Los Angeles City Council backs major changes to marijuana licensing, social equity

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The Los Angeles City Council gave its initial approval to sweeping changes to the city’s marijuana business licensing and social equity program, ending months of delays that had held up the permitting process and sparked widespread frustration among stakeholders.

The proposals – which range from minor tweaks to major changes such as awarding retail licenses only to social equity applicants until 2025 – were championed by the L.A. Department of Cannabis Regulation (DCR), which sent the recommendations to the City Council last week.

The Council voted on the changes Wednesday. It must approve them once more, and then the mayor must sign off before the changes are implemented.

“If this is adopted, we’re going to walk away with the strongest protections. I think we’ll be back in front of Council with additional recommendations. … But I appreciate the Council’s support on these recommendations today,” DCR Executive Director Cat Packer said during Wednesday’s hearing while discussing requested protections from “predatory practices” for social equity participants.

Packer added she hopes to make both delivery licenses and storefront retail permits available as quickly as possible to social equity applicants in order to restart the licensing process, which has been on hold since last fall.

The City Council also adopted a motion by member Marquees Harris-Dawson to get the 100 social equity retail license winners from last year immediately on track for approval.

Doubts raised

However, the vote Wednesday did little to quell the anger in many industry quarters over lengthy delays that have cost stakeholders immense sums in rental payments for business properties that have to date gone unused.

Several insiders repeated the point that while the city has been working on social equity for roughly three years, no retail permits have been issued to any social equity applicant. Many charge it is an obvious failure by the city’s leaders.

Adam Spiker, the executive director of the Southern California Coalition, said he and many others remain uncertain as to whether the proposed changes will have any positive impacts.

There wasn’t much time for stakeholders to digest the proposals themselves.

“Maybe they’re good changes. Maybe they’re not,” Spiker said. “I’m just not convinced that some of the recommendations they made are going to help bring about a prosperous, legal cannabis market in the city as soon as possible.”

Zach Pitts, the CEO of delivery company Ganja Goddess, called the development “another step backwards instead of forwards.”

He also predicted the changes will only further stimulate L.A.’s huge illicit market, in part by forcing out many non-social equity legacy operators that haven’t yet had an opportunity to win retail permits.

Donnie Anderson, co-founder of the California Minority Alliance and a longtime advocate for social equity, said the changes are “a Band-Aid over a wound that needs surgery and stitches.”

“They’re making social equity an afterthought instead of a priority,” Anderson said, reiterating that he believes the current system has been corrupted and isn’t serving the minorities it was intended to serve.

Attorney Ariel Clark, who represents a swath of clients both inside the social equity program and outside of it hoping to gain MJ business permits, was critical of the council for having been “radio silent on cannabis issues for a year” before parachuting in this week.

“While the changes are mostly positive and comprehensive on paper, they don’t help equity applicants who needed support 12 months ago,” Clark wrote in an email to Marijuana Business Daily.

“A lot of great equity business owners were left behind by the city’s silence, so I hope they move very quickly to grant those temporary licenses because every day that passes is another opportunity lost.”

John Schroyer can be reached at johns@mjbizdaily.com