Cannabis entrepreneurs who want licenses to open new shops in Los Angeles are suing the city, arguing that an application process flooded by hundreds of competitors was “flawed” and unfairly implemented.
The lawsuit, filed this week by the Social Equity Owners and Workers Assn. and one of its members, is pushing for the city to vet every one of the applications turned in under a first-come, first-served process for a limited number of licenses — or to roll out a new process that gives everyone “an equal, fair and transparent opportunity” to compete for a license.
The group filed its suit less than three weeks after a long-awaited audit of the hotly contested process for handing out L.A. licenses for new shops was released.
Hundreds of people rushed to turn in applications in September, vying to be first in line for just 100 licenses that were expected to be awarded through the process. Mere seconds made the difference in whether someone had a shot.
When marijuana applicants discovered that some people started their applications before the official 10 a.m. launch time, many argued that the process had been tainted. City officials called for an audit scrutinizing what had happened, and the licensing process was put on hold for months.
The audit, conducted by Sjoberg Evashenk Consulting, found that although some applicants got into Los Angeles’ application system ahead of its official launch time, the city took “reasonable and appropriate” steps to prevent any unfair advantage — by pushing their applications back in line to where they would be if they began the process at 10am.
The city administrative officer, one of the top officials in Los Angeles, said the newly released report found “no evidence of bias or unfairness” and that the city should press forward with awarding licenses.
Critics pointed out, however, that the audit also showed that the department had told some applicants they couldn’t sign onto the online system at all before 10 a.m., a necessary step before beginning their applications. That wasn’t accurate — and auditors found it could have put some marijuana entrepreneurs at a disadvantage because they waited to do so.
Published: April 18, 2020
Founder & Interim Editor of L.A. Cannabis News