The most populous city in the most populous state in the country has for months fumbled its efforts to create an equitable cannabis industry. But that is poised to change. On Wednesday, the Los Angeles City Council voted in favor of sweeping changes to the cannabis industry, the most significant of which could allow the city to get back on track when it comes to equity efforts.
As Cannabis Wire reported ahead of Wednesday’s vote, the Los Angeles Rules Committee voted last week to send several equity-related proposals to the City Council. Still, approval from the Mayor will be needed for the changes to move forward.
The more than 100 pages of reports sent to the City Council from the city’s Department of Cannabis Regulation included several “immediate policy objectives,” including:
• Expanding the definition of Equity Share, and “additional protections to mitigate against potential predatory practices.”
• Limiting new delivery and retail licenses only to social equity applicants until the end of 2024.
• Granting social equity license applicants temporary approval.
• Allowing cannabis businesses to relocate; currently, they are required to remain in the same location on their application.
During last week’s City Council meeting, ahead of this week’s vote, DCR executive director Cat Packer briefly took questions from council members.
Monica Rodriguez, representing District 7, asked how the proposals would affect “eligible licensing limits in community planning areas.” There are limits, for example, on how many cultivation and manufacturing licenses can be made available across the city’s 35 such planning areas.
Packer responded that “the amendments that are before council today for consideration do not change the undue concentration limits within the city of Los Angeles,” but that they “would exempt an additional one hundred retail licenses from that particular calculation.”
Next, Curren Price, representing District 9, asked about the decision to make new delivery licenses that are available, at first, only to “social equity applicants,” and whether those would be available “now.”
“Yes, that would be the intention to make the delivery license type immediately available to social equity applicants,” Packer replied, adding “Part of what we’d like to ask this council is when adopting this ordinance to do so with an urgency clause. That would allow us to move forward more expeditiously, to allow our applicants to move to the process. We’ve heard a lot of feedback from stakeholders. Folks are eager to be able to move forward. And, particularly right now, folks are looking for economic opportunity.”
Price then asked about the process behind “protections that mitigate against the potential predatory practices” that have been seen during the equity application process.
Packer outlined changes to how “equity share” would be defined, in order to protect ownership of a license and how profits are shared, for example. Packer added that all social equity applicants will be required to “add an addendum to all of their operating agreements that clarifies that if any provision of the operating agreement is in violation of the social equity program, that particular license could be considered null and void.”
Still, Packer acknowledged that “the department does have limited resources in order to monitor some of the private interactions that happens with social equity applicants.”
Price then asked about how requests to relocate will be granted in such a way to “ensure fairness,” in particular in cases where several businesses all want to relocate to certain areas.
Packer noted that certain license types aren’t limited, such as “delivery, distribution, testing, and nonvolatile manufacturing,” and therefore would be allowed to move freely from area to area under the new plan. But those that are limited, such as retail and cultivation, if they want to move outside of the specific “community plan area” in which they are located, they will have to go through something called a Public Convenience or Necessity Application Process.
Price thanked Packer, before the Council voted to adopt the final cannabis item of the day. “We look forward to these changes creating a more robust social equity program, and one that will generate the kind of support and results that we all hope it will.”
