Before you can start a cannabis business in Los Angeles, it’s important to first understand the regulated market in this City. The Los Angeles Department of Cannabis Regulation (DCR) offers a variety of license types across several activities – retail, delivery, testing, cultivation, manufacturing, and distribution. If you’re passionate about joining the City’s cannabis industry, read on to learn about each license type, what licenses have applications available, and important restrictions.

Retail Storefront (Type 10)

The Retail Storefront license permits the sale of cannabis goods through storefront shops – or what are popularly referred to as “dispensaries.” Storefront retailers may also deliver cannabis goods to individuals. These retailers must be located outside a 700-foot radius of sensitive uses – locations such as schools, public parks, or libraries. This specific license type is limited to certain Social Equity Individual Applicants (SEIA) until December 31, 2025.

Delivery (Type 9)

The Delivery license permits the sale of cannabis goods through delivery service only. This license type is restricted so that in-person, on-site, and off-site kiosk sales for on-site pickup are strictly prohibited. This license type is restricted to SEIAs until December 31, 2025.

Testing Lab

Testing Lab licenses are required to use the State of California Department of Cannabis Control’s (DCC) standardized test methods and operating procedures. Testing labs check for contaminants and label products with accurate amounts of cannabinoids and terpenes before being sold. Applications for testing lab licenses are currently open and available to all.

Cultivation

Cultivation licenses permit the indoor growing and harvesting of cannabis plants. In Los Angeles, outdoor cultivation is prohibited. Though the City offers various indoor cultivation license types, applications are not currently being accepted. This license type is restricted to SEIAs until December 31, 2025.

Manufacturing

Manufacturing licenses permit the extraction of cannabinoids and terpenes from cannabis plants to make products. DCR offers several manufacturing licenses – non-volatile (which includes infusion, packaging, and shared-use), and volatile. Applications for non-volatile manufacturing licenses are open and available to all, while volatile manufacturing licenses are not currently being accepted.

Distribution

The Distribution license permits the transport of cannabis goods between cultivation, manufacturing, and distribution premises. Licensed distributors can also move finished cannabis goods to retail premises, provide storage services to other licensees, and arrange for the testing of productions. Applications for distribution licenses are currently open and available for all.

Microbusiness

The City recently updated language in the Municipal Code to specify a “Microbusiness” as a business that conducts Delivery and Distributor commercial cannabis activities.

License Restrictions and Limitations

As noted above, only verified SEIAs and their associated business entities may apply for Retail Storefront, Delivery, and Cultivation licenses until December 31, 2025. Additionally, DCR cannot issue new licenses to business premises located in areas of Undue Concentration, meaning a Community Plan Area with a higher cannabis license to population ratio than allowed in the Los Angeles Municipal Code. Undue Concentration is based on the American Community Survey, updated annually, and cannot exceed the following:

• Retail Storefront: Ratio of one License per 7,500 residents
• Microbusiness: Ratio of one License per 7,500 residents
• Cultivation: Ratio of one License for every 2,500 square feet of allowable cultivated area
• Manufacturing: Ratio of one License per 7,500 residents

For the purposes of calculating Undue Concentration, “License” includes Pre-Application Records and Annual License Applications. This allows Applicants to more easily verify which areas have become unduly concentrated and avoid submitting Applications in an area with more Applications than available locations.

It’s important to note that in order to participate in the City of Los Angeles’s commercial cannabis industry, both a local AND state license is required. More details on obtaining a state license can be found on the Department of Cannabis Control’s (DCC) website. For questions about applying for a cannabis business in Los Angeles, email cannabis@lacity.org or visit the Access Cannabis website.