Bulletin 2022-07: Clarifying what Constitutes a Material Change to an Equity Applicant’s Permit Application

Clarifying what Constitutes a Material Change to an Equity Applicant’s Cannabis Business Permit Application

The Office of Cannabis (“OOC”) provides Equity Applicants that are applying for a Cannabis Business Permit under Sections 1604(b) and 1606(a)(1) of the San Francisco Police Code (“Equity Applicants”) with limited flexibility to amend their application prior to permit issuance.  But changes that OOC determines are “material” require the submission of a new application, including a new time stamp tied to submission of the new application.

OOC issues this bulletin to describe the types of changes in an application that OOC will find to be material changes, requiring submission of a new application.

For clarity, the OOC defines an Equity Corporate Applicant as the corporate entity an Equity Applicant includes on their application.

Allowed Changes to a Permit Application

An Equity Applicant has the flexibility to add or remove investors to acquire working capital for their project. Section 1608(c)(5) allows an Equity Applicant to transfer any amount of ownership interest in the Equity Corporate Applicant prior to permit issuance so long as the Equity Applicant maintains the ownership threshold required in Section 1604(b)(3). The addition or removal of investors will not amount to a material change in an application, so long as this addition or removal is not coupled with any changes to the form or structure of the Equity Corporate Applicant or to the business location at any time prior to issuance of a Cannabis Business Permit.

Similarly, under Section 1608(c)(6), a stand-alone change in the form or structure of an Equity Corporate Applicant will not be considered a change affecting an ownership interest in a Cannabis Business, and therefore will not be a material change, so long as the Equity Applicant does not also seek to change the ownership and/or business location prior to permit issuance. 

Per section 1609(28), the OOC Director has the discretion to allow or require an Equity Applicant to supplement, amend, or correct any information or documentation submitted as part of their Application under section 1609.  But the Director will not allow changes to the location of the proposed cannabis business after the project site has been inspected by OOC or any other Referring Department. Section 1602 of the Police Code defines a Referring Department as “any City department, agency, office, board, or commission that is required by this Article 16, or its implementing regulations, to review an Applicant’s application for a Cannabis Business Permit prior to issuance of such permit by the Director.”

Material Changes to a Permit Application

Where an Equity Applicant seeks to make changes in form or structure of the Equity Corporate Applicant AND add or remove new investors after securing an informal Planning Department determination and prior to permit issuance, these changes together will amount to a material change. In this case, an Equity Applicant must submit a new application. In addition, the original application will no longer be viable and a new time stamp will be generated with the submission of the new application.

Finally, as mentioned above, a change in the location of the proposed cannabis business will constitute a material change, if that change does not meet the requirements set out in our “1606(c) Permit Application Processing” regulations at Section 7. Changing the location, outside of the allowed parameters, will be a material change and will require the submission of a new application.

If you have any questions then please get in touch with the OOC at officeofcannabis@sfgov.org.