Los Angeles Amends Rules for Cannabis Licensing Amid Backlash Surrounding City’s Social Equity Program

The Los Angeles City Council unanimously approved rules July 1 to refine the licensing process and the criteria for new applicants seeking a cannabis license under the program.

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The Los Angeles City Council unanimously approved new rules for cannabis licensing under the city’s social equity program July 1 amid backlash surrounding the rollout of the program, the Los Angeles Times reported.

The program aims to ensure that those disproportionately impacted by prohibition benefit from legalization, and has largely targeted applicants who have cannabis-related convictions or have resided in areas with disproportionate arrests for cannabis crimes, the news outlet reported, but it has been criticized for not adequately representing Black entrepreneurs.

While Los Angeles previously designated the areas most disproportionately impacted by cannabis-related arrests by zip codes, the city is now narrowing the eligible areas to police reporting districts, the Los Angeles Times reported, in an effort to better target affected areas.

The city is also changing the licensing process for the next round of cannabis dispensaries, according to the news outlet.

For its last licensing round, the Department of Cannabis Regulation planned to issue 100 cannabis retail licenses to social equity applicants in a first-come, first serve process that was marred by controversy after some stakeholders alleged that some applicants gained early access to the online application system while others were locked out due to slow internet speeds.

This led to the suspension of the licensing process and an audit that has since determined that the city took “reasonable” steps to ensure fairness, although some applicants have sued the city over what they allege was a “flawed process."

Los Angeles now plans to use a lottery system to issue the next round of licenses, the Los Angeles Times reported, and eligible applicants must have a California cannabis arrest on their records, as well as qualify as low-income or live for 10 years or more in an area hardest hit by the war on drugs.

The city’s new rules also clarify language surrounding how much control a social equity applicant must have in a business to strengthen these requirements, according to the news outlet, to keep applicants from partnering with wealthy investors, which raises concerns about predatory agreements.

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