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Los Angeles proposes ‘major course change’ for cannabis business licensing, social equity

In a series of recommendations to the Los Angeles City Council, L.A.’s Department of Cannabis Regulation proposed an immense overhaul of its marijuana business licensing structure and social equity program.

The DCR’s proposals are set to be taken up Tuesday by a City Council committee.

The recommendations, if adopted, could be far-reaching for many marijuana entrepreneurs hoping to win a city business license. The recommendations were both hailed and derided by industry officials after their release.

Supporters say the DCR’s recommendations represent a fulfillment of the city’s widely criticized social equity program.

The recommendations, sent to the City Council on June 16, are the first major move made by the DCR since the completion of an independent audit in March of its latest licensing round for 100 retail licenses last fall. City licensing has been on hold since then.But critics argue they will wreak further havoc in the industry by disenfranchising legacy operators who don’t qualify for social equity and haven’t yet obtained city permits.

The recommendations include:

  • Granting temporary approval for all social equity license applicants.
  • Allowing applicants and businesses to relocate within the city; currently, applicants are required to find a location and stick with it through the licensing process.
  • Limiting new storefront retail licenses and delivery licenses to social equity applicants until 2025.
  • Improving processes to minimize “predatory practices” in the social equity program.

The proposals must still be approved by the City Council before being implemented, and it’s unclear whether the council will choose to rubber-stamp the changes or approve some and reject others.

The recommendations will first be taken up on Tuesday morning by the council’s Rules, Elections and Intergovernmental Relations Committee.

The DCR declined interview requests from Marijuana Business Daily to clarify or explain many of its recommendations.

But, asked if the “temporary approval” for all applicants meant the DCR was suggesting an increase in the number of licenses available, an agency spokesman wrote in an email that “many licensing and social equity program stakeholders have expressed support for additional retail licenses to be made available, and the Department agrees that it’s an issue worth deliberate consideration by policymakers.”

Still, many observers believe that’s a nonstarter based on the political dynamics of the City Council, which has been reluctant to significantly expand the number of legal marijuana business permits.

The DCR’s recommendations were also announced on the heels of a motion that, if adopted, would restart the licensing process for the 100 retail winners from last September’s social equity retail permit round. The motion was submitted by L.A. City Councilman Marquees Harris-Dawson.

Those 100 have been in limbo for more than nine months while the licensing process has been on hold, meaning they haven’t been able to open their stores.

Harris-Dawson’s motion will also be considered Tuesday by the Rules Committee, making it unclear what the full council will do with the DCR’s proposals.

Spokespeople for Harris-Dawson and the other two members of the committee did not respond to a request for comment.

To Read The Rest Of This Article By John Schroyer on Marijuana Business Daily

Published: June 22, 2020

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