Cannabis Commission Seeks to Improve Social Equity Program amid Complaints

The Los Angeles Cannabis Regulation Commission Thursday addressed complaints from people who said their applications to open a marijuana dispensary were unfairly processed, and it forwarded several requests to the city council to try to improve the specified licensing program.

The Social Equity Program is open to people who are low-income status and/or have a low-level criminal history related to cannabis and operate in a "dispensary-impacted area," most of which are currently located in South Los Angeles and Hollywood.

Dozens of SEP applicants flooded the City Council Chamber, many of them saying they were angry about how the program's system has not worked for them.

People who spoke said their internet connections were not fast enough to facilitate the website, and they said they think people may have been prioritized in the system, which was supposed to randomize applicants.

Cat Packer, the executive director and general manager of the DCR, recited the contact information of the Ethics Commission if people had concerns about the program.

"There have been a number of allegations and concerns as part of public comment, and anyone who is engaged in this process is welcome to share any information regarding any ethics violations," Packer said.

Commission Vice President Rita Villa said to Packer that there were many things she wanted to go smoothly in the SEP application process that did not.

"I just ask your department to have a real think about how we can address this and how we can correct the situation, and maybe one of the corrections ... is maybe we need more than 200 (SEP-licensed businesses)," Villa said, to which the audience members roared with applause. "I know that is a (city) council decision ... I just want your department to ... just analyze, what possible ways are there for improving this situation."

Commission President Robert Ahn said he would like to hear a response back from Accela, the company contracted by DCR last week to run its application system, to see if they can find any irregularities. He also said he wants to put a "fair remedy" in place for anyone who has been unfairly processed.

"We heard a lot of very passionate and very compelling testimony from the various stakeholders, and many of the allegations that I was hearing, that we were hearing, were extremely concerning, and I think Ms. Packer's presentation shed light on many of those issues," Ahn said. "But I think one thing that we need to make clear is that the process is everything. The integrity of the process must be upheld at all costs."

In the SEP's latest application process, the DCR said nearly 1,900 people registered in July to apply for licenses and it expected hundreds more to flood in since.

In its first two phases, it dolled out temporary approval status to almost 300 existing dispensaries and cannabis providers and is now reviewing applications for delivery and additional retail licensing.

The commission voted unanimously to request the city council extend the allowable time from when an SEP applicant was convicted of fraud or embezzlement from five to 20 years, as they said they didn't want someone with that kind of criminal record to take advantage of what's intended to be a subsidized business platform. The recommended barring people with the same criminal backgrounds from becoming SEP support representatives.

The commission also recommended collecting demographic information from applicants in order to ensure licenses are fairly issued, to have a representative assist them with their applications and business practices, allow dispensaries to relocate within their community planning area and to establish a corporate responsibility mission statement.

Commissioners also considered implementing a temporary licensing program, and the DCR will provide a report on such a program's potential impacts.

A report from the Los Angeles City Controller last week noted that the city collected more than $70 million in cannabis business and sales taxes last fiscal year.

The California Bureau of Cannabis Control recently announced it will spend $10 million to help social equity programs in cities, including Los Angeles and Oakland, which will get almost $3.5 million between them.

DCR will hold two conferences in preparation for a second request for qualifications for on-call business development services for the SEP, the first of which is at 10 a.m. on Friday at the Figueroa Plaza, 201 N. Figueroa Street, ninth floor, Commission Hearing Room.

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