Opinion: WeHo’s City Council Got Cannabis Licensing Right. But Now What?

A public presentation in April 2018 of draft cannabis license applications and criteria at the West Hollywood City Council Chambers.

Were you spammed this weekend with text messages asking you to “save legal cannabis” in West Hollywood?  Who knew legal cannabis was endangered?

During Pride some earnest young canvassers handed me a card graced with a rainbow pot leaf logo, seeking signatures supporting “the Original 4.”  While the young men seemed a bit confused as to the facts and history of why the Original 4 needed my support, it was obvious that this was another heavy-handed attempt to undermine the city’s thoughtful process for licensing recreational marijuana dispensaries. 

After the passage of Prop. 64 in 2016, West Hollywood embraced recreational marijuana sales while challenging the city’s dispensaries to up their game and ensure that WeHo would re-invent the industry, creating new standards and fostering creativity.  The goal was not simply to sell merchandise but sell an experience that would enhance West Hollywood’s position as an entertainment destination center.

The other part of this strategy was to ensure that the licensing process would be immune from lobbying and political influence.  The licensing process would be free of City Council influence in order to ensure the integrity of the process.  This was a widely applauded decision.

Apparently, the “Original 4” — MedMen, Zen, Alternative Herbal Health Services and LA Patients/Caregivers — were complacent or overconfident.  They had relationships with Council members and the Chamber of Commerce.  Maybe they did not take this process as seriously as they should have.  In the competition for the eight recreational licenses, the city was issuing, the closest two of the Original 4 came was 9th and 15th.  Having lost in the objective, independent process, the Original 4 are now trotting out employees to Council meetings and they have hired some of the city’s most well-connected lobbyists to undermine that process.  If anything needs to be “saved” it is the integrity of the city’s selection process. 

Essentially the Original 4 want the city to change the outcome for them and grant them recreational licenses, raising the number from eight to 12 in our small city and diluting the value of the eight licenses the city has already issued. 

In the meantime, the newly licensed recreational distributors have been securing leases, submitted architectural plans and are creating incredibly creative new retail spaces that will be light years ahead of the Original 4, whose dated facilities are simply a step removed from the old head shops that popped up in the 1970s.  The new licensees are investing millions in our community and will be economic engines that will make substantial increases in the city’s revenues. 

During the two-year selection process, the city received more than 300 applications with each applicant paying fees up to $9,880.   The city spent hundreds of thousands of dollars to work through this process to ensure that the most innovative and economically credible applicants would receive the licenses.  For whatever reason, the Original 4 didn’t make the grade.  Now they want to reshuffle the deck and are demanding the city change the rules to accommodate their situation. 

While drafting the selection process the City Council had discussed grandfathering the existing medical dispensaries so that they would automatically get recreational licenses.  They debated that issue and decided that everyone would play by the same rules for the new recreational marijuana licenses.  The Council did grant the Original 4 an automatic right to operate as medical dispensaries as they have for more than a decade.

The Original 4 are now claiming that West Hollywood is ignoring their “pioneering” efforts. They want us to forget that they have made millions when the received their medical licenses from the city.  The Original 4 have made piles of money and their principals have become millionaires.  WeHo has been very good to them.  But now they expect the city to lower the new standards simply because they didn’t take the new process seriously and failed to submit new incarnations of their businesses.  The city granted them a path to stay open as less lucrative medical dispensaries so they are not being totally written off and they will not be mandated to “close their doors.” 

I don’t want to sound hard-hearted about the employees of the Original 4 who may face layoffs.  But we have expanded the number of recreational facilities from four to eight so there will be plenty of employment opportunities for qualified employees of existing businesses.   The new licensees have committed themselves to working with the city to help any employees who may be laid off as a result of this process.

The City Council wisely crafted its cannabis ordinance, creating an independent and objective evaluation process, free of political influence.  To change course now under pressure from the losers would confirm the worst suspicions of many residents regarding City Hall’s integrity.  I trust our City Council will honor their word and stand by the process they designed.  Do you?


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K K
Guest
K K

The original 4 are in fact pioneers and it was in fact a difficult businesses and is still in fact difficult. I’m in favor of supporting them. The city may have given them licenses but they put in the sweat and tears. They may have made money but they had to spend a lot as well.

JMF
Guest
JMF

Very well said (and I don’t always agree with you Mr. Martin). The city had a process. The “Original 4” didn’t make the cut. They knew the rules…nothing is owed to them. Way too often these days rules, laws, code enforcement mean nothing and we’re seeing a break down in our city and the surrounding larger city of LA. Enforce the rules you spent so much careful deliberation creating..for all the right reasons.

Concerned in West Hollywood
Guest
Concerned in West Hollywood

The entire process should be investigated by the FBI along with the corruption at WEHO City Hall.

Truth
Guest
Truth

Have you seen the places that won the licenses? The “original 4” had to stick to what they are currently doing while the other applicants made outrageous claims of what they would do. A glass building with solar panels used for energy that looks like an art gallery. More than half of the “winners” still don’t even have an address for their business in West Hollywood.

Deciders
Guest
Deciders

So $2,964,000. application fees?
Who were the deciders?

It's Over
Guest
It's Over

This is over.
Judged and decided.
However it would be interesting to know the identity and qualifications of the independent committee members

WeHoMikey
Guest
WeHoMikey

that information is public. A quick google search will answer your own question.

Lex Corwin
Guest
Lex Corwin

This is a ridiculous op-ed. Those shops paved the way and are now being thrown by the wayside in place of a bunch of outsiders. We have no idea how these new retail shops will operate. Will they pay their vendors? Their employees? I do business with half of the original 4 and they are honest, trustworthy, and friendly shops. That’s more than I can say about the majority of the shops I deal with.

Michael G.
Guest
Michael G.

West Hollywood has so many conflicts of interest, a “pay for play” mentality overrides everything including the cannabis licensing handouts. Just look at Marathon Communications CEO, Richard Lichtenstein, getting a license to open a cannabis shop. No big surprise. He is the publicist for Townscape Partners, the New York developer behind 8150 Sunset Blvd, who drove out minority and gay tenants five years ago, forcing two into bankruptcy. He also is the media flack for 8899 Beverly, another Townscape Partners project. That’s the building the New York developers wanted a separate entrance for low-income tenants. John Duran, John Heilman, and… Read more »

Observer
Guest
Observer

Dated facilities? I don’t think the author of this Opinion has set foot in Med Men which reminds one of an Apple Store. And why denigrate them because their businesses don’t have chandeliers hanging from the ceiling as depicted in a concept rendering for at least one of the chosen eight?

Immune from influence? It’s somewhat commonly understood that the five review committee members were selected by the West Hollywood City Manager. And why were these five chosen? What was the PROCESS ?

Michael G.
Guest
Michael G.

One of the committee members is a longtime employee of West Hollywood. As for Med Men its the most modern facility. Appears Steve Martin is pitching WEHO like its a spic and span operation.

WeHoMikey
Guest
WeHoMikey

Michael G – who is that “longtime employee”?

Richard K
Guest
Richard K

Well written letter Steve. I’m not that familiar with the specifics and criteria used in grading out the new and existing dispensaries. Have you ever been to MedMen? It’s very simple. You walk in, you choose your items you pay and you walk out. I really don’t understand how these yet to be opened businesses will be “creating incredibly creative new retail spaces that will be light years ahead of the Original 4.” This sounds like hyperbole to me and unless they’re giving 3D rides similar to Disneyland I’m not interested. MedMen’s store on Santa Monica Blvd is clean, the… Read more »

Dbro143
Guest
Dbro143

Steve, I couldn’t disagree with you more. Why would a city want to shut down their original businesses to allow new ones to open? Does this happen to grocery stores? No. Does it happen to bars? No. Don’t you think we should allow them to stay open and let business success to dictate who stays open. If they can’t afford to stay open, then they will close, supply and demand. Most cities are granting social equity licenses. Weho is not. The original dispensaries had to endure years of federal raids in order to serve the public and that shouldn’t be… Read more »