Cannabis entrepreneurs in Los Angeles are facing significant challenges that are pushing many back into the illicit market due to excessive permit fees and a complex bureaucracy.
During a recent public comment session with the city council’s Government Operations Committee, Brandon Brinson, founder of The Green Paradise dispensary, expressed his frustration, asserting that the promised support from the city’s Social Equity Program has largely failed those impacted by the War on Drugs.
Brinson passionately proclaimed, “We were told that the social equity program would help those harmed by the War on Drugs. Instead, we’ve been trapped in a bureaucratic maze of broken systems, delayed grants, and rising fees. I’m so sick of this shit. And then y’all gonna get up here and act like y’all done did something. Y’all ain’t done shit for us. Nothing!”
Launched shortly after the legalization of recreational cannabis, the Social Equity Program was intended to serve as a “restorative justice tool” for individuals directly impacted by the War on Drugs by providing financial, legal, and business resources.
However, many social equity licensees, including Luis Rivera, founder of Social Equity L.A., argue that the program has not fulfilled its mandate.
Rivera wrote to the committee, saying, “As a Social Equity licensee, I’ve experienced long stretches of silence waiting for updates, invoices, or even basic communication from DCR. These delays have cost me real money and forced me to walk away from opportunities I couldn’t afford to wait on. Meanwhile, the department continues to move at a glacial pace, with no accountability to the people most impacted by its delays.”
Elliot Lewis, CEO of Catalyst Cannabis Co., voiced similar sentiments, stating that the DCR has not earned the tax revenue from the cannabis industry, calling the social equity program an “abject failure.”
The situation is exacerbated by the DCR’s proposal to increase licensing fees, which are already exorbitant for business owners, costing them tens of thousands of dollars annually.
In a report presented to the city council, the DCR indicated that the fee increase is necessary to rectify a significant budget deficit. Jason Killeen, the assistant executive director for the DCR, highlighted the need for increased fees as a measure to avoid a general fund deficit affecting multiple city departments.
Committee Chair Councilmember Imelda Padilla raised questions about the necessity of increasing fees after maintaining the same rate for five years.
Killeen explained that staff vacancies, which ranged between 10 and 50 percent, were a method to compensate for budget shortfalls. Additionally, he pointed out that grant funds had been used to cover staff salaries.
One notable grant was from the Department of Cannabis Control (DCC), which awarded Los Angeles over $22 million in 2022 to help businesses transition from temporary to annual licenses as part of a broader initiative aimed at “small, legacy, and [social] equity businesses.”
Zachary De Corse, chief of the DCR’s Administration and Community Engagement Division, told the committee that the DCR managed to avoid raising fees for some time due to this grant.
However, complications arose when the DCR learned that over $10 million of the grant could not be utilized for the annual application fees as initially anticipated. De Corse explained, “Unfortunately, we learned from the state last year that they were disallowing significant portions of those fees, most specifically the annual application fee.”
Evelyn Brinson, a social equity licensee, shared her experiences with the committee, stating, “I’m here today not just as a business owner but as a survivor of a failed promise. We were told the Local Jurisdiction Assistance Grant would remove financial barriers for operators like me. But instead, the Department of Cannabis Regulation took $22 million dollars meant to support us and turned it into a fucking fee trap.”
She revealed that she received nearly $20,000 in environmental and annual renewal fees after the DCR had allocated state funds to their operational costs rather than supporting the licensees.
Brinson’s assertion that this situation was far from equitable elicited strong support from those present at the meeting.
Due to the partial use of the grant funds by the DCR, the department now faces a budget deficit even if it returns $10.5 million to the state, according to De Corse.
“So that’s the main issue, because we weren’t allowed to waive those fees per the original grant agreements, there is a deficit now created,” he stated, laying out the consequences of the DCR’s financial management to the committee.
Councilmember Padilla pressed further, questioning the reasoning behind these financial missteps. “Well, how did you mess that up?” she inquired, prompting applause from the audience.
In defense, Killeen claimed that the misunderstanding was not a blunder on the part of the city but rather an issue stemming from the state’s handling of the grant agreements.
He explained that an audit revealed that the grant coordinator at DCC had not properly reviewed the agreements, resulting in a misallocation of funds that eventually required jurisdictions to amend their funding requests.
As discussions wound down, there was a slight sense of optimism as Councilmember Padilla requested that the DCR include more information in their upcoming report to the Government Operations Committee, allowing for further consideration before any fees are increased.
This request was met with applause from the audience, reflecting the mounting frustrations and hopes within the community for a favorable resolution.
image source from：https://lataco.com/dispensary-permit-fee-increase
