City Council approves Department of Cannabis Regulation fee increases amid social equity outcry

Los Angeles City Council approved a fee study for the Department of Cannabis Regulation (DCR), a measure that social equity business owners said will raise operating costs while the department’s processing problems remain unresolved.

The council voted on a slate of items that included the DCR fee study (item 8) during an early roll call of items; the clerk recorded 13 ayes on items 2 through 6 and 8 through 12. Social equity owners who addressed the council during public comment said the fee increases will harm businesses still suffering processing delays and said the city should provide targeted relief.

Why it matters: social equity applicants and license holders said the DCR’s application and inspection backlogs, combined with higher fees, threaten small legal cannabis businesses and the city’s goals for an inclusive industry.

Public commenters asked the council to reject or audit the fee study, pause new licensing until the system is fixed, and make affected businesses whole for past overcollection. Madison Shockley, identified as a social equity owner and co-chair of the Black Los Angeles Cannabis Council, said the fee increase amounted to a 137% raise and criticized the timing: “These increases are to make up for the 10% e increases that they’ve gotten every year for the last 5 years,” she said, adding that many social equity businesses remain financially fragile. Luis Rivera, a social equity applicant and license holder who represented Social Equity LA, asked the council to “reject the audit and reject or audit the proposed fee study until an independent party can conduct public input, especially social equity owners.” Christopher Martinez, a social equity applicant, pressed the city to publish reliable processing timelines and argued the fee study was “speculative at best” without those performance metrics.

Council action and related items: Councilmember Imelda Padilla circulated an amendment related to item 7 (pause of Round 3 of social equity licensing). After consultation with the city attorney, Padilla’s amendment (item 7) was continued to June 17, allowing more time for review and circulation. The DCR fee study (item 8) was approved as part of the package of items taken earlier in the meeting (vote recorded as 13 ayes on the slate that included item 8).

What advocates asked for: speakers urged several specific remedies, including publishing accurate, stage-by-stage processing timelines; extending temporary approvals and transitional status for social equity licensees who have not converted to annual licensure; dedicating grant funds directly to social equity businesses rather than department salary increases; and consideration of tax reimbursements for periods when the city calculated gross receipt taxes in a way social equity owners said double-taxed state levies.

Council response and next steps: Councilmembers did not adopt all the specific remedies requested during public comment. Item 7—the motion to pause Round 3 licensing and related amendments—was continued to June 17 for further consideration. The transcript does not record a separate council vote to reimburse prior tax overcollections; public speakers asked the council to pursue reimbursements but no such directive appears in the meeting record.

Ending: Social equity owners and applicants told the council the DCR’s delays and the newly approved fee structure risk shrinking the licensed market and worsening inequities. The council’s continuation of item 7 and the public comments logged at the meeting set the stage for follow-up hearings and possible motions before Round 3 licensing is resumed.