Los Angeles Cannabis Commission Approves Plan to Barricade Unlicensed Shops

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Late last week, members of the Los Angeles Cannabis Commission voted in favor of asking the City Council to promptly adopt a motion that would enable authorities to padlock, barricade, or fence off properties that engage in unlicensed cannabis sales. 

The Commission’s move Thursday evening was led by President Robert Ahn, who noted that, following another recent motion that enabled authorities to cut the water and power at non-compliant properties, some unlicensed operators simply used generators to stay in business. 

“I think we have to do everything that we can as a city to try to put a dent into this problem,” said Ahn, pointing to safety, public health, and tax revenue issues rooted in the city’s rampant unlicensed cannabis sales. 

“We have operators that have not been tested,” he continued. “You’ve got illegal operators that are selling to minors . . . Not to mention the loss of tax revenue. Every dollar spent at an illegal operation—that’s money that’s not coming into city coffers.”

Ahn also addressed the potential impact of unlicensed sales on those who have applied for the city’s social equity program, which prioritizes licensing individuals with low incomes who were subject to cannabis-related arrests in particular areas under prohibition. Existing license holders are having a tough time grappling with unlicensed competitors, said Ahn, so when it comes to social equity applicants, “I wonder what kind of business environment we are sending them to.”

Before moving forward with a vote, other commission members raised questions about what barricading might look like, warning that such a move could ultimately contribute to the blight in already distressed communities. 

Such details, said Ahn, have not been fleshed out. However, the “general concept” is that city officials will have another another enforcement tool at their disposal. Padlocks alone, he underscored, would be insufficient because these can be broken. “There is no silver bullet,” Ahn stressed. Crafty unlicensed operators will find “ways to circumvents these enforcement techniques, but I think what we can do, as a department, as a city, it to make it hard for these individuals to resume operations.”

Ultimately, the Commission voted in favor of expediting the motion, which will require the City Attorney to prepare a draft ordinance that creates a process for the city to move forward with the plan. The ordinance will also task the Los Angeles Police Department and the Department of Cannabis Regulation with identifying locations where unlicensed commercial cannabis business activity is taking place. With this information, the Department of Building and Safety will then move to secure the properties. 

During the meeting’s public comment period, stakeholders took issue with current eligibility standards for the social equity program.  Arlene Mejía, director of community affairs at the consulting firm Cannabis Advising Partners, indicated that she has personally recruited some fifty people in south and downtown Los Angeles to apply. 

Through her work, said Mejía, she has identified several people who reside in the north and eastern part of the city who could potentially qualify based on their arrest records. However, because program eligibility is partly determined through residency in zip codes that, according to the city, were disproportionately targeted for enforcement under cannabis prohibition, these individuals will be unable to participate in the first round of social equity licensing, slated to start on September 3. 

“I’m part of the 90012 downtown LA zip code that’s supposed to be expanded. I have many friends and people that I would love to see included in this program in [the] San Fernando Valley, Boyle Heights, Pacoima, the northeast and east LA. It’s really important that they’re included in this first round,” Mejía said.

Cat Packer, executive director of the city’s Department of Cannabis Regulation, addressed these concerns in a subsequent presentation, indicating that before any change can be made, the City Council must first adopt additional criteria based on an analysis. The City Council, she noted, has, in fact, “called out specific areas—Boyle Heights, the downtown area, the San Fernando Valley—” and asked for a second analysis to potentially expand the regions eligible for the social equity program. 

But, in response to questions from Mejía and Commissioner Victor Narro, Packer made clear that the results of the second analysis will not be ready in time for applicants to participate in the third phase of retail licensing.

“There seems to be this assumption that, because there were many arrests that took place in these areas, it is inconceivable why this particular zip code qualified and another zip code didn’t,” she said. “The reality is that, when the analysis was done the first time . . . the data just did not show that cannabis arrests or convictions, which is what the scope of our analysis has been limited to, was occurring at a high rate in those particular communities.”

However, Packer said, in the “next several weeks to several months, there will be robust conversation about various eligibility criteria, and I actually intend to bring before this body a series of recommendations on how to reform [it],” both to ensure it meets its original purpose and to “allow more folks to participate.” 

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