An additional 100 social equity applicants in Los Angeles will get an opportunity to apply for cannabis retail licenses after a U.S. district judge refused to halt the lottery selection.
The application process in the nation’s largest marijuana market was the latest to face legal scrutiny when a Michigan man filed a lawsuit arguing the process was unconstitutional.
Kenneth Gay, a principal of Variscite, a California-based corporation, filed the California lawsuit a month after filing a similar suit in New York, where a federal judge ruled that state regulators couldn’t issue dozens of adult-use marijuana retail licenses until the legal action was resolved.
The most recently approved L.A. social equity applicants were selected under the city’s Phase 3 Retail Round 2 Lottery.
More than 1,200 applicants requested social equity verification and 500-plus qualified, according to the city’s Department of Cannabis Regulation.
Gay didn’t meet the criteria for eligibility under L.A. law, which requires an applicant to have a “prior California cannabis arrest or conviction” and either be low income or live in an area identified as disproportionately affected by policing.
Gay’s suit claimed he satisfied all three requirements, “except that the relevant events occurred in Michigan rather than California.”
The suit also contended that because Los Angeles “enacted laws and regulations that provide a preference to California residents over out-of-state residents for the Lottery,” the city’s social equity program violates the U.S. Constitution’s dormant commerce clause.
The dormant commerce clause prohibits state and local governments from granting preferential treatment to local citizens over residents of other states.
Gay also filed a lawsuit challenging the equity program in Sacramento, California.