MAY 2020 – To combat upcoming budget deficits and the sluggish rate of both the approval and opening of its originally highest ranking retail and cultivation applicants in 2019, the Riverside County Board of Supervisors voted to remove the limits and the RFP and Ranking requirements, resulting in the largest area in the state with unlimited retail licensing. Be sure to reach out ASAP as there is a practical cap on licenses due to a limited number of parcels that are green-zoned and out of the setbacks.
Right before the cannabis filled Midterm Elections, the County of Riverside, California’s 5th largest county and the closest to the most sought-after markets of Los Angeles and Orange Counties, opened the door on an opportunity for cannabis investment and licensing that may be over before many people even knew it existed.
Green-Zoning the Unincorporated Areas
The county, which controls whether or not and how many cannabis businesses can be allowed on its unincorporated lands, published a Framework (Attachment F) for how its process will work and the dates are very important, as well as the limit as to the number of Retail and Cultivation operations that will be permitted.
Riverside County Opens Up Small Window for Licensed Cannabis Operators Who Act Fast
An unlimited number of manufacturers, distributors and testing labs will be allowed (subject to the typical availability of sites, buildings and willing landlords) but local permission for state licensing will be limited to the highest scoring 19 Retailers and 50 Cultivation applicants who comply with the very strict timeline laid out.
Land is Still Key & The Clock is Ticking
To have a chance to start your cannabis business in these areas, you will have to submit a Pre-Registration Form as Step 1 of the County’s Framework. Failure to file this form will preclude any later involvement in this process. Making this step even that much harder is the very short 14-Day window that you will have to file your form. The window will be opening in early January for Retailers and Cultivators.
As in virtually every other local jurisdiction in California, your right to apply is tied to your acquisition of rights to a specified parcel of land; That is your ticket to this dance. You don’t have to own it and may not be the only applicant for a specific property, but you must have the landlord’s approval to proceed.
So even though no licenses will likely be granted by the state for as long as a year or more, you will be out of the race by mid-January if you do not have land rights negotiated, which could be as little as an option.
If you do not have your land/buildings/parcels identified and negotiated for, you are out of luck. Contact BeGreenLegal for a listing of buildings that may qualify.
Vertical Integration Options Limited & Competition Fierce
Many of the people that reach out to us for help understandably want to operate a multi-operation/license operation, otherwise known as vertically integrated, under the same roof to allow them to pivot as the market needs change and capture more of the total profits. While the County of Riverside has an unlimited number of some of the license types needed for this effort, the most commonly integrated parts of the license and supply chain are limited which tie operators hands tremendously. The front end cultivation and the end of the chain retailing are critical to integration, as the middle roles – manufacturing and distribution – rely on these ends of the cycle.
So effectively, if you are not one of the lucky 19 or 50 chosen applicants at the end of this process, a vertically integrated cannabis operation will be very tough to pull off and will make the ”middle licenses” worth substantially less than others around the state.
Along this line, those looking to do cultivation will also be driving up the pricing on sites and standing buildings that will be able to accommodate more than just growing, but also best able to manufacture and distribute; thereby effectively limiting the real estate options for the uncapped license applicants.
You Already Have Land & Buildings. Now What?
If you are one of the lucky souls that won this cannabis real estate lottery and have the parcel or even better, a building already standing, how do you cash in?
Not so fast. You have to decide if you want to go down the licensing path and secure a golden ticket for yourself or are you going to give another (or more than one) the chance to use your property to apply.
Whomever has the right to apply has a big head start in the race but still plenty of running to do to cross the finish line in the top 19 or 50. The County of Riverside has a merit scoring system that will take many factors into account which are likely to include some very technical categories but also some politically charged segments like Local Enterprise and Neighborhood Compatibility.
You will need professional help to digest this process and develop a winning application package and BeGreenLegal is here to help you turn your land and buildings into the most valuable cannabis asset – a license in Southern California.
