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The Los Angeles Cannabis Regulation Commission voted Thursday to request the City Council begin issuing temporary approvals of licenses for applicants in the third phase of its program to give low-income residents and people who have been incarcerated for cannabis crimes a chance to operate their own cannabis retail shops.

The third phase of the Social Equity Program was halted late last year after it was discovered the online methods of applying for subsidized permits may have been compromised by a computer glitch. Applicants were also unhappy with the first-come, first-served approach the city mandated.

This triggered an audit of the third phase, mandated by the City Council.

The SEP awards the subsidized licenses to people who were convicted of cannabis crimes when sale and possession of the substance were completely illegal, or for people who have lived in a “disproportionately affected” area for at least five years.

More than 800 applications were submitted online to the city for specific cannabis retail licenses in the program’s third and most recent phase in September, but only about 100 were available, leaving hundreds of people frustrated.

Department of Cannabis Regulation Executive Director Cat Packer said there are parts of the licensing process that they can’t even access, such as federal criminal background checks.

“All of these different components are going to take their own trajectory,” Packer said. “I think if this body and the council wanted to create a more expeditious process, it could do so and there are a number of different options it would have in front of it. I don’t think it’s appropriate from a public safety perspective to just give everyone an authorization overnight.”

“But, for example, we could do, should the law change, something like what we did for our Phase II applicants in 2018, where we gave all of these businesses non-operational local authorization … that allowed businesses to apply for state licenses and start the process,” she said.

Commission President Robert Ahn said because the results of the audit will not be released until later this month, the commission doesn’t know exactly how it can proceed with the permitting process. He said DCR will provide updates as they become available, and he acknowledged that many applicants who were required to obtain or lease property prior to applying for a permit have been burdened by the process.

Ahn said he’s not sure which groups of permits will be able to be expedited, “but what we do know is that there will be a group that moves forward.”

Commissioner Rita Villa emphasized her support for expediting the permitting process.

“I heard a lot of people here today speaking of having 90 days left of capital, and … we (should) do something to expedite the application process for them,” Villa said. “I also don’t think Phase III applicants … should be treated in a manner that is different than Phase I and Phase II.”

Ahn said he agreed.

“I think when this (cannabis regulation) ordinance was first crafted, I don’t think it was anybody’s intention … that (applicants) would have to sit and pay rent for all these locations for an inordinate amount of time and still not know what the timing looks like, and I think it’s an unfair and undue burden we’ve placed on these leaseholders.”

Packer said she would like to come back to the commission with department recommendations on how to move applicants forward.

Other actions the commission voted to request from the City Council included asking for permission to access Live Scan technology to research criminal backgrounds of permit applicants, and they voted to ask the council to authorize the DCR to access $1.8 million from the state in equity grant funding. The commission also requested the council consider allowing businesses to relocate within their specified affected areas.

Details and deadlines for the SEP can be found at cannabis.lacity.org/licensing/social-equity-program.

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