L.A.’s Cannabis Market Is Cracking. Now City Leaders Say They’re Finally Ready to Fix It

Los Angeles helped shape the early legal cannabis economy, a cultural hub, a brand engine, a magnet for operators who wanted to build the future. But today, insiders say the city has become one of the hardest places in the country to operate.

After years of shifting rules, enforcement confusion, high fees, and a licensing process that many describe as “bureaucracy first, business second,” operators are leaving. And city leaders are finally acknowledging it.

At IgniteIt’s Market Spotlight: California event, cannabis journalist and San Diego State University professor Jackie Bryant set the tone.

“Eyes are on California.. and when people say that, what they really mean is eyes are on L.A.”

Bryant moderated a panel with Councilwoman Imelda Padilla, Los Angeles’ Sixth District, and Jazmin Aguiar, founder and CEO of Creatrix Management Group, who has worked on legalization policy in Colorado and Mexico.

Aguiar, born and raised in Los Angeles, returned to her hometown in 2015, expecting to jump into a thriving cannabis market. Instead, she walked into chaos.

“We were at the time battling through Measure N and Measure M,” she recalled. What followed were years of uncertainty and adjustment.

“Department of Cannabis Regulation has been operational since 2018, and since its inception, it has been going through a lot of regulatory changes,” Aguiar said. “Initially, it started with a very robust regulation, which was really wrapped around bureaucracy because the Council was scared of what cannabis could be in the city of L.A., and that created a lot of barriers.”

Councilwoman Padilla did not argue the point.

“People don’t know what to do with new things,” Padilla said. “There was just a lot of fear of something very new and something that they didn’t want to engage with the state to let it thrive.”

Operators say that fear showed up in real ways: layers of licensing steps, slow processing, unclear enforcement priorities, and a thriving unlicensed market.

But Padilla says that change is finally happening.

“We’re being very intentional about talking to LAPD and the city attorney about enforcement,” Padilla said. “I just introduced the motion to bring back the neighborhood prosecutor program to case-manage, closing out the illegal shops.”

The city is also studying what license categories to prioritize next, including cultivation, and preparing for consumption lounges and cannabis events.

Even with reform on the horizon, operating in Los Angeles remains financially brutal.

“L.A. has been very unwelcoming to operators and to the industry that used to thrive in the city. Rents are high, fees are high, taxes are high, so these margins are eating up these businesses,” Aguiar said. “As much as I talk to industry leaders and they do want to be in L.A., they’re forced to go do business elsewhere.”

The question is not whether Los Angeles was once the epicenter of cannabis; it is whether it can be again.

This article originally appeared on IgniteIt and is syndicated here with permission.

Photo by Lucas van Oort on Unsplash

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