This week in the California Cannabis industry there have been new retail business openings, tax-related changes for business owners, and updates on a court case regarding the selection process of LA Cannabis licenses.

Southern California Introduces First Cannabis and Food Drive-Thru

After weeks of temporarily closing their doors, Original Cannabis Cafe has finally reopened its doors. They first opened as a cafe in October 2019 but had to shut down due to COVID-19. Their previous Cannabis license didn’t allow for takeout or delivery, but they have recently been approved by the BCC to reopen their doors and are now known as the “World’s First Cannabis and Food Drive-Thru.” As of April 23, Original Cannabis Cafe is now offering drive-through and delivery services for Cannabis products and food. 

Although they are open 7-days a week, Original Cannabis Cafe is still taking precautions to protect employees and customers. Employees have their temperature taken before entering the premises and must wear gloves at all times. Employees are required to practice social distancing with staff and guests and adhere to the all-staff hourly washing times. When patrons pay with credit cards, the staff provides the guests with alcohol wipes to sanitize after their transaction. This new addition to the Cannabis industry may pave the way for other entrepreneurs looking to open a business.

New State Tax Guidelines Enacted to Support Cannabis Businesses During Pandemic

The California Cannabis industry is known to have high taxation on Cannabis businesses. Although some retail businesses have thrived during this time, others are struggling to keep their doors open. In an effort to counteract the effects of COVID-19, the California Department of Tax and Fee Administration (CDTFA) has implemented a variety of initiatives to support these owners including:

  • Tax return filings and payments extension
  • Relief from tax interest and penalties
  • 60-day extension for filing refund claims, annual fees, installment payments, annual reports and audits
  • 60-day extension to request tax appeals
  • 12-month sale and use tax deferral up to $50,000 for businesses under $5 million in annual taxable sales
  • Filing extension for first-quarter taxes for businesses under $1 million in annual taxes

Under the new guidelines, Cannabis business owners are expected to have their payment plans and tax penalties erased. The guidelines may also help keep employees working. 

Cannabis Entrepreneurs Sue Los Angeles Over Licensing Process

Entrepreneurs looking to open Cannabis businesses in LA have begun suing the city for an unfair licensing process. In September of 2019, potential business owners rushed to input applications for the two coveted retail licenses in LA. However, these owners are claiming that some businesses may have been able to submit their applications before the official 10 am launch time. According to the lawsuit, Social Equity Owners and Workers Association argues that the city should review these applications on a first-come, first-served basis in order to give everyone an equal opportunity. The city has fought against this bias accusation arguing that officials took reasonable and appropriate measures to prevent any unfair advantages.

The city administrative officer recently released a report that found no evidence of bias or unfairness in regards to Cannabis licensing and argued that the city should move forward with awarding these licenses. Both parties are still arguing their side of the case and no licenses have been awarded at this point.Do you have California Cannabis compliance and regulatory questions?  We can help.  Give us a call at 949-268-2857.

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