Los Angeles Agrees to Rework Cannabis Social Equity Licensing

A lawsuit filed against the city of Los Angeles, California by the Social Equity Owners and Workers Assn. and one of its members has been dropped after officials agreed to process more of the applications for new cannabis industry licenses, the Los Angeles Times reports.

Advocates had filed the lawsuit in April arguing that the application process for new dispensaries – a first-come, first-served system – was flawed. The city had opened up licensing last September for 100 total licenses.

The plaintiffs had claimed in the lawsuit that more than 200 applicants had accessed the online application portal before the official start time for applications which gave them an unfair advantage over others who had waited until the 10 a.m. start time. City attorneys argued that just because they accessed the platform, didn’t mean they started their application and that those who started early were pushed back in line to where they would have been if they started on time. The city also claimed an audit found officials took reasonable and appropriate steps to prevent unfairness in the system.

Last week, the City Council unanimously approved new regulations that will tighten up the city’s social equity program and create rules for licensing new dispensaries in city neighborhoods that have already reached their cap. The reforms were part of a settlement for ending the litigation, according to the report.

Kika Keith, Social Equity Owners and Workers Assn. co-founder, called the new social equity program rules “a great victory” for affected entrepreneurs.

“Social equity applicants banded together and raised the money for legal fees to fight the injustice of the application process.” – Keith to the Times

The city will also scrap the first-come, first-served system in favor of a lottery system. The new rules also narrow the ZIP codes eligible for social equity licensing relief in the city after it was discovered that some wealthier, affluent, white neighborhoods were included among the list of ZIP codes eligible for the program. Licensing officials will now use police reporting districts which Department of Cannabis Regulation Executive Director and General Manager Cat Packer said would better target the communities most affected by the drug war for the licenses.