L.A’s Cannabis Licensing Process for Social Equity Applicants Called Out as Fiasco

A crucial component of any medical or recreational cannabis program should be the concept of “social equity.”

Much like the terms “organic,” “natural,” and “social media influencer,” it can be overused and void of any real meaning, but in general, social equity in cannabis is the idea that support and preference should be given to those who were most impacted by the war on drugs, and cannabis, specifically. And often, that means people and communities of color.

Los Angeles is the largest recreational cannabis market in North America, and has numerous neighborhoods and populations that have unfairly borne the brunt of cannabis prohibition.

In June, the Bureau of Cannabis Control (BCC) asked the LA City Council for an additional $2.25 million to add to the $3 million already set aside to fund the city’s social equity program.

LA has recently begun to issue their cannabis business licenses, setting up the following scene for many social equity advocates.

ADVOCATES: This cannabis social equity program is going to be different!
NARRATOR: It wasn’t going to be different.

Marijuana Business Daily has been keeping tabs on LA’s rollout, which happened in three rounds. In the first round “longstanding retailers in the city that could prove they’ve been in operation since 2007. The second (round) was for companies in the existing supply chain, such as growers and edibles makers.”

Then came round three, which was for the highly coveted initial release of 100 licenses for retail stores, AKA dispensaries.

In anticipation of this, the LA Department of Cannabis Regulation (DCR) in September offered a two-week window for qualified social equity applicants to apply for a license.

Thanks to a two-month vetting process by the DCR, it was determined there were more than 1,600 qualified applicants. The DCR had promised that “Applicants that qualify for the city’s social equity program will get priority in having their applications processed.”

The DCR ended up receiving 802 applications for this initial offering of 100 licenses, and has begun contacting those lucky 100 applicants to collect fees and move them to the next step in the process of opening a dispensary.

But both social equity supporters and officials aren’t down with how the licenses are being issued, including accusations that bots were used in the application process, perhaps heavily favoring the… (checks list)… Armenians?

Marijuana Business Daily also reports that there exists a “suspicion held by many stakeholders that automated online bots were used by some applicants to file multiple applications quickly on Sept. 3, arguably breaking the rules and giving them an advantage over other social equity participants.”

One longtime social equity advocate from Compton asks, “How is it that a majority of the first 100 names are Armenian?” Indeed, he is correct.

(Armenian Anti-Defamation League: It’s entirely possible that there exists in LA a sizable and well-heeled cannabis investment collective that is primarily made up of Armenians. I honestly don’t know, nor would I know who to even ask.)

Cat Packer, head of the DCR, defended the process, and said that “within the first three minutes after the 10 a.m. start, a whopping 338 applications had already been submitted, and the average time it took for the first 100 submissions was 71 seconds.”

She admitted, “If an individual applicant had a slow connection speed… that is something that would not be accounted for in our system.”

That’s not great news if you aren’t equipped with the highest speed internet available, which many social equity applicants likely do not.

None of this sat well with some members of the Cannabis Regulation Commission, who voiced concerns about the amount of time needed for an applicant to become fully licensed to begin sales.

“They’re being set up to fail,” Commissioner Thryeris Mason said of many social equity applicants, referring to how it will still likely be months before any of the newest 100 licensees can open their stores.

Commission President Robert Ahn echoed Mason, and said he’s heard from many social equity applicants that they’ve already been paying rent on store locations for months while waiting for the licensing process to play out, leaving many in dire financial straits.

“It’s like before they get out of the gate, it’s insurmountable odds already,” Ahn said. “What do we do about folks that are sitting on leases?”

Any addressing of these concerns and suggested changes to the program will need to come from the LA City Council, who have yet to weigh in.

Josh Taylor is a well-known and successful entrepreneur in the legal cannabis space, producing B2B and B2C cannabis events, "Backstage Budtending" and upscale concierge services through his companies OregonCannabisConcierge.com and CaliforniaCannabisConcierge.com. His weekly syndicated newspaper column and features about cannabis ran for five years until March 2020.

Similar Articles

Leave a Reply