West Hollywood City Council Kicks Decision on Increasing Cannabis Recreational Licenses to Next Year

The West Hollywood City Council tonight agreed to postpone a decision on a proposal to increase the number of licenses for recreational cannabis retailers from eight to 10.

City Hall will proceed with plans on Tuesday to release the names of the eight successful applicants for recreational cannabis sales licenses, which do not include any of the four current medical cannabis dispensaries that hold temporary recreational sales licenses. The possibility of increasing the number of licenses to accommodate those existing retailers is likely to be back on the agenda in January.

The city also will name on Tuesday the eight successful applicants for medical cannabis licenses, for licenses to sell edible cannabis products for consumption on site, for licenses for lounges where cannabis can be smoked and vaped and for licenses for city-based cannabis delivery services. West Hollywood currently is home to four medical cannabis dispensaries, each of which was granted a temporary license last year to sell recreational cannabis after the state legislature based

A memo to the City Council last week revealed that the current holders of temporary recreational cannabis sales licenses did not rank among the top eight applicants, although one ranked ninth and another ranked tenth. Neither of those two was identified by name. Apparently each of the four current holders of medical cannabis licenses did qualify for one of the eight one-year renewal licenses granted in that category. Those medical cannabis retailers are Alternative Herbal Health Services at 7828 Santa Monica Blvd., Los Angeles Patients & Caregivers Group at 7213 Santa Monica Blvd., MedMen WeHo at 8208 Santa Monica Blvd. and Zen Healing at 8464 Santa Monica Blvd.

The City Council last year approved the complex licensing process that some applicants said cost them as much as $200,000, which included an application fee of $9.880 for each category except delivery licenses, whose applicants had to pay $5,025. Other money was spent on lobbyists and donations to incumbent council members running for re-election in March, donations to the Gay Men’s Chorus of Los Angeles, a charity chaired by Mayor John Duran, and to hire local residents to provide proof of community support and engagement by the applicants.

The City Council adopted a “merit-based” approach to determine who qualified for a license. The screening application included information about the applicant’s proposed business plan, design concept, security plan and experience in the business. Applicants did not need to have leased a location to apply. Those receiving licenses will have to secure a location and get the approval of the city’s Business License Commission before opening.

In an effort to ensure that applications would be reviewed on their merits, each screening application was reviewed and scored by an independent five-member application evaluation committee appointed by City Manager Paul Arevalo. Applicants were barred from contacting any members of the Application Evaluation Committee. The intent was to make the process totally objective, with applicants not chosen because of their political influence.

While the City Council agreed last year to limit the number of licenses to eight in each category, some council members argued at tonight’s meeting that the city should find a way to accommodate the existing local cannabis businesses that didn’t rank high enough to qualify for a license.

Councilmember Lindsey Horvath suggested that the city consider increasing the number of licenses to 10 in each of the categories. Councilmember John D’Amico recommended the Council delay its approval of the new licenses until City Hall revealed who had qualified for them and identified the recreational cannabis license holders who ranked ninth and tenth in the competition. Councilmember John Heilman argued for increasing the number of licenses to 10 so that two of the existing businesses would qualify.

The interior of MedMen, the medical marijuana dispensary at 8208 Santa Monica Blvd.

Only Councilmember Lauren Meister objected to changing the results of the evaluation process. She said it was a shame that the existing businesses didn’t qualify for recreational sales licenses. But “it’s not a fair practice if you change the rules because you don’t like the outcome.”

Mayor John Duran said that changing the rules at the last minute to accommodate the existing businesses “seems unequitable and unfair.” However, Duran noted that the process of opening a new recreational cannabis retail business could take from six months to a year. Given that the temporary recreational cannabis licenses granted to the current four medical dispensaries will expire on March 28, Duran said the city could be left without any recreational cannabis retailers for many months.

Duran also said that he supported the current cannabis retailers, “They have been operating for a long period of time in the city,” Duran said. “… In essence they have become really great members of our community.” D’Amico agreed. “Four great businesses in the city will be asked to stop,” he said.

Duran also said that the fact that the city’s Code Enforcement office has never penalized those existing businesses and that they have not violated the law should have been considered positive attributes in granting a license. MedMen is, however, being sued by employees of its West Hollywood location, who allege that it has violated state laws by not paying them properly. Employees elsewhere have alleged that MedMen has illegally taken tips given to them by customers.

Representatives of some of the existing medical cannabis dispensaries argued that denying them recreational sales licenses would hurt them financially. None of them could survive selling only medical cannabis said Jeff Seymour, a lobbyist for MedMen. His statement was echoed by Don Duncan, president and founder of Los Angeles Patients and Caregivers Group. ““It is not economically viable to be a medical only dispensary,” Duncan said

Jason Beck, whose Alternative Herbal Health Services has been operating in West Hollywood for 15 years, said that nothing spoke more loudly of his shop’s qualifications for a recreational sales license than its length of service.

  1. All 4 of the current dispensaries should be given licenses. They went through the process to get a license for medical marijuana a long time ago and have served the city well for many years. The idea the legalization and expansions of the marijuana industry will not include the dispensaries that started it all is stupid.

  2. Only big capital can get a license in the cannabis industry. It’s all corrupt. I thought I might have a chance to license my business in West Hollywood so I invested in the process. What a scam. If you don’t have millions it’s not happening. We put everything we had into the process. Turns out the lobbyists we hired under recommendation from our attorney received a license! She was even a competitor in our license category! If Cannabis licensing isn’t legal plunder I don’t know what is. Stealing from the people and giving it to big capital. If this was Paris the people would be in the streets. If cannabis operators want to keep their businesses it’s going to take a major pushback. The operators that have been raided , arrested , jailed and convicted as felons will be pushed out by the same capital that was lobbying to keep cannabis illegal. George Carlin was right in one of his famous rants ( ” They want it all ” ). First they put you in jail then they steal your business.

    The cities could license everyone and broaden their tax base. Let the free market decide , but why work hard in your community when you can steal ?

    1. You might consider filing a conflict of interest action against the lobbyist and also your attorney a claim of Unfair Business Practices for a start.

      1. I agree with you unfair business practices. We are looking into this. We really just want a fair process based on merit. Jackie Subeck new she was getting a license before the application process was even open. Weho is definitely as corrupt as any other city. It’s to bad … I had a lot of hope for weho.

  3. I agree Bill, the legal cartel is much more corrupt than the illegal cartel. It’s all about money. The fact that only millionaires have the means to start a business that will make them million s more is beyond corrupt and morally reprehensible. Ohh wait, they did say they will donate a percentage of the millions they are making lol.

  4. The rules were clear from the start. Current medical dispensaries were given temporary recreational licenses. And the city reached out for best and brightest new applications. Zero of the four local current made the cut so they continue as medical dispensaries- to say they can’t make it as medical is crazy given they were making as medical for years and years- they not only have their patients- they have 100% of the market share. The winners – who ever they are will have played by the rules and invested in these applications. If the city is going to change the rules late in the game to increase the amount of dispensaries by 20% maybe they should offer a 20% discount to applicants off their 10k per ap submission. Nobody knows the results yet but one thing seems clear- it will be almost impossible for 40 winners to find locations and if they don’t secure a location – the next guy in line might get the chance but gotta respect the rules- this isn’t trump bringing in Whittaker for AG – there is a process and the council approved and voted. Staffs fear that ‘Weho will have no cannabis retailers’ really is just fear- new licenses can partner and the amount of places w cannabis in the city is going to go to 36 places from 4 — the most fair approach is a level playing field which will begin when the rules that were set are followed.

  5. I have been a loyal citizen and booster of West Hollywood for over 25 years, and I am just AMAZED at how messed up this entire process has been.

    You’d think the Mafia could do a better job, and I mean it. This is simply a travesty.

    Undercutting current businesses, destroying people’s relationships with their shops, initiating a completely opaque process. Generating licenses without the need for specific demand, I almost can’t believe this is my city.

    1. I must respectfully disagree with your comment.

      The city held a public meeting with an open question / answer session, and has posted Q&As on their website. They issued a point-based application scoring system that makes the scoring very fine grained and specific. They published the names of the application review team. West Hollywood has kept the website up to date on when the winning applications and their scoring will be released

      If the existing businesses were not competitive in this process it doesn’t make sense to say that it’s West Hollywood’s fault.

      1. Im confused.. you disagree with my comment to ‘respect the rules’ and then you say it doesnt make sense to say that its West Hollywoods fault. Arent we saying the same thing. ?

      2. I hired a lobbyist by the name of Jackie Subeck about 6 months before the application process opened up. After 2-3 months we met with Jackie for a update on any progress she has made on our behalf. At that meeting she informed my partner and I that we would not be getting a license. Jackie then proceeded to tell us she was getting a license and we could work for her ! Obviously the rest of that meeting was down hill from there and she ended up storming off while we were trying to explain all the issues with what she had done. She didn’t see any conflict of interest. So my partner and I decided to go through the application process for a delivery license anyway. We both felt like weho would be able to see what we built and how much the community loves our business and weho would want us there. So we spent the money.
        Well it turns out Jackie Subeck was right. We weren’t getting a license and she did get a license. She knew before the application process even opened up that she had a license and we didn’t.
        My only regret is not taking her seriously and saving the tens of thousands of dollars spent on a corrupt process. Weho did do a thorough job of covering there ass. I felt like it was going to be really fair or really corrupt up to the last minute. A activist with no cannabis business experience gets a license based on a merit driven process? Ok .. how?
        And she new before ever submitting a application! Can you scream corruption any louder ??? Why is this not on nbc ? Where is cnn ?

        Thanks for reading

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