420 FILE-All I want for Christmas is the Los Angeles Department of Cannabis Regulation to issue the “social equity” retail storefront licenses to those invoiced applicants who have been patiently waiting over 423 days and counting.
However, it's merely wishful thinking as 80% of the LA marijuana market continues to remain illicit and there are no signs of licenses being issued in the imminent future.
Therefore, instead of getting a lump of coal in your stocking, buying a cannabis license on the secondary market may be a smart solution to the licensing conundrum.
On the secondary market, the license is an existing asset of a corporation or LLC and compliant zoned real estate is part of the deal. Raising capital is less challenging because investors know it's a “sure thing” rather than a gamble.
Spending $250,000 or more on rent pursuing the license then losing the property is devastating. The operator must start anew, find a compliant zoned location in the same community plan, expend additional capital on acquisition costs and continue to wait some more for the licensing process to play out.
Cities like Stanton and Tracy should be applauded for their enlightened approach to licensing and not requiring real estate at the time of application submission.
(Gary Mittin is a commercial real estate broker, specializing in cannabis real estate.) Photo: Esty. Prepped for CityWatch by Linda Abrams.