Lawsuit seeks to overturn Los Angeles’ cannabis social equity licensing process

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lawsuit filed last week aims to have the results of Los Angeles’ social equity retail licensing round last fall thrown out and the entire process redone.

The suit, filed in California Superior Court in Los Angeles County, is led by the newly formed Social Equity Owners and Workers Association and actor-turned-cannabis entrepreneur Madison Theodore Shockley III.

The suit names the city’s Department of Cannabis Regulation (DCR) and its executive director, Cat Packer, as defendants.

The lawsuit points to the results of an independent audit released in March that show 226 applicants for 100 available social equity marijuana retail permits were able to log into L.A.’s online application platform before the official 10 a.m. start time for the first-come, first-served permitting line.

“Clearly, with only 100 applications being processed on a ‘first come, first serve basis’ … the 226 applicants that accessed the Accela portal early would have a significant advantage over other applicants that waited until 10:00 a.m.,” the suit argues.

The lawsuit also alleges that city officials have “no reliable means of determining which applicants actually won the race and where they should be placed in the licensing processing queue.”

The suit requests that:

  • A judge order the DCR to evaluate all 802 applications for social equity permits received last September.
  • A new licensing round be held to replace September’s process.
  • An emergency injunction be issued to prevent the DCR from moving forward with issuing permits to any of the 100 winners from last fall.

The DCR declined to comment on the lawsuit.

An agency spokeswoman confirmed to Marijuana Business Daily that the DCR on April 10 requested authorization from the mayor’s office to move forward with the licensing process but has not yet received the OK.

The agency paused the process last October, pursuant to the mayor’s request for an audit, so Los Angeles’ licensing process remains at a standstill.