MMLG’s Phase 3 Cannabis Workshop
Disclaimer The materials available at this presentation are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any issue or problem. Use of and access to this material contained within this presentation do not create an attorney-client relationship between MMLG and you. The opinions expressed in this presentation are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.
Overview • Social Equity Applicant Qualifications • Round 1 of Phase 3 • Round 2 of Phase 3 • Delivery for Phase 3
Social Equity Applicant Qualifications • Relevant to applicants applying in Round 1, Round 2, and Delivery as part of Phase 3. • All Tier 1 and Tier 2 Social Equity Applicants need to be pre-vetted by the DCR to qualify and apply as part of the initial stages in Phase 3. • On May 28, 2019 the Department of Cannabis Regulation (DCR) began the Social Equity Program Eligibility Verification Registration process, which will remain open for 60 days until July 29, 2019 at 4 p.m.
Who Qualifies as a Tier 1 Social Equity Applicant? • 51% Ownership; AND • Low Income and Prior California Cannabis Arrest or Conviction; or • Low Income and Minimum 5 years Cumulative Residency in Disproportionately Impacted Area.
Who Qualifies as a Tier 2 Social Equity Applicant? • 33.33% Ownership; AND • Low Income and Minimum 5 years Cumulative Residency in Disproportionately Impacted Area; or • Minimum 10 years Cumulative Residency in Disproportionately Impacted Area.
Definition: Low Income • Means 80 percent or below of Area Median Income for the City based on the 2016 American Community Survey and updated with each decennial census • Gross or total income in 2017 or 2018 was $45,644 or less
Definition: California Cannabis Arrest or Conviction • Means an arrest or conviction in California for any crime under the laws of the State of California or the United States relating to the sale, possession, use, manufacture, or cultivation of Cannabis that occurred prior to November 8, 2016. • Prop. D arrest, prosecution, or conviction does not qualify.
Definition: Disproportionately Impacted Area • Means eligible zip codes based on the "More Inclusive Option" as described on page 23 of the "Cannabis Social Equity Analysis Report" commissioned by the City in 2017, and referenced in Regulation No. 13 of the Rules and Regulations, or as established using similar criteria in an analysis provided by an Applicant for an area outside of the City • The Report identified the following zip codes as DIAs: 90001, 90002, 90003, 90008, 90011, 90013, 90014, 90016, 90021, 90027, 90033, 90037, 90043, 90044, 90057, 90058, 90059, 90061, 90062
Phase 3: Round 1
Phase 3: Round 1 • DCR says it will open on September 3, 2019. • Will remain open for 14 calendar days. • Must have an Owner that is a Tier 1 or Tier 2 Social Equity Applicant. • 100 Retail Licenses Available: • 75 to Tier 1 Social Equity Applicants; and • 25 to Tier 2 Social Equity Applicants.
Round 1 Submission • Includes the following: • Social Equity Applicant must be pre-verified; • Executed Lease or Property Deed; • Ownership and Financial Interest Holder Form (DCR Form); • Financial Form; • Investments • Loans • Bank Accounts • Gifts • Business Premises Diagram; • Proposed Staffing Plan; • Proposed Security Plan; • Dated Radius Map; • Labor Peace Agreement Attestation; • Indemnification Agreement; and • Business Records and Agreements.
Location Restrictions and Undue Concentration • Correct zoning. • 700-foot radius from another storefront retailer or microbusiness with storefront retail. • 700-foot radius from a school, public park, public library, alcoholism or drug abuse recovery or treatment facility, day care center, and permanent supportive housing. • Not subject to finding of undue concentration.
Phase 3: Round 2
Phase 3: Round 2 • Open date TBD. • Initial submission will be open for 30 calendar days. • Secondary submission will be open for 90 days. • Must have an Owner that is a Tier 1 or Tier 2 Social Equity Applicant. • 150 retail licenses available to Tier 1 OR Tier 2 Social Equity Applicants.
Round 2 Submission A • Submission A will be open for 30 Days • Includes the following: • Social Equity Applicant must be pre-verified; • Financial Form; • Investments • Loans • Bank Accounts • Gifts • Labor Peace Agreement Attestation; and • Indemnification Agreement.
Round 2 Submission B • If the Applicant is one of the first 150 to apply in Round 2 they will move on to Submission B. • Submission B Will Be Open for 90 Days. • Includes the following: • Executed Lease or Property Deed; • Business Premises Diagram; • Proposed Staffing Plan; • Proposed Security Plan; • Dated Radius Map; • Ownership and Financial Interest Holder Form (DCR Form); and • Business Records and Agreements.
Delivery for Phase 3 • Open Date TBD. • Submission Window TBD. • Delivery Pilot Program. • Priority for unsuccessful applications from Rounds 1 & 2. • Adding delivery for Phase 2 Applicants with annual application.
Delivery Submission • Includes the following: • Executed Lease or Property Deed; • Business Premises Diagram; • Proposed Staffing Plan; • Proposed Security Plan; • Dated Radius Map; • Indemnification Agreement; • Current Certificate of Occupancy; and • Business Records and Agreements.
Delivery Pilot Program • First 60 Delivery Applications: • 40 for Tiers 1 & 2 Social Equity Applicants; and • 20 for General Applicants. • Unsuccessful applications from Rounds 1 & 2 are ineligible for Pilot Program. • Phase 2 Applicants are ineligible for Pilot Program.
Challenges • Undue concentration limits; • Race to the window; • Competition; and • Choose your partners carefully.
Are You Prepared? Aaron Lachant Josh Singer Director of Licensing CEO alachant@mmlg.com jsinger@mmlg.com MMLG www.mmlg.com 1100 Glendon Ave, 15 th Floor Los Angeles, CA 90024 310.449.4528
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