The city of Los Angeles, California is being sued by the Social Equity and Workers Assn. over its cannabis licensing process, the Los Angeles Times reports. The organization argues that the city’s application process in September was “flawed” and unfairly implemented and the lawsuit seeks to force the city to vet every single application turned in or roll out a new process that allows “an equal, fair and transparent opportunity.”
In September, Los Angeles opened up another 100 cannabis licenses on a first-come, first-serve process but it was later discovered that some started their applications prior to the launch time. An audit of the process by Sjoberg Evashenk Consulting found that some applicants were able to access the system early, but the city took “reasonable and appropriate steps” to prevent unfair advantages, including moving those applications back in line to where they would have been if they had began the application process when the system opened.
The audit found 226 applicants had accessed the online platform before the start time, but only 14 of them actually started their applications early. The Social Equity Owners and Workers Assn. argues in the lawsuit that those applicants had a “significant advantage” over others who waited until the start time. The audit also found that some applicants were told they couldn’t even log on to the system before the start time but that was untrue.
“Fundamental to any fair race is that the competitors must start at the same time or, at the very least, be given accurate information about when the race will begin. The record demonstrates that this did not occur.” – Social Equity Owners and Workers Assn. in the lawsuit
Cat Packer, executive director of the Department of Cannabis Regulation, released a report earlier this month addressing the audit and potential fixes to ensure fairness in the next round. Tightening social equity rules and giving shops shut out of the previous licensing round “priority processing” are among her recommendations.
Get daily cannabis business news updates. Subscribe