Los Angeles - On December 8, 2022, the Department of Cannabis Regulation (DCR) successfully conducted the retail application lottery, also known as the Phase 3 Retail Round 2 Lottery (Lottery). The process selected 100 verified Social Equity Individual Applicants (SEIAs) for the opportunity to apply for a cannabis retail license in the City of Los Angeles. 

“The Department of Cannabis Regulation congratulates the 100 individuals selected in the Lottery and looks forward to working with them as they take steps towards realizing their entrepreneurial dream,” said Michelle Garakian, Interim Executive Director of DCR. “The City of Los Angeles has always been clear about making social equity a center of cannabis policy reform and this successful Lottery process is that mission in action. DCR has worked behind the scenes for the better part of a year to ensure a fair, smooth and transparent process.  I am excited to welcome these 100 selected Social Equity applicants to the licensing process and pleased with the administration and results of the Lottery.”

The Lottery was the culmination of nine months of planning, including a verification process that allowed individuals to request verification as a Social Equity Individual Applicant (SEIA). More than 1,000 individuals requested verification and over 500 SEIAs met the criteria to participate and timely registered to be entered  in the Lottery. Additional information on the SEIA criteria and process can be found here. The SEIA verification criteria align with the mission of the Social Equity Program (SEP) to promote equitable ownership and employment opportunities in the cannabis industry. The SEP is an integral part of the Department of Cannabis Regulation and provides economic opportunities for those most affected by the War on Drugs. 

On November 30, 2022, a lawsuit was filed in federal district court challenging the City’s retail cannabis application lottery. The lawsuit is part of a nationwide trend of coordinated legal proceedings seeking to dismantle social equity programs like the City’s.  Following a hearing on December 7, the Court denied the plaintiffs’ application for a temporary restraining order and ruled that the Phase 3 Retail Round 2 lottery could proceed. The City will continue to fight this lawsuit in court. 

DCR is pleased to announce that DCR’s Social Equity Program Director, Dr. Imani Brown, has earmarked grant funding to waive certain application fees for SEIAs selected in the  Lottery.  DCR looks forward to working with them in the near future.

“For years, the Social Equity Program has developed programs and resources to foster success for those already in business and those just starting out,” said DCR’s Social Equity Program Director Dr. Imani Brown. “This is an exciting time for our Department and for these 100 applicants. We are looking forward to supporting a new set of equity entrepreneurs just starting out in this  growing cannabis industry. We are ready to work hard for them as I am sure they will do the same in contribution towards the success of their own businesses.”

In advance of yesterday’s Lottery, DCR contracted with a third-party global business advisory firm called FTI Consulting Inc. (FTI) to administer the selection process. FTI, along with DCR and other City departments, utilized a triple-blind random selection process. A “blind” selection process means that the entity which selects the applicants does not know their identity. A “triple-blind” process means that no one involved in the process, including FTI, DCR, and other City departments, knows the identity of who is selected until after the selection process is complete and the data from each party is reconciled. SEIAs were randomly selected by FTI during a live streamed event which began at 2:00 PM PT, December 8, 2022. 

Unless there is a policy change, DCR plans for an additional SEIA verification process and subsequent lottery in early 2023.

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