Greetings!

As DCR wraps up 2024, it is a good time to reflect on the state of the cannabis industry locally and across the nation. DCR takes the pulse of the industry in planning for 2025 and beyond. In this issue, DCR takes a look at notable moments throughout this year. 2024 was a turning point in the cannabis industry.

I would like to take a moment to thank stakeholders, elected officials and Angelenos for their attention to and support of legal, local businesses that uplift the greater community. Lastly, thank you to the Cannabis Regulation Commission for their work on reviewing and deciding on Annual License applications.

In early 2025, DCR plans to release its 2024 Annual Report, highlighting the impacts of the cannabis businesses in the City of Los Angeles.

DCR wishes all a very wonderful holiday season filled with warmth and surrounded by loved ones.

Sincerely,

Michelle Garakian
Executive Director
Department of Cannabis Regulation

It’s been a busy year for the cannabis industry! From major legislative updates to emergency bans, here are some of the most notable cannabis news from 2024.

• DEA Rescheduling: On May 21, 2024, the DEA issued a notice of proposed rulemaking to reclassify cannabis from a Schedule I to a Schedule III drug under the Controlled Substances Act (CSA). A hearing is planned for early 2025.
• Cannabis Cafes: The widely debated “cannabis cafes” bill (AB-1775) was signed by Governor Newsom and will take effect on January 1, 2025. This new legislation will allow retailers – where local law permits consumption lounges – to sell non-cannabis-infused food, nonalcoholic beverages, and tickets to live performances at their establishments. See more about consumption lounges later in this issue.
• Emergency Hemp Ban: Newsom’s emergency hemp regulations took effect in September, prohibiting the consumption and sale of hemp-derived products to individuals under 21 and requiring sellers to remove any hemp products meant for consumption that contain detectable amounts of THC from their shelves.
• Illegal Cannabis Seizures: Since January 2024, California has seized more than $191 million worth of illegal cannabis.

DCR thanks all licensees that have paid their 2025 Annual License Renewal fees in a timely manner. For those that have yet to do so, DCR is deferring renewal fees to Tuesday, December 31, 2024. This will be the final deferral for 2025 renewals! All 2024 records will expire after 11:59 p.m. on Tuesday, December 31, 2024. All persons who have allowed their license(s) to expire and who continue to engage in Commercial Cannabis Activity are subject to an enforcement action and/or criminal penalties for unlicensed Commercial Cannabis Activity.

PLEASE NOTE: Applicants and Licensees who do not pay their deferred Annual License Application fees will not be allowed to refile.

Click here to watch Assistant Executive Director Jason Killeen review the renewal process and here for a step-by-step guide on how to renew.

For more information, please click here.

The California Environmental Quality Act (CEQA) requires California public agencies to consider potential environmental impacts from new projects and businesses. All California public agencies, including the Department of Cannabis Regulation (DCR), must comply with CEQA and verify that all licensed cannabis businesses meet its requirements.

DCR Process

DCR first determines if a potential new cannabis business is exempt from CEQA, meaning the business, as described, falls into a legally defined CEQA exemption. If the business is not exempt from CEQA, DCR must then evaluate whether the business has any possible significant environmental effect under the law. If the business is not exempt and has any possible significant effect on the environment under the law, the Department must prepare an initial study to further determine if the project could have significant environmental effects. After the initial study, DCR will prepare an Environmental Impact Report for projects that may have significant environmental impacts or, in the alternative, DCR will prepare a Negative Declaration for projects that are determined to have no significant impact.

CEQA and Cannabis Annual License Applications

Cannabis businesses that have been doing business under Temporary Approval are now applying for Annual Licenses, a more permanent licensing process, that requires businesses to satisfy CEQA requirements.

From earlier this year to date, 264 Annual License Applications for the retail storefront activity have been approved by the Cannabis Regulation Commission and have met the CEQA requirements. DCR prioritized these applications in 2024 and will continue this process for retail storefront applications for the next few months.

Non-retail Annual License Applications are now the priority and DCR will process those on a rolling basis with the State Provisional License expiration dates driving how DCR prioritizes processing the applications and CEQA documentation. DCR is well aware of State provisional license expiration dates for each record and is currently working through the list of applicants with non-retail activities and prioritizing based on the expiration of the State Provisional license. Please be assured that each record is in DCR’s pipeline and we are working to provide all necessary documentation to the State for your license in advance of your State provisional license expiration date.

For additional information on CEQA can be found here.

While the “cannabis cafes” bill (AB-1775) was signed by Governor Newsom and takes effect on January 1, 2025, many have asked what that means for cities like the City of Los Angeles. Some local businesses are eager to set up their lounges, but a few things need to happen first.

The new legislation does allow retailers to sell non-cannabis-infused food, nonalcoholic beverages, and tickets to live performances at their establishments, but each city must decide if cannabis lounges work within the context of their respective community, what laws and infrastructure are needed to manage their existence.

DCR will keep stakeholders and Angelenos apprised of any updates.

After January 1, 2025, the Department of Cannabis Control (DCC) will no longer renew provisional licenses for non social equity applicants. If your provisional license expires in 2025, you must transition to an annual license before you will be eligible to renew. For more information, click here.

Are you waiting to pay a cannabis business fee but don’t see your invoice in DCR’s licensing portal? Here’s how to pull one up.

1. Login to your Accela portal.
2. Click on "My Records," then click on the associated Record Number.
3. From there, hover over the "Record Info" drop down and click on "Attachments."
4. There you will find any documents, such as this invoice, uploaded to your record.