LA Phase 3 Cannabis Licensing - March 8th City Council Update

LA Phase 3 Cannabis Licensing - March 8th City Council Update

On Friday, the City Council instructed the City Attorney to draft an ordinance to amend the commercial cannabis procedures for Phase 3 in Los Angeles. The changes recommended at the March 5th Rules Committee meeting will be presented in this new ordinance for voting before the Council. To recap, under the most recent proposal:

  • The first 100 retail storefront licenses will have 75 licenses reserved for Tier 1 social equity applicants who own a 51% or more equity stake in their business (overview of the criteria for Tier 1 and Tier 2 social equity here).

  • The second 100 retail licenses will go to Tier 1 (51%+ ownership) & Tier 2 (33.33%+ ownership) social equity applicants.

  • No discussion of when Phase 3 retail storefront licensing would start for General Applicants.

  • A delivery pilot program will begin at some time and will issue 40 licenses to social equity applicants and 20 licenses to general applicants. Phase 2 operators are no longer precluded from applying to add delivery to their existing operations.

  • Social Equity applicants will have 90 days to secure a lease on a compliant property from when they submit an application.

No 1(j) - Right of First Refusal

Councilmember Herb Wesson instructed the council to remove section 1(j), which provided a right of first refusal for social equity applicants business partners’ to have the Right of First Refusal to buy their social equity partners’ interest in the business after a period of 3 years. This provision has been removed from the recommended changes.


While exact timing on the passage of the new ordinance has not been determined, and DCR has not given a firm timeframe for Phase 3, certain milestones were presented in the Rules Committee’s recommendations from March 5th, and are outlined below:

Lauren Estevez

Lauren Estevez is an attorney who advises international, multi-state and California cannabis brands, operators, and investors. She is nationally recognized as a subject matter expert in Cannabis Law and her work has been featured on CNBC, Bloomberg Law, and SXSW. The National Law Journal awarded Lauren the recognition of Cannabis Law Trailblazer in 2019. Lauren is the founder of LME Law.