XPost: alt.fan.rush-limbaugh, alt.los-angeles, sac.politics   
   XPost: alt.politics.marijuana, talk.politics.guns   
   From: grafittibass@lamayor.org   
      
   There’s no question people in L.A. County consume a lot of pot — nearly   
   a million pounds of cannabis each year according to official reports.   
   While the demand is clearly there, legal cannabis businesses in the city   
   of Los Angeles say they are struggling just to stay open.   
      
   Cannabis business owners told LAist they struggle to pay high taxes and   
   fees while they watch illegal operations go unchecked. They say when   
   they’ve tried to talk to city officials, they’ve been stonewalled and   
   shut out.   
      
   Some licensed cannabis business owners have had to close. Others say   
   they are months — if not weeks — from having to shut their doors,   
   leading to lawsuits and a rowdy, confetti-filled confrontation at a   
   public meeting.   
      
   Many of these business owners are part of L.A.’s Social Equity Program,   
   which was supposed to provide a boost to Black and Brown communities   
   disproportionately targeted by previous criminalization of pot. Instead   
   of a leg up, the business owners told LAist the program has led to a   
   cycle of stress, debts and broken promises.   
      
   They’re not the only ones with debts to pay.   
      
   One state audit found that grant funds meant to help cannabis businesses   
   may not have been spent as intended. The L.A. Department of Cannabis   
   Regulation (DCR) estimated the city may need to return up to $10 million   
   they received from that grant to the state.   
      
   An audit of another grant found that $1.8 million meant to go directly   
   to social equity businesses was also not used according to grant   
   agreements, according to email correspondence LAist acquired through a   
   public records request.   
      
   In emailed responses to LAist questions, Jennifer Marroquin, a   
   spokesperson for DCR, said a resolution was made with the state on the   
   $1.8 million figure and that the department has returned nearly $48,000   
   in grant money that was not spent during the grant term. Marroquin said   
   the state recently granted another $3.5 million to support L.A.’s Social   
   Equity Program.   
      
   Marroquin said the program provides “free and low cost legal assistance”   
   to applicants and business owners. The department is a permitting   
   agency, Marroquin said, and “does not get involved in private business   
   disputes, business decisions, collect taxes or engage law enforcement   
   for unremitted taxes.” LAist has reached out to Mayor Karen Bass, who   
   did not respond prior to publication.   
      
   This isn't just bad policy, it's a betrayal of the equity promise.   
   — Whitney Beatty, legal cannabis business owner   
   Whitney Beatty told LAist that she was promised grants, technical   
   assistance and legal services through the Social Equity Program to help   
   run her dispensary, Josephine & Billie’s in Exposition Park. She’s one   
   of about 240 current cannabis business owners licensed through the   
   program — among about 700 total legal shops in the city.   
      
   “ I'm spending tens of thousands of dollars just to stay licensed and   
   compliant, in a system that charges my customers over 40% in taxes while   
   they can walk across the street to an unlicensed shop and buy untaxed,   
   untested product for half the price,” Beatty said at a Cannabis   
   Regulation Commission meeting on July 2.   
      
   “This isn't just bad policy, it's a betrayal of the equity promise.”   
      
   The high price of cannabis business   
   Los Angeles created the Social Equity Program in 2019 “to promote   
   equitable ownership and employment opportunities in the cannabis   
   industry, with the purpose of decreasing disparities in life outcomes   
   for marginalized communities directly impacted by the War on Drugs,”   
   according to the city’s website.   
      
   Since then, the program has provided about $13 million in grants   
   directly to business owners, according to an LAist analysis of DCR data.   
   In all, the 271 applicants who got grant funding received an average of   
   around $48,000.   
      
   Even some business owners who received the maximum total grant amount —   
   about $93,000 — told LAist that the money didn’t go far to cover taxes,   
   fees and other costs they say were imposed on them by DCR.   
      
   Business owners have to pay a variety of fees, costing tens of thousands   
   a year.   
      
   https://s3.documentcloud.org/documents/26035336/fee-study-chart-   
   5-0418-rpt-dcr-04-17-25.pdf   
      
   Taxes on cannabis products in the city of L.A. are significantly higher   
   than those on other products.   
      
   In addition to the standard 9.75% city sales tax, cannabis businesses   
   pay another 10% in business tax, and a state cannabis excise tax of 19%.   
   That brings the total tax rate on legal cannabis in L.A. to a staggering   
   39.75%, according to an L.A. City Council motion presented by   
   Councilmember Imelda Padilla in July.   
      
   Padilla’s motion called for an analysis of the potential effects of   
   lowering the city’s cannabis tax in an effort to make L.A.’s shops more   
   competitive — both with unlicensed shops and with neighboring cities   
   that have lower base tax rates like Long Beach (8%) and Pasadena (4%).   
      
   Many L.A. business owners like Brandon Brinson say they simply can’t   
   afford to pay all of their taxes in the current market. While Padilla’s   
   motion is still making its way through committees at the City Hall, he   
   and others say they’re running out of time.   
      
   Brinson and his wife, Evelyn, opened their business in 2022. Just three   
   years later, Brinson is closing up The Green Paradise shop in   
   Mid-Wilshire. He said the high taxes, fees and rent are to blame.   
      
   Brinson spoke with LAist at his cannabis dispensary storefront on July   
   25, the day before he had to turn over his keys to his landlord. His   
   shop’s shelves were bare.   
      
   Brinson said his experience with the social equity program has been   
   frustrating from the start and has “ led to nothing but complete debt   
   and devastation.”   
      
   He first applied for the social equity program in 2019, and it took a   
   lawsuit for him to be able to apply for a license.   
      
   The lawsuit, filed by social equity applicants against the city in 2020,   
   claimed that some were given an unfair advantage by being allowed to   
   access the application portal before it officially opened. Every second   
   was crucial, they said, in a race that only gave the first 100   
   applicants an opportunity to open a licensed business. As a result of   
   the lawsuit, the city issued additional licenses to entrepreneurs   
   including Brinson.   
      
   “ They just painted this grand opportunity to rebuild the Black   
   community . . .  to help rebuild or restore the harm done from the War   
   on Drugs,” he said. “ So we jumped in. It was a no-brainer at that   
   time.”   
      
   Three years after opening, he said social equity applicants like himself   
      
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