Shared Use Manufacturing Ordinance
Shared-use manufacturing allows multiple licensed manufacturers to produce cannabis products from a single facility. The following operations can be conducted at a shared use facility:
The Long Beach City Council passed the Cannabis Shared-Use Manufacturing Business Ordinance at its meeting on July 13th, 2021. The ordinance took effect on August 15, 2021, thirty-one (31) days after it was signed into law by Mayor Robert Garcia.
The City is currently updating it's licensing software to accommodate the new license type and is working on creating the administrative procedures to license shared-use manufacturing facilities. Due to some significant staffing challenges in multiple departments, the City does not anticipate accepting applications for cannabis shared use manufacturing licenses until summer 2022.
State Laws & Regulations
Shared use manufacturing allows multiple licensed cannabis manufacturers to produce cannabis products using the same facility.
Pursuant to State regulations:
Type S licensees are allowed to perform Type 6 (Non-Volatile Extraction), Type N (Infusions), and Type P (Packaging & Labeling) manufacturing. The licensee must identify a primary licensee's facility to conduct their manufactuirng operations.
Primary licensees are the owners and operators of the shared-use manufacturing facility. They are licensed cannabis manufacturers conducting Type 7 (Volatile Extraction), Type 6 (Non-Volatile Extraction), Type N (Infusions), or Type P (Packaging & Labeling) operations and are responsible for all activities performed by Type S licensees at their facility.
Each manufacturing business must obtain a separate license from the State and the City (once they become available).
Businesses at a shared-use manufacturing facility must take turns operating at the facility and using the shared equipment. The Primary licensee will assign a designated area to be used as shared space. An occupancy schedule, outlining the days and/or times that the space will be used by Type S licensees, must be posted. Only one licensee can utilize the space at a time.
Type S licensees may conduct the following cannabis manufacturing activities:
- Packaging and labeling
- Extractions with butter or food grade-oils (*Note: the extract or concentrate produced can only be used in the Type S licensee’s infused products)
For newly emerging businesses who want entry into the cannabis manufacturing industry, shared-use manufacturing offers a path forward with lower capital costs to begin developing products. On December 1, 2020 the Office of Cannabis Oversight presented a report to the Economic Development and Finance Committee detailing Cannabis Equity Business Ownership Opportunities. The report identified the key benefits of shared-use manufacturing:
- allows multiple businesses to locate in a single facility,
- lower startup costs for product development,
- eliminates the need to secure individual property,
- allows for incubation model to develop businesses.
To date, the City has taken the following actions regarding shared use manufacturing:
- July 31, 2020 - Staff released a feasibility study to the City Council on shared use manufacturing
- August 5, 2020 - Staff released a memo to the City Council on equity business ownership opportunities, which included shared use manufacturing
- January 5, 2021 - The City Council voted to request staff to prepare an ordinance to allow shared use manufacturing in Long Beach. As part of the ordinance, Council requested that staff reserve Phase 1 of the licensing process to equity applicants.
- January through June 2021 - Staff performed research and outreach to other cities regarding their shared use manufacturing programs, conducting policy discussions with various City departments responsible for the licensing and regulation of cannabis facilities, and conducting community engagement and outreach to cannabis manufacturers, cannabis business organizations, and equity applicants in Long Beach. Read the full report here.
- July 6, 2021 - The City Council voted to approve the ordinance to allow shared use manufacturing in Long Beach. As part of the ordinance, Council increased General Fund appropriations to update the City licensing system.
- July 13, 2021 - The City Council passed the shared-use manufacturing ordinance.
- August 15, 2021 - Cannabis Shared Use Manufacturing Ordinance took effect.
As part of the preparation for the ordinance, staff performed outreach through surveys and listening sessions with the different community stakeholders.
On April 14th 2021, staff released a survey via email to cannabis manufacturers, cannabus business organizations, and equity applicants to gauge their interest in shared use manufacturing and their feedback on how the City can increase equity ownership with shared use manufacturing.
From April 19th through April 23rd 2021, staff conducted listening sessions with the various stakeholder groups to allow these groups to speak directly with City staff on these topics.
Read the full report here.
The ordinance will take effect thirty-one (31) days after it is signed into law by Mayor Robert Garcia. Applications will likely be accepted beginning in October.