The Los Angeles Department of Cannabis Regulation (DCR) has selected 100 social equity applicants for an opportunity to apply for retail cannabis licenses following a lottery last week, Marijuana Business Daily reports. The city’s social equity application process was contested in a lawsuit earlier this month by a Michigan cannabis entrepreneur but a U.S. district judge ultimately ruled for the lottery process to proceed.
The successful applicants were named during Los Angeles’ Phase 3 Retail Round 2 Lottery. During a livestream of the lottery, DCR said it had contracted a third-party global business advisory firm called FTI Consulting Inc. to administer the selection process. The results were later verified by auditing firm Sjoberg Evashenk Consulting, which confirmed there were no discrepancies with the lottery process or results.
Kenneth Gay, a principal at the California-based firm Variscite, had argued in a lawsuit that Los Angeles’ cannabis social equity requirements — which require applicants to have been convicted or arrested in California for a cannabis-related crime — violate the U.S. Constitution’s dormant commerce clause, which prohibits state and local governments from giving local citizens preferential treatment over citizens from other states, the report said.
Gay had previously filed a lawsuit contesting the social equity program in Sacramento, California; he also sued over the social equity rules in New York, which temporarily halted the licensing process there.
DCR said it received more than 1,200 applications for social equity verification and more than 500 applicants had qualified for the program, the report said.
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