Manufacturing: ● If the Business Premises location is in a CPA that has not reached Undue Concentration, the Applicant or

Licensee may relocate within the same CPA.

● If the Business Premises location is in a CPA that has reached Undue Concentration, the Applicant or Licensee may only relocate within the same CPA provided the application was submitted when the CPA had not reached Undue Concentration.

● If the application was submitted with a PCN finding from City Council:○ Businesses with a License - may relocate within the same CPA without a new PCN.○ Business without a License - may relocate within the same CPA only if City Council has made a

PCN finding at the new location.

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How to apply for Business Premises Relocation

1. Read and follow DCR procedures in related Bulletin.

2. Submit Application Modification Request and required

documents via Accela.3. Pay related Application Modification Fee.

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Business Premises Relocation Workflow

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Equity Share & Related Requirements

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Overview - Section 104.20

(a) Social Equity Program - Original Eligibility Verification1. Individual Eligibility Verification (Tier 1, Tier 2, Tier 3 criteria and definitions)2. Entity Eligibility Verification (Equity Share and ownership)

(b) Social Equity Program - Expanded Eligibility Verification1. Social Equity Individual Applicant (new criteria and definitions)2. Entity Eligibility Verification (Equity Share and ownership)

(c) Programming - Benefits & Requirements1. Programming Requirements2. Programming Benefits

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Overview - Equity Share

● Unconditional ownership of the Equity Share

● Profits, dividends, and distributions

● Voting rights and control

● Surviving spouse

● Additional Equity Share requirements

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Overview - Equity Share

● All persons applying for Licenses under the SEP are required to comply with the Equity Share requirements in LAMC 104.20 and keep records evidencing their compliance.

● All persons applying for Licenses under the SEP are required to include an addendum in their business operating agreements to evidence compliance with the Equity Share requirements. (LAMC 104.20(a)(2)(iii)).

● All persons applying for Licenses under the SEP are required to provide records evidencing compliance with the Equity Share requirements upon the other party’s reasonable request.

● Notwithstanding, all persons applying for Licenses under the SEP are encouraged to perform their own due diligence and retain their own legal counsel, if needed, to ensure that their rights and responsibilities comply with the Program's requirements at all times.

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Phase 3 Retail Round One

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Overview

● LAMC 104.06.1(b) ● LAMC 104.06(d) allows DCR at its discretion, to issue Temporary

Approval provided certain requirements are met. ● LAMC 104.03(e)(1) allows applicants to request to relocate their Business

Premises.

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Overview

● Prior to January 1, 2020 DCR identified 100 applicants eligible for further processing pursuant to 104.06.01(b)(6).

● These Applications shall not be included in the calculation of Undue Concentration, as defined in Section 104.01 (a)(48)

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Next Steps - Phase 3 Retail Round 1 -Initial 100

● Phase 3 Retail Round 1 - Initial 100○ Respond to site control communication○ Applicants requesting modification must wait to submit modification requests○ Applicants with site control and no other modifications will be provided an opportunity to submit

updated application documents and documents required for temporary approval.○ DCR will review the required TA documents for completeness. ○ DCR will authorize Applicants to apply for State licenses and schedule Applicants for an initial

inspection after all required documents are deemed complete.○ Applicants are eligible to receive TA after DCR inspection, Fire inspection, State licenses, and

Indemnification Agreement. TAs may be issued as early as October 2020. ○ DCR will begin processing P3 modification requests; streamline the modification process

(Accela submissions and approvals)○ DCR will accept Phase 3 annual applications in early 2021.

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Overview

● LAMC 104.06 (b)(7) was added to require an additional 100 applicants, subject to review by DCR, including any applications previously deemed ineligible for the reasons below, from the list published by DCR titled “Phase 3 Retail Round 1 Submissions (09/03/19 10am to 09/17/2019 10am)," dated September 26, 2019.

● Applicants that were deemed ineligible for further processing due to a Community Plan Area having reached Undue Concentration on or after September 3, 2019 or due to sensitive use created by a Phase 3 Retail Round 1 Type 10 Retailer application shall be included in the next 100 Applicants.

● Applications that were deemed eligible for further processing under 104.06.1(b)(6) shall not be included in the calculation of Undue Concentration, as defined in Section 104.01 (a)(48)

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Next Steps - Phase 3 Retail Round 1 -Additional 100

● Phase 3 Retail Round 1 - Additional 100○ Determine eligibility○ Respond to site control communication○ Applicants requesting modification must wait to submit modification requests○ Applicants with site control and no other modifications will be provided an opportunity to

submit updated application documents and documents required for temporary approval. TAs may be issued as early as December 2020.

○ DCR will begin processing P3 modification requests; streamline the modification process (Accela submissions and approvals)

○ Applicants with modifications will be provided an opportunity to submit updated application documents and documents required for temporary approval. TAs may be issued as early as February 2021.

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Next Steps

● Applicants determined eligible for further processing pursuant to 104.06.1(b): ○ DCR will communicate next steps which will require applicants to do the following:

■ Confirm Site Control ➢ Applicants with Site Control will be asked to submit updated/additional

documentation for the Temporary Approval Application process.➢ Applicants without Site Control or Applicants that desire a relocation will

be able to submit their amendment requests at a later date.

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