Los Angeles committee continues DCR fee study after social-equity operators call grant a 'fee trap'

Public commenters representing social-equity cannabis businesses urged a Los Angeles City Council committee to overhaul the city's cannabis licensing fees and investigate how a state grant was spent, saying the Department of Cannabis Regulation (DCR) left equity operators paying thousands in licensing and environmental fees.

The committee heard a presentation from DCR staff on a 2024 comprehensive fee study that would increase commercial cannabis application, licensing, inspection and regulatory fees to recover departmental costs. DCR staff told the committee the fees have not been raised since 2020 and that if the council does not adopt the proposed increases, several general‑fund departments that support DCR would face a budget shortfall.

Why it matters: The dispute affects hundreds of licensees and the city’s special cannabis revenue fund. Public speakers said state grant money intended to waive certain local fees instead was used for salaries and other costs, leaving operators to pay tens of thousands in fees. DCR says the state later retroactively disallowed some uses of grant funds, creating a budget hole the fee study is intended to close.

Public comment: More than a dozen speakers — including owners and representatives of social-equity retailers and industry groups — described similar experiences. “We were told this social equity program would help those harmed by the war on drugs. Instead, the Department of Cannabis Regulation took $22,000,000 meant to support us and turned it into…