L.A. Proposes Large Changes to Social Equity Program

Written by Rita Thompson

According to recent reports by Marijuana Businesses Daily, Los Angeles’s Department of Cannabis Regulation has proposed an, “immense overhaul of its marijuana business licensing structure and social equity program,” to the L.A. City Council.

What is Social Equity, Anyway?

The city of L.A. adopted the Social Equity Program in September 2019, according to the city’s Department of Cannabis Regulation (DCR). The program was developed to ensure that cannabis sale licenses are prioritized in communities most harmed by the War on Drugs.

As explained on the L.A.’s DCR website, “The [social equity] program is one tool that the city of Los Angeles is using to to begin to acknowledge and repair the harm caused by the War on Drugs and the disparate enforcement of cannabis prohibition.”

Black entrepreneurs and activists across the state, however, have been reflecting on the program to be an “indefinite waiting list,” as the businesses opportunities made available by the program often require millions of dollars in startup capital.

According to The Guardian, fewer than 20 of the 100 businesses on track to receive a license through the program are Black-owned. Concurrently, the existing white-washed L.A. cannabis scene continues to thrive, with California passing $1 billion in cannabis tax revenue in just two years.

Time for Change

In response to the often critiqued social equity program, the L.A. DCR is reporting to the city council to include the following police objectives:

Establish a process for the issuance of temporary approval for all applicants.
Allow businesses to relocate.
Clarify the process for applicants to request a finding of public convenience or necessity.
Allow individuals to participate in the Social Equity Program based on the original criteria or new criteria as supported by the Expanded Cannabis Social Equity Analysis.
Amend the selection process for Phase 3 Round 2 Type 10 retail application processing by establishing a selection process that identifies Social Equity Individual Applicants eligible for further process via a lottery process rather than an online, first-come, first serve process.
Limit Type 10 and Type 9 application processing to Social Equity Individual Applicants until January 1, 2025, unless an applicant received priority processing under LAMC Sec. 104.07
Expand the definition of Equity Share and establish related requirements to provide additional protections to mitigate against potential predatory practices.
Reorganize, clarify and include necessary procedures for the administration of the City’s commercial cannabis Licensing and Social Equity Program.
Address recommendations put forth by the Cannabis Regulation Commission.
Address extensive feedback from the licensing and Social Equity Program stakeholders.

“It is the Department’s position that immediate and comprehensive amendments are necessary for a more responsible and equitable Licensing and Social Equity Program,” reports DCR’s website, which adds:

“The Department of Cannabis Regulation is seeking to improve the administration of the City’s commercial cannabis Licensing and Social Equity Program through a proposed comprehensive reorganization and revision to Article 4, Chapter X of the Los Angeles Municipal Code (Cannabis Procedures Ordinance).”

It’s still unclear if and when the City Council will approve any of the above recommendations, so be sure to stay tuned for updates.