Los Angeles mayor expected to pick new chief for city’s cannabis agency

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Los Angeles Mayor Karen Bass is shaking up leadership at several city agencies, including an expected management overhaul at L.A.’s cannabis regulatory agency – which oversees a roughly $1 billion marijuana market.

A listing for an executive director for the Department of Cannabis Regulation (DCR) has been posted on the city’s employment website for several weeks, increasing speculation that interim director Michelle Garakian is on the way out.

The deadline for candidates to submit their applications is 4 p.m. PT Aug. 18.

The annual salary for the position is $155,681 to $276,075, according to the posting.

The DCR executive director oversees a staff of 55 employees and an adult-use marijuana market that generates about $1 billion in annual sales – on par with entire states that have established recreational programs.

Los Angeles’ program recorded first-quarter total taxable cannabis sales were $236,871,994, according to the California Department of Tax and Fee Administration.

Garakian is a longtime DCR insider and former aide to previous Mayor Eric Garcetti, who appointed her in March 2022 as interim Los Angeles marijuana czar.

Garcetti’s mayoral term ended in November 2022, opening the door for Bass, a Democrat and former member of the U.S. Congress who campaigned on affordable housing and homeless-shelter expansion in the mayoral election.

The homeless population in L.A. has nearly doubled in the past decade, with 42,000 living on city streets at any given time, according to estimates.

Some of the mayor’s early large-scale initiatives to house the homeless has already limited the DCR’s efforts to give social equity license holders and other retailers a greater role in the city’s cannabis industry.

The mayor’s office did not response to several MJBizDaily inquiries regarding the open executive director position at DCR and Garakian’s future.

DCR spokesperson Jennifer Marroquin, in an emailed statement, said: “The department supports and defers to the Mayor and the Mayor’s Office on these important decisions in relation to the city’s cannabis industry.”

Since Garakian replaced former executive director Cat Packer, the DCR has dealt with numerous challenges related to licensing, administrative setbacks, legal challenges and greater influence at City Hall, which has few marijuana industry advocates.

“There’s very few council members that are enthusiastic about the industry,” Solomon Rivera, chief of staff for Councilor Marqueece Harris-Dawson, told MJBizDaily in April.

Harris-Dawson is one of the few cannabis industry advocates on the City Council.

Goals and milestones

When Garakian took the post in March of last year, she told MJBizDaily her top priority was unclogging a bottleneck of cannabis business license applications and approvals as well as transitioning a glut of provisional licenses to annual licenses by Jan. 1, 2026, under state law.

She also hoped “to get back to the mission of the department, which is licensing,” Garakian said shortly after taking the role.

The DCR, for its part, has made some significant strides over the past few years under Garakian.

Among them:

  • Migrating more than 1,100 applications from the temporary licensing process to the annual licensing process.
  • As of July 31, 2023, issuing environmental-review letters to every business with temporary approvals to start the transition from provisional licensure to annual licensure at the state level.
  • Fully staffing the agency for the first time in its five-year history with a total of 55 workers.

Perennial problems and new challenges 

Despite the accomplishments, large-scale problems persist in L.A.’s marijuana industry.

While the DCR has issued more than 400 social equity businesses licenses, including more than 80 for retail – among the highest totals in the country – getting those licensees up and running has been difficult.

Only a handful of social equity retailers are operational today, as capital shortages and securing approved real estate remain perennial challenges.

More recently, Bass’ plan to build and retrofit thousands of single-family homes and multifamily units for the homeless is creating new obstacles for marijuana retailers and entrepreneurs searching for property in one of the nation’s priciest real estate markets.

Such dwellings – known as Permanent Supportive Housing (PSH) properties – are considered one of several “sensitive uses” under L.A. zoning laws.

Cannabis stores are prohibited from operating within a 700-foot radius of such properties.

L.A.’s vast network of unlicensed operators has continued to flourish as well, even with dozens of illegal stores shutting down throughout the city.

Of course, the illicit market has been an ongoing problem across California for years.

Law enforcement officials across the state have told MJBizDaily they do not have enough personnel or resources to limit the sheer number of unlicensed cultivation sites in the region.

Similarly, most serious marijuana-related criminal penalties – which used to serve as deterrents for many illegal operators – were thrown out in 2016 when California voters approved Proposition 64, the ballot measure that legalized adult use.

To exacerbate matters, the “DCR has no authority under local law to enforce against unlicensed activity … nor do we have any authority to directly influence how other city agencies prioritize their resources to address this issue,” Garakian told MJBizDaily about a year ago.

The agency, however, told MJBizDaily it has addressed 92% of all complaints received to date or referred them to the Los Angeles Police Department for further criminal investigation.

Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.