Issues in Los Angeles’s Cannabis Industry

Learn about some of the issues that many California entrepreneurs are facing in the cannabis industry.

As California’s cannabis market continues to expand, industry professionals are facing two major challenges: difficulties in securing business permits in the city of Los Angeles, and an increasing number of trademark and intellectual property lawsuits. As LA is expected to be one of the largest cannabis markets in the U.S., many are monitoring these evolving issues as they have the potential to set precedents for the rest of the nation. Here is a closer look at these issues that many California entrepreneurs are facing in the cannabis industry.

Marijuana Business Licensing Delays

While city officials have granted approximately 170 licenses to marijuana retailers, they have failed to award any licenses to cannabis farmers, producers, manufacturers, distributors, quality control test labs, or any others. According to the Los Angeles Department of Cannabis Regulation (DCR), the city has received nearly 600 business permit applications during the second round of licensing. Of these, 334 have paid application fees and are being processed while 11 were granted temporary approval. However, with no official business licenses being awarded, this is a major problem for those in the industry. This is because the timing of licensing is very important. If businesses are not granted a temporary license before the end of the year, they may be forced to apply for a full annual license. Experts point out that the process for securing an annual license is far more complicated and time-consuming than the temporary licensing process. So, this hold up in Round 2 licensing is creating a worrying logjam for those who are looking to continue in the cannabis industry.

Increasing Litigation

Another major problem is the increasing number of lawsuits between competitors in the industry. As the industry continues to grow and competition becomes fiercer, experts expect to see the number of trademark and branding lawsuits abound. This problem highlights the shift in the cannabis industry from an outlying sector to a highly regulated industry governed by courts and lawmakers. Those who are interested in getting involved in the cannabis industry are going to need legal advice to help them navigate the increasingly contentious waters.

These are some of the issues that many California entrepreneurs are facing in the cannabis industry. Do you have questions regarding your cannabis real estate needs? If so, contact the experts at California Commercial Realty Advisors, Inc. We are ready to assist you with all your industrial and commercial real estate needs today.

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