The cannabis industry is growing in Los Angeles County. With the introduction of retail cannabis, new opportunities emerged for dispensaries and retailers. When opening a new dispensary or marijuana related business, you are likely to face a few challenges. One of these challenges is passing through the maze of bureaucracy to secure your permit.
Our clients often ask how they can work with local government to start a cannabis related business in cities where none exist. Usually these cities are in the process of forming local regulations and there is not a clear path for the new business.
Although Proposition 64 passed November 2016, many counties in Los Angeles have not yet settled on local regulations. LA county boasts 88 cities. Nine counties established their permit granting system and six counties offer limited permits. That just scratches the surface.
63 LA cities banned retail cannabis, while others are still on the fence. Uncharted territory still exists. Ten cities have nothing on the books. This means these cities have not come out either for or against local retail. These cities offer great opportunity and great risk for new business.
These uncharted cities represent 7% of the population in LA county, they include:
How To Start A Cannabis Business In Los Angeles County Markets That Are Not Yet Open
Keep in mind that opening a retail cannabis dispensary is not for the faint-of-heart. You are a pioneer in an emerging, yet controversial industry. You set the pace in building the industry’s reputation.
You face challenges if you want to open a cannabis business in one of the cities with no laws on the books. You are traveling without a map and aiming for an ever moving target.
“The fact that there’s a moving target at the state level makes it way more challenging for folks to develop thoughtful, comprehensive, local ordinances,” according to an article published in KQED News
Local governments have some freedom in regards to cannabis zoning laws and business licensing, according to the California State Association of Counties.
“Proposition 64 allows local governments to regulate nonmedical cannabis businesses through
zoning and other laws, such as requiring businesses to obtain local permits or
licenses in addition to state licenses.
Since so much is up to the discretion of local government officials, it is even more important that cannabis entrepreneurs represent the industry well. We compiled tips to help.
1. Maintain a Professional Approach and Appearance
First, always strive to present yourself and the industry in a competent and professional manner. You may find you see better results when you appear competent, responsible, and trustworthy. This is especially true when you represent an industry that is unfamiliar to many decision makers and citizens.
"Look like an entrepreneur. I try to dress like an entrepreneur. I don’t want to be associated with a traditional cannabis-stoner business owner, because that is all that the mainstream public has seen." 5 Tips for Breaking Into the 'Budding' Marijuana Industry, Entrepreneur
The officials in the undecided counties may have concerns about the industry. It is up to you to address these concerns and persuade these officials that your dispensary will not create public nuisance or public safety hazards.
2. Do Your Homework and Research Your Potential City
Call to enquire about current and new policies
Retail cannabis laws are a work in progress. Reach out to the officials in your chosen city to learn up-to-date information. Do your homework before you make the call. Inform yourself on the industry throughout the state and about the unique culture of the city.
Before you reach out, educate educate yourself on state laws, federal laws, and best practices from other cities and in states like Colorado, Oregon, Washington, and Nevada. Look up data on public sentiment from research institutions like the Pew Research Center and other credible think tanks. The more information you have going in, the more likely decision makers are to listen to you. They may even appreciate your expertise.
"At any level of government, public officials who regulate marijuana are likely to find themselves trying to answer questions about numbers they may or may not have — has driving under the influence increased or decreased since marijuana became legal? Have crime patterns changed? How much money is coming into public coffers, and is it growing?" - Government Technology Magazine
Build relationships with decision makers and influencers
In any business, relationships are essential. This is even more true in a new industry. Build relationships in the local government, local business scene, and in the industry throughout the country. Be known as someone with integrity as this will make it easier to establish your dispensary.
Research the city council. Have any of the current council members taken a stand on retail cannabis? Which members may pose an obstacle? Which members may be open to learning more about the industry? Reach out to any sympathetic council members.
Sometimes people ask us how they should approach city council members for outreach. Every modern city lists city council members on the city website. Usually the listing includes email addresses, office telephone numbers, or even Twitter or other social media handles.
Four Questions To Ask When You Reach Out
When you reach out to government offices, licensing bodies, and city councilors ask a few key questions. These questions are just a starting point, they will help you determine how open they are to the cannabis industry.
Tips for a persuasive proposal:
Four Topics to Address in Your Proposal
While not specific to the cannabis industry, the citizen advocacy organization Citizens.org compiled a simple guide to reaching out to city council members.
Please keep in mind that local government planning divisions typically require their own permit application forms. The proposal described supports your case as you meet and talk with local city council members, planning commissioners, and city staff.
Be a visible advocate and resourceAttend city council meetings and pitch your proposal at the appropriate time. Listen carefully to any discussions and offer yourself as a resource to answer questions about the industry and to clarify any misconceptions. You may find more success if you avoid using drug culture related jargon, instead use general and business related language.
How To Choose A Potential Location in LA County For Your Cannabis Business
In many ways, choosing a location for a successful dispensary is similar to choosing the right location for any retail business.
“For starters, planting seeds in the cannabis economy with a retail outlet takes retail business know-how.” - - Entrepreneur article “How to Plant the Seeds of Success in the New Cannabis Economy.”
Starting any new business is risky. Cannabis related businesses have the advantage of being in an emerging growth market. However, according to the Small Business Administration (SBA) around half of all new small businesses survive the first five years of operation.
Like any retailer, there are five questions to ask when choosing a potential location:
Those questions specifically address retail establishments, similar questions apply to any cannabis related business. A cannabis retailer has an added challenge as it is difficult to research market demand for a product that was previously illegal. The process is similar to researching the interest in a new invention or brand new product.
You may also want to look at the city’s history with cannabis issues. You may want to research answers to these four questions:
Establishing a new business is always a challenge. It is even more challenging when you are also helping establish a new industry!