Oxnard begins Cannabis Licensing; Retail will be considered in September

Oxford Will Accept Applications for manufacturing, distribution and testing through October 2019

The City of Oxnard began accepting applications for commercial cannabis licensing on 12th August and will continue to accept applications through October 10, 2019. In its first year of licensing, the City will permit twelve (12) licenses: eight (8) manufacturers, three (3) distributors, and one (1) testing lab. As part of the City’s own social equity initiative, the Oxnard Cannabis Equity Program, three (3) of the manufacturing licenses will be reserved to local residents of Oxnard, while the remaining manufacturing licenses will be awarded regardless of residency and income.

Retail Licensing to be considered in September

Legislative changes have steadily progressed in Oxnard since last year. A study conducted in June 2018 by the City’s cannabis consultant, HdL, indicated that the City would be able to support twenty-two (22) retail licenses. These include the licenses that are currently available, plus eight (8) retail and two (2) cultivation licenses. Further analysis into these activities found that cultivation was already over-saturated “3 times over” and retail options would be considered following community engagement. The City’s ordinance concerning manufacturing, distribution and testing was considered by both the Planning Commission and City Council this year, and became effective on 19th July. While Oxnard did not end up drafting regulations allowing cultivation or retail operations, a draft retail cannabis ordinance was open to public comments at a public hearing held by the Planning Commission last week. The City Council will consider the retail ordinance draft in September. Based on the current application guidelines, it is likely that at least two (2) retail licenses will be available to local applications once cannabis retail regulations have passed. Licensing for retailers will only begin once the newly drafted ordinance has been signed by the City Manager in the coming months.

A Legislative Timeline

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Starting the Application Process

To apply for a commercial cannabis license, applicants must first secure a Zoning Verification Letter (ZVL) from the Oxnard Planning Division. In order to determine whether a proposed business is properly zoned, applicants will need to confer with the City’s conceptual zoning map, which outlines prospective areas for each commercial activity. Before submitting an application, a request for Live Scan/Background check must also be completed through the Oxnard Police Department (OPD). The application, associated documents, fees, and determination of eligibility (including ZVL and OPD receipts) must be submitted to the Planning Department on or before 10th October. 

Three Licensing Phases

After the initial phase of licensing passes, there will be three more phases of consideration before licensing is awarded. The second phase is the evaluation of the application which requires an additional fixed fee on top of the submittal fee (together the fees for submittal and preliminary evaluation are about $5,000). Applicants will be evaluated on their business plan, zoning compliance, security procedures, neighborhood compatibility plan, and goals associated with the Oxnard Cannabis Equity Program. Applicants will be ranked based on their evaluation scores, and those that pass will move on to the interview and second ranking phase. 

This phase also involves the Community Benefits Agreement, which should outline specific hiring practices, local investment, and charitable giving. At least half of all employees must be local to Oxnard (except in the case of the single testing lab), and additional training and educational workshops will be open to local residents concerned with cannabis dispensary operations. As with many other local cannabis licensing applications in California, a certain portion of gross revenues is expected to go towards improving the local community. According to the application guidelines, yearly donations of 1% of gross sales should be allotted to help local organizations and nonprofits benefiting the local community of Oxnard. Furthermore, a one-time donation of $25,000 will be set aside by each licensed cannabis business for the Cannabis Community Reinvestment Fund, which is intended to help fund cost barriers to local resident’s entry into the next of cannabis retail dispensary and manufacturing permitting.

About

LME Law is an LA based firm that serves cannabis and CBD brands, investors and operators throughout California. Our blog is dedicated to bringing actionable legal insights about legislative and market developments to this new industry.