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Social Equity Individual Applicants (SEIAs) / Sell Ownership Interests / Individual or Entity / Los Angeles Municipal Code (LAMC) / Section 104.20

Council File 26-0791

Under review — the city council has approved the concept of letting social equity cannabis owners sell their stakes more freely, but the Department of Cannabis Regulation's final ordinance language is still being reviewed by committee before a full council vote.

Introduced
2026-05-27
Last changed
2026-08-13
Status
open
Expires
2028-08-12
Committee
Government Operations Committee
Mover
IMELDA PADILLA
Second
ADRIN NAZARIAN

Brief

Councilmember Imelda Padilla introduced a motion to amend Los Angeles Municipal Code Section 104.20 to permit Social Equity Individual Applicants (SEIAs) in the cannabis regulatory program to sell their ownership interests. The motion was adopted by City Council on June 10, 2026, by a 13-0-2 vote, with amendments by Councilmember Blumenfield. The Department of Cannabis Regulation subsequently submitted implementation documents in August, now under review by the Government Operations Committee.

Full summary

This file addresses ownership transfer rules within Los Angeles's cannabis social equity program. Social Equity Individual Applicants are cannabis license holders from communities disproportionately impacted by prior cannabis enforcement. Councilmember Padilla's motion, seconded by Councilmember Nazarian, directs the Department of Cannabis Regulation to amend LAMC Article 4, Chapter X to allow SEIAs to sell their ownership interests to any individual or entity — a significant loosening of existing restrictions that previously limited transfers only to other qualified social equity applicants. The Department framed the change as a response to a contracting cannabis market and the chronic capital access problem facing social equity licensees, who, because cannabis remains federally illegal, cannot tap traditional startup financing or banking. The Department of Cannabis Regulation's August 2026 report lays out four specific code amendments. First, a new Social Equity License Conversion category would allow a social equity annual license to be converted to a general annual license one year after issuance. Second and third, SEIAs would be permitted to transfer any portion of their equity share — up to 100 percent — to any person, again after a one-year holding period. Fourth, existing social equity license holders could fall below the current 51 percent equity share requirement after one year and still remain in the social equity program, as long as one or more SEIAs collectively retain at least a 20 percent equity stake. Licenses dropping below that 20 percent threshold would lose social equity status and the associated program benefits, such as fee waivers, legal services, and educational resources. The one-year holding requirement is central to the proposal's anti-exploitation logic. DCR argued it would deter rapid license flipping while still giving licensees a meaningful exit path. To further protect participants, the Department also recommended requiring SEIAs to attest that they consulted a social equity coach, lawyer, or other professional before submitting an ownership modification request, and requiring repayment of any grant-funded fee waivers received within the prior 12 months before a license conversion is processed. The motion cleared the Government Operations Committee on June 2, 2026, and the full Council adopted it as amended by a Blumenfield-Padilla amending motion on June 10 by a vote of 13-0-2. DCR submitted its detailed report and a proposed redlined ordinance on August 12, 2026, which were referred back to the Government Operations Committee on August 13. The file remains open and pending in committee as DCR's proposed ordinance language awaits further committee review and eventual return to the full Council for a final vote.

Activity (9)

  • 2026-08-13 Department of Cannabis Regulation document(s) referred to Government Operations Committee.
  • 2026-08-12 Document submitted by Department of Cannabis Regulation, dated August 12, 2026.
  • 2026-06-12 Council action final.
  • 2026-06-10 Council adopted item as amended, subject to reconsideration, pursuant to Council Rule 51. Amending Motion (Blumenfield - Padilla)
  • 2026-06-10 Council adopted item as amended by Amending Motion (Blumenfield - Padilla), subject to reconsideration, pursuant to Council Rule 51.
  • 2026-06-05 City Clerk scheduled item for Council on June 10, 2026.
  • 2026-06-02 Government Operations Committee approved item(s) .
  • 2026-05-29 Government Operations Committee scheduled item for committee meeting on June 2, 2026.
  • 2026-05-27 Motion referred to Government Operations Committee.

Documents (9)

Council votes (1)

  • 2026-06-10 Adopted as Amended — 13-0-2 · Regular

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