The executive director and general manager of the Los Angeles Department of Cannabis Regulation addressed concerns and expressed her disappointment Thursday regarding the department’s specified cannabis retail license process, which is subject to an upcoming audit.

The Social Equity Program is open to people who are considered low-income and/or have a low-level criminal history related to cannabis and operate in a “dispensary-impacted area,” most of which are located in South Los Angeles and Hollywood.

But the process for dispersing those licenses has been controversial since it started to take shape. 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 frustrated.

“I know there’s a contingency that wants us to process all the applications, but the department does not have the discretion to do that,” said Cat Packer, the executive director and general manager of the DCR, during a Cannabis Regulation Commission meeting.

Packer said on April 30, City Council amended ordinances to set limits on the number of SEP retail permits — 100 licenses for the first round, 150 for the second and 100 for the third, and she said the department does not have the legal grounds to grant more.

“What disappoints me most is we always knew there were only going to be 100 and yet we allowed 802 people to take financial risks,” Packer said. “I don’t think that was necessary.”

Packer also said the commission made recommendations to city council against a first-come, first-serve policy, which ultimately became the policy.

More than 100 people packed the meeting room, with most of the people in attendance being SEP applicants or supporters of those applicants. People were visibly angry with how the process has gone so far.

In November, Packer said Mayor Eric Garcetti called for an independent review of the SEP application process for the Phase 3 Retail Round 1 and stated that the final licensing process will not continue until the completion of the audit.

Amid questions about the fairness of the process and potential problems with the online application system, City Council President Herb Wesson said in October that he asked the DCR to suspend processing retail licenses.

The commission discussed bringing several recommendations to Garcetti’s office, as well as the City Council and Chief Administrative Officer, the latter of which will conduct the audit.

The recommendations include figuring out what happened on Sept. 3, when the licensing website went into effect for the third round and some people were able to access it earlier than the planned start time of 10 a.m., having representatives from the SEP program be involved in the audit.

The commission was unable to take a formal vote as the recommendations were not listed on Thursday’s agenda.

Commission President Richard Ahn said many jurisdictions are having problems with creating policy related to legal cannabis and that improvements need to be made. He said people who applied are already heavily invested in their properties.

“Do they hang on to real estate hoping something happens? In the meantime, they’re being harmed financially, and I think we need to figure out a mechanism to allow the process to continue because this is not going to be (fixed) overnight,” Ahn said. “I run into people, too, and I’ve heard a lot of anger and frustration, and I share that.”

Commissioner Rita Villa said she would like the audit conducted in the same manner as an environmental impact report, which are done under local, state and sometimes federal law to receive stakeholder input on certain projects. This, Villa said, would ensure more voices are heard.

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