Industry Groups Opposes a Redo of the Social Equity Marijuana Program in Los Angeles

Cn Tower, Seattle

November/25/2019

The Department of Cannabis Regulation in Los Angeles has announced that it is planning on auditing the city’s social equity licensing program citing that people have complained of its inequality. However, an industry group has opposed the redrafting of the licensing program.

The Social Equity Alliance was held early in September and was formed to give a voice to the social equity applicants who were awarded license based on first-come, first-served.

The application for the social equity licenses was launched on September 3 from 10 a.m., where approximately 800 business owners applied for the retail marijuana licenses. The permits were to be granted to the first 100 applicants.

The spokesperson for the Social Equity Alliance, Jillian Goldsmith, told Cannabis Business Times that the morning of September, people were in a hurry to apply, which of the 800 applicants only 100 were eligible. Goldsmith further said that about 700 plus people were not selected, and they were upset for not being selected. The people who were funding and backing their business were also upset.

Late October, the licensing process was suspended by the City Council President, Herb Wesson, who claimed that the application system was compromised as some applicants were able to access the online application system earlier than others. In a letter to DCR, Wesson said urged to stop application processing of the retail marijuana licenses and audit the system and process before proceeding. He also called for the agency to process all the applications instead of the first 100 to uphold fairness in the awarding process.

The Executive Director of DCR, Cat Parker, said that only two applicants accessed the portal earlier, which was because of staff error. However, she further assured them their application had been pushed back to where they would have been if they had logged on the system at 10 a.m.

Goldsmith further says that the agency has fixed the problem, but people are still holding onto it, by claiming that all those who accessed the system for license processing cheated the system.

In early November, Eric Garcetti, the Mayor of Los Angeles, asked for the licensing process to be audited by a third party.

On November 18, Packer announced that the agency would not issue any marijuana dispensary licenses until they are given the green light to proceed and that the application system is not compromised.

Goldsmith said that the Social Equity Alliance was created to act as a voice for the people that did not proceed to the application processing stage since they were many and were throwing accusations against the agency.

Goldsmith said that although the application is calling for the processing of all the 800 applications, DCR does not have the workforce to process all of them and finish within the stipulated period because they are understaffed.

She further said that although the agency has employed more staff and received more funding, they are still understaffed and underfunded, and going through all the applications would extend the licensing process to an unknown time.

Goldsmith also added that the city of Los Angeles already has more than 200 licensed dispensaries, and adding 800 more would result in the outpacing of demand by supply. She further said that businesses are competing against each other as well as the illicit market, which currently thriving in the city.

Wesson’s office issued a statement to the Social Equity Alliance and said that the audit should be finished by December, but Goldsmith is afraid that the process might take longer, and the applicants cannot afford to wait. This is because they are holding on to the locations of their shops as they wait to be issued with the licenses and open their businesses.

The Social Equity Alliance wrote an open letter addressing all the issues raised against the licensing process.

Goldsmith says that the Social Equity applicants were verified and vetted that they were from low-income communities. Besides, they were also affected negatively by prohibition and have a history of marijuana convictions and reside in areas impacted by the war against drugs. This means that those who did not proceed past the application process are just looking for ways to get their licenses processed.

She further said that the extension of the licensing process period would end hurting the applicants.

The program was created to help those affected negatively by the war on drugs to join the emerging industry to try and turn their lives around. And delaying the licensing process results in loss of funds and time, and eventually, they will lose their business rental due to lack of rent money; thus, closure. Therefore, the agency should work on speeding up the process to avoid hurting and pushing them out of business.

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