Los Angeles Officials Move to Change Rules for Local Legal Cannabis Market

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LOS ANGELES – Los Angeles City Council committee members last week took action to “reboot” the local legal cannabis market, according to media reports. Revisions to local regulations would expand licensing and resources for cannabis industry members who have suffered negative effects from the war on drugs.

The revisions included suggested changes “such as limiting delivery licenses until 2025 only to businesses that meet so-called social-equity benchmarks,” local news outlet KTLA5 said.

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KTLA5 also reported that Los Angeles Department of Cannabis Regulation Executive Director and General Manager Cat Packer said the connection “between cannabis policy and racial injustice is clear to me. Black and brown communities … have been disproportionately impacted, disproportionately policed, and we made a commitment to actively acknowledge those harms and address the harms of the drug war.”

Changes would allow cannabis businesses “to relocate while being licensed, clarify what employees are required to have background checks, and streamline the application process,” KTLA5 said.

The changes come amid California cannabis industry calls for reform from stakeholders and small businesses. Potentially the largest legal market in the U.S., the state’s cannabis businesses have been beset by competition from illicit vendors, ever-increasing taxes and fees, and losses due to the pandemic—despite having been declared an “essential service.”

Action by local officials to address hardships on cannabis businesses came at the same time the Los Angeles Times reported about local social equity programs, developed to provide additional business resources for people of color, as well as those disproportionately affected by the war on drugs.

The article focused on “4thMVMT, a company founded by a well-to-do businessman who partners with Black entrepreneurs to obtain cannabis licenses.” Thirteen of 4thMVMT’s social equity partners have been scheduled for licensing, according to the L.A. Times.

Yvette MacDowell, a municipal cannabis consultant acting as attorney for a 4thMVMT partner, has raised concerns about predatory business practices, calling attention to 4thMVNT contractual terms, especially regarding conditions for potential buyouts.

4thMVMT Chief Executive Officer Karim Webb responded by saying that contract language would be revised, and that any inference the company was involved in predatory practices was inaccurate. The company’s goal, he said, was to create “generational wealth” for partners.