Los Angeles City Council approves social equity program for cannabis industry

The Government Operations Committee meeting held on June 3, 2025, in Los Angeles focused on the city's social equity program related to cannabis regulation. The discussion began with an overview of the long-term impacts of cannabis criminalization on low-income minority communities in Los Angeles. The committee emphasized the need for regulatory programs to support these communities and provide employment opportunities within the cannabis industry.

A key proposal discussed was the exemption of social equity applicants from certain fee increases. The committee outlined that this exemption could lead to a reduction of approximately $7 million in fees, with a manageable financial impact of $2.4 million on the Department of Cannabis Regulation (DCR). This reduction would be achieved through various cost-saving measures, including the elimination of vacant positions and cuts to overtime expenses.

The committee also proposed modifications to municipal code 104.19, which would include a three-year exemption from fee increases for social equity applicants. Additionally, they instructed the Chief Administrative Officer (CAO) to commission a three-part study to assess the costs of fees and tax impacts on these applicants.

Further instructions included a detailed report on the DCR's processes for handling applications and a review of fines imposed over the past five years. The committee requested that the city attorney prepare an ordinance to modify the processing times for applications, particularly in relation to vacancy rates.

The meeting concluded with a call for collaboration between the city attorney's office and the DCR to ensure that the proposed changes align with the committee's recommendations. Overall, the discussions highlighted the city's commitment to addressing the historical injustices faced by marginalized communities in the cannabis sector while ensuring regulatory compliance and financial sustainability.