Two Cannabis Trade Organizations Filed Lawsuit Against Los Angeles Legal Pot Market
LOS ANGELES – On Monday, two cannabis trade organizations filed a lawsuit against Los Angeles and its Department of Cannabis Regulation over the restrictions on stand-alone cannabis delivery services that have kept them from getting licenses until 2025. The lawsuit seeks to overturn the rule enacted earlier this year that has postponed the availability of licenses for specific businesses.
With that new rule, the licenses would be made available to social-equity operators. This would include people, many of color, who have been arrested or convicted of cannabis-related offenses or have lived in neighborhoods that have been impacted by high cannabis arrest rates.
However, the lawsuit is not trying to limit the right of social-equity applicants to get delivery licenses. Instead, it seeks to get the court to allow other stand-alone delivery businesses to apply, something that was allowed when the law was initially passed.
Zachary Pitts, CEO of Ganja Goddess delivery service, said that when City Council rewrote the regulation in July, it delivered “a death blow.” He, along with the trade groups Southern California Coalition and the California Cannabis Couriers Association, filed the suit.
“It’s devastating,” Pitts said. “No one is going to last until 2025.”
The lawsuit shows that Los Angeles’ legal cannabis market is struggling, despite people believing that it would become the leader of the world’s cannabis economy. Instead, the black market continues to operate as legal cannabis business operators are forced to deal with high taxation, dense regulations, and limited licenses that are hindering the industry’s growth.
Adam Spiker, the coalition executive director, said delivery businesses have been awaiting the LA market since 2018. Then, the city reversed course to handle widespread complaints regarding licensing and social-equity programs. The supply chain has been damaged because many of these businesses have had to pull out.
“These people have sat here and waited” to enter the market legally, Spike explained. “Out of nowhere, their pathway … was taken.”