The City of West Hollywood Cannabis Licensing Ordinance was one of the first of its kind passed after California voters overwhelmingly voted to legalize the recreational use of cannabis through 2018’s Proposition 64.

In the years since the city has worked with cannabis operators on several changes and adjustments. In 2020, the city approved a settlement agreement between the city and cannabis businesses that was aimed at curing several issues identified by cannabis operators. But last year, the cannabis businesses, which operate under a marketing umbrella organization known as Emerald Village West Hollywood (EVWH), asked for additional changes that would help keep the industry competitive in the city vis-à-vis other competitors in neighboring municipalities as well as be profitable.

At issue Monday evening was whether the city council should pause any upcoming business deadlines or business code amendments and create a temporary tax rebate for the businesses until a new administrative review could take place and the council acts this spring. The other key tenet is changes to waitlist rules and new cannabis operators try and prepare to come online. The city staff report reads, “If approved, the proposed ordinance will afford the extra time needed for outreach and continue discussions with all cannabis stakeholders to try to reach consensus on outstanding items.”

The schedule proposed is:

• May 6, 2024 – Return to the City Council for consideration and introduction on first reading, the proposed amendments to the cannabis ordinance
• May 20, 2024 – Second reading of the proposed amendments to the cannabis ordinance
• July 1, 2024 – Effective date of proposed amendments to the cannabis ordinance

Danny Rivas, Director of Community Safety was on hand to present the proposal to the council. Rivas noted that part of staff’s request tonight is permission for the city manager or designee to negotiate a contract of $50,000 with EVWH to support marketing and outreach for the cannabis businesses.

Jackie Subeck, founder of Door Number Six consumption lounge in West Hollywood, said, “I am in support of everything on this agenda tonight. I think the pause helps reduce this incredible stress that a lot of these businesses have right now, which then frees up space for them to go and make this happen.”

EVWH’s Executive Director, Scott Schmidt, also supported the measure and made a point to thank city staff and stakeholders for taking the time to convene and listen to his member businesses.

Councilmember Lauren Meister suggested that businesses that have received their licenses but perhaps not secured a brick-and-mortar lease for their storefront, they be given 60 days after the end of the recommended six-month pause to identify their lease or title. “I don’t think that should be a requirement of the pause, because a pause is a pause,” she said.

Meister later clarified under questioning that she meant that after six months, the businesses in question should be able to identify their lease and title. However, the issue of an additional 60 days was still floated, and Councilmember John Heilman suggested that it perhaps be a piece of the motion tonight only as direction to staff that it could be used in negotiation with industry stakeholders.

To some cannabis businesses that have asked for a larger tax rebate in the recommended motion, Meister disagreed, calling the proposed one percent “A gift.”

There was also some clarification requested by councilmembers including Sepi Shyne as to what role the Business Licensing Commission (BLC) could play, and a clarification by City Attorney Lauren Langer the businesses that have received their licenses will need to return to the BLC once a brick-and-mortar foundation is found for them to sign a lease. This would of course especially need to be true if that location is different than they may have identified or aspired to earlier.

Vice Mayor Chelsea Byers expressed appreciation the motion affords council, staff, and stakeholders to “Recalibrate and move forward.” She added she appreciates all of the staff and stakeholder time that has been spent to “Make sure what we’re really doing is bringing forward an industry to support cannabis in West Hollywood that is really ready to meet this next chapter we’re in.”

Mayor John Erickson asked his colleagues if there was “Any appetite to go up to two percent in the rebate?”

“Not at this time for me,” said Heilman, with others suggesting not with body language.

The council voted a unanimous 5-0 to pass the motion, which specifically includes:

• A pause to processing any amendments to the West Hollywood Municipal Code as it relates to cannabis licensing categories and for any variance requests regarding transfer of licenses from January 22, 2024, through July 1, 2024.
• Authorizing the City Manager or designee to negotiate an agreement of up to $50,000 with Emerald Village West Hollywood for marketing and outreach support for local cannabis businesses.
• Authorizing the Director of Finance and Technology Services to allocate $50,000 from unallocated General Fund Reserves to account number 100-3-10-13-533057, Business Retention & Attraction, for marketing and outreach to support local cannabis businesses.
• Adding the direction Heilman proposed to allow staff to use the 60 additional days in negotiation with stakeholders.

Photo by karenfoleyphotography