Greetings!
As 4/20 celebrations continue, I am pleased to announce the 2025 Phase 3 Retail Round 3 Application Lottery will occur in early December 2025. DCR continues to review the recent 2025 requests for Social Equity Individual Applicant (SEIA). The 2025 SEIAs and the more than 1,900 SEIAs verified in 2019 and 2022 may register for the 2025 retail application lottery from Tuesday, September 9, 2025 to Tuesday, September 16, 2025. The lottery will allow randomly selected SEIAs an opportunity to apply for a commercial cannabis retail license in the City of Los Angeles, the largest cannabis market in the country. The last retail application lottery occurred in 2022. To learn more about the 2025 retail application lottery, keep reading this bulletin.
In the past, DCR has reached out to cannabis businesses to ask them to share with us good news about their cannabis business openings or other important milestones. This month, the News Bulletin features Social Equity owner of Pauwels Cannabis Co., David Pauwels, who opened his retail store earlier this year. Read more about his journey below. DCR congratulates Pauwels on this accomplishment.
I am also happy to report that DCR is going online for payments. During this roll out, beginning on Monday, April 28th, certain fee types can be paid online. DCR hopes to expand this service in the future. You can read more about it later in this publication.
Finally, today, DCR launched its revamped website, published updated Rules and Regulations, as well as gave its licensing portal a facelift. Things have moved around a bit between the two online sites. So please take a look at the DCR website and Licensing portal when you have a moment. Reach out to DCR should you have any questions or require assistance.
We hope our of-age Angelenos had a happy and safe 4/20!
Best,
Jason Killeen
Acting Executive Director
In early December 2025, DCR will host the 2025 Phase 3 Retail Round 3 Retail Application Lottery for Social Equity Individual Applicants (SEIAs). Retail storefront applications are limited to SEIAs as stipulated by municipal code through December 2025.
Since earlier this year, DCR has begun laying the groundwork for a successful lottery by conducting its third window for Social Equity Individual Application Verification. DCR received 49 verification requests and is currently processing and reviewing those submittals. Those individuals who are approved will join the more than 1,900 current SEIAs that are able to access Social Equity Programs and participate in the 2025 Phase 3 Retail Round 3 Retail Application Lottery.
Prior to the 2025 Retail Application lottery, DCR will hold a registration period for those eligible to submit their intent to participate in the lottery. Those that qualify may register to participate from Tuesday, September 9, 2025 to Tuesday, September 16, 2025.
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- Click here for lottery details!
DCR plans to hold three separate lotteries in early December 2025, one for each of the SEIA Verification rounds that took place in 2019, 2022 and this year. The number of retail license opportunities allotted for each group will be based on the number of SEIAs that register for the lottery in each verification round. The intent is to make the odds of selection equal for each lottery pool.
Once selected, SEIAs will have three years from the date of the lottery to submit a retail storefront application. After this 2025 Retail Storefront Application Lottery, it is expected that all retail storefront licenses opportunities will be exhausted.
When all retail licenses are issued, it is expected that 75% of retail licensees will be social equity.
In 2023, the DCR News Bulletin featured David Pauwels, his cannabis manufacturing company, and the story of how his passion for cannabis began with his dad. Though his journey included a cannabis arrest while working at a gray market cannabis store, he was undeterred and successfully started a legal business - Pauwels Cannabis Cosmetics, makers of a topical cream. Yet, he always had plans for more, including opening a retail store and a cannabis waste paper company.
Fast forward to today and Pauwels is excited to give visitors a tour of his brand new retail store in the Beverly Grove community of Los Angeles.
“Welcome to the store!” he said with arms outstretched and a beaming smile.
Opened earlier this year, Pauwels Cannabis Co, 506 S. San Vicente Blvd, Los Angeles, operates out of a former drapery company, but now instead of fabric samples, his store’s shelving displays pre-rolls, edibles, flower, and his cosmetic cream, among other products.
Since it took about two years for Pauwels to get his retail store license, he admits the launch of the store had bumps along the way. The original location that he planned wasn’t allowed. Pauwel has advice for others going through the process of building a business: “Sometimes the first deal is not the best deal,” said Pauwels. “Sometimes you rush things. I had a spot that was going to be more like in the mid-cities area. Parking there was going to be an issue. But I just wanted to get into it because I had a partner [to report to]. But it wasn’t going to work because it was 15 feet too close to a private school.”
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- Find out more about Pauwels’ story here.
So his ongoing search for another location found a spot Pauwels said works better. The location is near a hotel which brings in tourists, and a hospital that brings in patients and staff, and his store is also on a busy street and has parking. Pauwels notes that although he advertised the official business launch on a Friday, the day prior, a Thursday, he was already getting walk-in customers.
“I am really happy with our growth organically,” he said.
Pauwels said that sales have increased incrementally month after month. His strategy from the beginning was to start small with inventory, take the pulse of the business, and then make future buying and business decisions on the data he collects over the first few months.
Nineveh Andersen, business partner and wife of David Pauwels, checks inventory at the shop the two worked hard to get up and running. 
Additionally, he has always relied heavily on his staff for guidance. In selecting products to sell, Pauwels has chosen to support small businesses who he thinks can better focus their products to specific tastes, niche strains, and overall product quality.
“In the cannabis industry, there are a lot of diamonds in the rough that people just don’t know,” said Pauwels regarding the small businesses and their products. “Those businesses don’t have the money behind them [for marketing]. When I meet the farmer and I see, yeah, wow, this guy is still the owner and he still has control and influence, that’s when I am more likely to want their brand on my shelves.”
Referring to his team, he said, “We all have so much experience. I get everyone’s feedback. It’s really important to have a team. This is not a one man band.”
He adds, “I am very happy that I took advantage of all the little perks that the Social Equity Program has,” Pauwels said. “The Pro Bono Program [legal assistance program] that [DCR] has, gave me a lot of relief.”
“You always wish that you can do it on your own,” he said, referring to potential investor partnerships. “But you need a little help. That’s the tricky part. Sometimes it’s better to take a little bit of time than just to rush into something just because it’s there.”
The team, both past and present, are important to him. Pauwels’ store includes a memorial dedicated to one of his first business partners who died unexpectedly a couple of years back. He also has a wooden sculpture handmade by a customer and friend. That sculpture came from the cannabis store he managed when he was arrested. Both give meaning to the shop and to Pauwels’ purpose and drive to getting it right.
Pauwels is still working on the finishing touches to his shop. Permanent outdoor signage is still to come. Additional storage cabinets and shelves behind the counter are next. For Pauwels, slow and steady wins the race.
“I am very happy with what we did with really very little budget,” he said. “We had to learn to tread very lightly. So what I learned, right now, if you are going to survive the next couple of years [as a business] you don’t want to go biting off more than you can chew. Build organically.”
“So instead of going ‘hey, we need $100,000 worth of inventory’ just say, ‘no, you’re just opening.’ It took us two or three weeks before we started buying anything. We had a list on the board and we were going over everything, discussing price points. We got everyone’s opinion. We did a lot of troubleshooting. And talking about our experiences with the product. We learned to trust the team. It’s slowly, but surely. We are just thinking about this one store, not expanding to five or six.”
As for what’s next, he still hasn’t lost sight of starting a paper company using cannabis waste leftover from the manufacturing process.
“That’s the ultimate goal,” Pauwels said.
DCR congratulates Pauwels Cannabis Co. on their opening and wishes the store many years of success. You can visit his store located at 506 S. San Vicente Blvd, Los Angeles.
DCR and the City’s Office of Finance have joined forces to bring an electronic payment option for applicants/licensees. The service called “Cannabis Billpay” is available on the Office of Finance website and will function similarly to their already existing "Online Bill Pay" e-payment system where businesses can pay their taxes.
The Cannabis Billpay system will allow applicants to pay "initial" DCR fees. Generally, the Legal Business Entity Record, Pre-Application, and Annual License Application fees are available to be paid through Cannabis Billpay (see the table below for the full list).
- NOTE: If your invoice includes additional fees such as an Equity Share Review, Expedited Services, Environmental Review Request, etc. along with the fees listed below, you will NOT be able to pay the fees through Cannabis Billpay.
Applicants/Licensees will be able to begin paying invoices through Cannabis Billpay for records created on Monday, April 28th. All Applicants and Licensees with invoices made available through Cannabis Billpay must wait until the following day before submitting payment. .
- NOTE: If your invoice was created before April 28th, you will not be able to use Cannabis Billpay to pay your invoice.
In the future, DCR has plans to expand the list of fees that applicants/licensees can pay through Cannabis Billpay to include renewals, modifications, and compliance/enforcement related fees.
Fee Name | Fee Amount | Fee Code |
Pre-Application Review | $597.00 | J102 |
Legal Business Entity Record | $1,997.00 | J103 |
Annual License Application - Retail Storefront (Type 10) | $7,691.00 | J001 |
Annual License Application - Delivery (Type 9 or Type 12) | $7,691.00 | J003 |
Annual License Application - Distributor or Transport Only | $7,691.00 | J004 |
Annual License Application - Cultivation Nursery or Processor | $7,691.00 | J005 |
Annual License Application - Cultivation | $7,691.00 | J006 |
Annual License Application - Manufacturer Level 1 | $7,691.00 | J009 |
Annual License Application - Testing | $7,691.00 | J040 |
In order to use Cannabis Billpay, applicants will need a valid Business Tax Registration Certificate number and an active Accela Invoice number. DCR invoices that are past due will not be accepted by the Cannabis Billpay system.
Users will be asked to enter their name, phone number, and email before proceeding to the payment options. There are three different payment options: 1) Debit Card, 2) Credit Card, and 3) Bank Account / eCheck. Debit and credit cards are subject to a service fee which will be shown in Cannabis Billpay.
Here are some things to know:
- Payments reversed for any reason will incur a $35 reversed payment processing fee (invoiced and collected by the Office of Finance). Additionally, applicants/licensees who have a payment reversed will not be eligible to pay for the same invoice / fees through Cannabis Billpay.
- If the fee code being paid has previously been assessed / paid by the applicant on their LATAX account, you will be unable to pay through Cannabis Billpay.
- For example: If the LATAX account previously paid for a pre-application fee, then received a new invoice for a new pre-application fee under the same LATAX account, they would not be able to pay via Cannabis Billpay.
- In the scenarios above, applicants/licensees will need to use other payment methods available such as Office of Finance Mailed In Payments, Office of Finance In Person Appointments, or LADBS Development Services Centers.
For any questions regarding this new payment option, please email DCR.Payments@lacity.org.
Updated DCR Rules and Regulations
DCR updated its Rules and Regulations, effective 4/18/2025. You can review the updated document here.
Due to recent changes implemented by the Los Angeles City Council, please note that May 1, 2025, will be the last CRC meeting where individuals will have the option to address the Commission virtually. All future CRC meetings, beginning on May 15, 2025, will not include a virtual participation option, therefore, individuals interested in providing public comment will have to attend CRC meetings in person.
CRC meetings will continue to be livestreamed here. For more information on the schedule and location of these meetings, please click here.
Next DCR Q&A Virtual Lunch is at noon, Wednesday, April 23, 2025. RSVP, submit questions and join here.
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