LA looks to increase lease options for “social equity” pot shops

Proposal facilitates relocation of disadvantaged cannabis tenants

Biko's Timeka Drew (Illustration by The Real Deal with Getty)
Biko's Timeka Drew (Illustration by The Real Deal with Biko and Getty)

Disadvantaged cannabis shops in Los Angeles are now barred from packing up their pot and moving to better digs across town.

But that could change with a new rule proposed by the city’s Department of Cannabis Regulation to allow “social equity” cannabis companies greater access to Los Angeles real estate, Bisnow reported.

The problem: The city’s social equity cannabis licensing program now prevents businesses from moving to new locations as they see fit. Such pot shops are tied to specific community plan areas for new locations and to the sites they chose when they applied for permits.

The program’s pot dispensaries “are trapped at locations with unfavorable leases or at locations that may limit the success of their business,” a DCR report reads.

The social equity program is open to applicants who have had a cannabis arrest or conviction, who are low-income or who live in an area disproportionately impacted by the war on drugs.

Timeka Drew, founder of Biko, a social equity cannabis supplier based in Torrance, was awarded a social equity retail storefront license in Los Angeles and is working to expand in her community plan area of Southeast L.A, according to her firm’s website.

“The only landlords I can even talk to are those within my community plan area,” Drew told Bisnow at an event this fall. “There is nothing forcing any landlord in my community plan area to even rent to me to begin with, let alone give me a reasonable deal for my lease.

“It makes it incredibly difficult to make sure that I can establish myself in a way that’s going to make sense over time.”

Sign Up for the undefined Newsletter

The city’s cannabis regulator has proposed a measure to allow Drew and other social equity pot business owners to move to any community plan area that hasn’t already hit its limit for that type of cannabis business.

The idea is that there may be better real estate locations and better lease terms, with a larger pool of suitable sites citywide.

Any new dispensary location would still have to comply with cannabis zoning laws, which say how far they must be from certain locations such as schools.

The proposed amendment went before the city’s Planning and Land Use Management Committee on Nov. 1. The committee recommended allowing social equity applicants to relocate, but would leave out licensees. It still has to go to the City Council for a final vote.

Its approval could make it easier for such businesses to get funding.

“Another part of it is just your attractiveness to partners,” Drew told Bisnow. “It’s a lot harder when you’re coming to them and saying, ‘I’m stuck in this community plan area, I can’t find a compliant property, can you help?’”

— Dana Bartholomew

Read more