WeHo wants faster pipeline for cannabis businesses

West Hollywood’s City Council on Monday looked at how the city’s cannabis program could facilitate license holders in getting their establishments up and running, an often arduous and time-consuming process which has kept some businesses languishing on the back burner.

Many approved developments are locked in a bureaucratic limbo, and City Hall is struggling to get a grip on the unwieldy situation.

“Do we even know if some of those companies still want to move forward?” asked Councilmember Lauren Meister.

In November 2017, the city adopted its cannabis ordinance, allowing for eight licenses across five different cannabis categories, including adult use retail, medical dispensaries, consumption by smoking or vaping, consumption by edibles only, and delivery services. The most recent amendment to the cannabis ordinance occurred in February, allowing for temporary cannabis events.

There are currently nine cannabis businesses operating in WeHo, covering a total of 21 licenses, with some businesses holding multiple licenses. Additionally, the report mentioned 13 pending applications, covering 16 licenses, and three waitlisted businesses with three different licenses. Of the 13 pending applications, three were expected to open in the fall of the current year, five in 2024, and the remaining five in 2025.

CURRENTLY OPEN BUSINESSES

City Hall is now working on amendment to address the deadlines for businesses. Given the challenges some businesses were facing in terms of opening and navigating the development review process, staff intends to present the proposed changes to the cannabis ordinance within the next three months to provide more flexibility and support to businesses.

Councilmember Lauren Meister raised questions about the criteria for granting extensions to businesses. Danny Rivas explained that the criteria included evaluating the progress made by the business, such as plan submissions and ongoing communication with city staff. The absence of progress, indicated by a significant gap in plan updates, could lead to a denial of an extension. Meister also questioned businesses requesting extensions without having secured a lease, which Rivas acknowledged as a valid concern but emphasized that plan submissions and progress were key factors in granting extensions.

Regarding the waitlisted businesses, Meister inquired about efforts to determine their continued interest in moving forward. Rivas explained that meetings were being scheduled to confirm their intentions, and if contact could not be established by October, further action would be considered, including possible policy adjustments or ordinance amendments.

Councilmember John Heilman expressed concerns about the outdated waitlist and the potential need for a new process or conclusion of the current waitlist.

“I don’t want anyone who’s on the wait list right now to panic,” Heilman said. “But at some point, the applications from 2018 are not really going to be considered current.”

Rivas acknowledged the need to address this issue and proposed discussing it with the city attorney’s office to determine the appropriate course of action.

The discussion also touched on the forthcoming changes related to AB 374 and the city’s willingness to support businesses in their expansion efforts.

During Public Comment period, Genevieve Morrill, CEO of the West Hollywood Chamber of Commerce, expressed the hope that the cannabis industry would eventually become less of a topic for discussion as licenses are renewed. Morrill mentioned legislative changes at the state level, including a bill from Northern California that could impact consumption lounges and the sale of food and beverages. She stressed that extensions should be granted to businesses actively pursuing opening, with clear criteria differentiating between TI and ground-up development.

In Progress/Pending (Construction, Permits/Licenses, Etc.)

“We’re not asking for any extensions for anyone who has not already or is not is sitting on a license,” Morrill said. “We’re only asking for those who actually are taking stages to open.”

Mayor Sepi Shyne initiated the councilmembers’ discussion,emphasizing the need for clarity regarding staff’s objectives and expectations from the council.

Meister emphasized the importance of establishing concrete criteria to determine what constitutes progress for cannabis businesses. She proposed that businesses must have a lease or property ownership to demonstrate real progress. Meister stressed the necessity of setting up clear and objective milestones to avoid subjectivity in evaluating progress, concurring with Erickson’s support for an extension, especially for ground-up construction projects.

She also suggested that businesses on the waitlist should be contacted and given a limited timeframe to respond, indicating their seriousness about starting operations. She requested that the forthcoming report provide specific details about the challenges faced by businesses not yet open.

Waitlist

Councilmember Chelsea Byers expressed her concern about ensuring that businesses on the waitlist are prepared and ready to commence operations promptly upon receiving notice. She proposed the idea of implementing a “next-in-line” notification system to ensure that businesses don’t remain dormant after receiving an 18-month notice.

“Ideally, this ordinance would be updated to have a trigger before that 18-month notice would come to their door that they’re next in line for that,” Byers said.

She remained open to the idea of a three-year extension but sought a clear understanding of what constitutes “significant diligent progress.”

Erickson echoed Councilmember Meister’s call for a well-defined understanding of “sustainable progress.” He expressed support for a two-year extension with the possibility of an additional one-year extension, which would be evaluated on a case-by-case basis. Erickson highlighted the timeline for potential business openings, suggesting that a decision should be made in late December based on the progress made by businesses scheduled to open in 2023 and early 2024.

“Because if these applicants are actually true to their word, we’ll see three businesses off of this yellow list,” Erickson said. “And I think that that would show us that these businesses are not just waiting around on these licenses. I believe that they want to get it done. I see PleasureMed on the East Side working like a dog (to open).”

Mayor Sepi Shyne sought legal advice from the city attorney regarding potential liabilities related to the waitlist. In terms of timing, she leaned towards a three-year extension, coupled with an option for businesses to approach either the Business License Commission or the Planning Commission to seek two additional six-month extensions, depending on the circumstances.

The council agreed to revisit the matter and make decisions based on the progress of businesses scheduled to open in late 2023 and early 2024.

No BLC Approval (Forfeit of License)