“Undue Concentration” for L.A. Marijuana Cultivation

Marijuana Cultivation Los Angeles
It’s no easy calculation in Los Angeles when it comes to cannabis cultivation.

When the City of Los Angeles passed its ordinances allowing commercial cannabis businesses, the City placed limits on the total amount of licenses available in each community for each license category, based on “undue concentration.” The City made it easy to understand the “soft caps” for most of the licensing categories. For each neighborhood’s retailers (Type 10), microbusinesses (Type 12), and manufactures (Type 7) –the ratio is one license per 10,000, 7,500, and 7,500 residents, respectively. The City has even provided the exact number of licenses available on its Commercial Cannabis License Capacity Chart (“License Capacity Chart”), here.

However, the cultivation license limits are more difficult to understand. Here is how the city defines cultivation limits for Undue Concentration:

a ratio of 1 square foot of cultivated area for every 350 square feet of land zoned M1, M2, M3, MR1, and MR2 with a maximum aggregate of 100,000 square feet of cultivated area and a maximum aggregate number of 15 Licenses at a ratio of one License for every 2,500 square feet of allowable cultivated area for Cultivation (Types 1A, 1C, 2A, 3A, 4 and 5A).

After careful examination of this definition, here’s what we think the City means to do with undue concentration and available plant canopy:

On the License Capacity Chart, if you take the Total Square Feet of a given neighborhood and divide that number by 350 square feet, the result is the listed as “Cultivation + Microbusiness (with cultivation)”. For example, Harbor Gateway has 43,982,470 total square feet, which means that Harbor Gateway has about 125,664 total square feet of eligible canopy (43,982,470/350=125,664).

There can also only be 1 license for every 2,500 square feet of allowable cultivated area. Sticking with the Harbor Gateway example, 125,664 eligible square feet divided by 2,500 equals 50 potential licenses, max. However, that number assumes that all licensees will have grows no larger than 2,500 square feet, which probably isn’t the case. To that end, the City informs us that cultivation licenses will be processed on a first come, first serve basis.

The rules also stipulate a maximum of 100,000 square feet and a maximum of 15 licenses, but it is unclear whether these maximums apply to the neighborhood as a whole or to the individual licensee (who could stack up small cultivation licenses to secure 100,000 feet of canopy in aggregate). However, the initial total calculation of the eligible canopy area would be irrelevant for multiple communities if there was a maximum of 100,000 square feet total for that community. Therefore, we can assume that the 100,000 square feet should be applied per individual license, with no one person or entity holding more than 15 cultivation licenses within a given community.

All of that said, the key question remains: How many square feet can I apply for in my application? The ultimate answer is that “it depends.” No matter how much available canopy space there is in a community, the situation depends on factors like how many people apply for cultivation space, how much space each person applies for, how much space the City will grant, etc. We do know that as the City of Los Angeles grants licenses, the Undue Concentration license soft caps will become clearer.

For now, here’s a chart (with approximate numbers) to summarize how many licenses per community we will most likely see:

Community Plan Area Square Feet of Canopy Maximum Amount of Licenses (Actual*) Average Canopy Space**

(sq. ft.)

Arleta – Pacoima 63,309 15 (25) 4,220
Bel Air – Beverly Crest N/A 0 0
Boyle Heights 97,034 15 (38) 6,468
Brentwood – Pacific Palisades N/A 0 0
Canoga Park – Winnetka – Woodland Hills – West Hills 22,392 8 2,799
Central City 72,563 15 (29) 4,837
Central City North 98,647 15 (39) 6,576
Chatsworth – Porter Ranch 169,165 15 (67) 11,277
Encino – Tarzana 2,422 1 2,422
Granada Hills – Knollwood 48,254 15 (19) 3,216
Harbor Gateway 125,664 15 (50) 8,377
Hollywood 20,825 8 2,603
LAX N/A 0 0
Mission Hills – Panorama City – North Hills 38,553 15 2,570
North Hollywood – Valley Village 47,735 15 (19) 3,182
Northeast Los Angeles 100,725 15 (40) 6,715
Northridge 18,331 7 2,618
Palms – Mar Vista – Del Rey 33,528 13 2,579
Port of Los Angeles N/A 0 0
Reseda – West Van Nuys 127,800 15 (51) 8,520
San Pedro 29,633 11 2,693
Sherman Oaks – Studio City – Toluca Lake – Cahuenga Pass 4,807 1 4,807
Silver Lake – Echo Park – Elysian Valley 3,028 1 3,028
South Los Angeles 16,453 6 2,742
Southeast Los Angeles 168,657 15 (67) 11,243
Sun Valley – La Tuna Canyon 222,321 15 (88) 14,821
Sunland – Tujunga – Lake View Terrace – Shadow Hills – East LA Tuna Canyon 2,291 1 2,291
Sylmar 66,600 15 (26) 4,440
Van Nuys – North Sherman Oaks 62,941 15 (25) 4,196
Venice 4,955 1 4,955
West Adams – Baldwin Hills – Lelmert 13,477 5 2,695
West Los Angeles 26,300 10 2,630
Westchester – Playa del Rey 34,770 13 2,674
Westlake 1,560 1 1,560
Westwood N/A 0 0
Wilmington – Harbor City 248,428 15 (99) 16,561
Wilshire 4,284 1 4,284

*Actual maximum amount of licenses available if the City does not cap at 15 licenses.

**Average canopy space assumes that City will allow the maximum amount of licenses, and that each applicant will apply for an equal amount of canopy space.

© 2018 Canna Law Group, a practice of Harris Bricken.

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