Los Angeles might restrict who can lodge appeals when marijuana businesses get city licenses, blocking challenges from people who do not live, work or own property nearby.
The controversial idea was tucked into draft rules that would lay the groundwork for what is widely expected to be one of the hottest marijuana markets in the country — a burgeoning industry could pump more than $50 million in tax revenue into city coffers next year.
Under the proposed rules, which had been heavily shaped by the office of City Council President Herb Wesson, L.A. would allow appeals only from the business applicants themselves or "occupants, stakeholders, or property owners who reside or own property" within 500 feet.
Wesson staffers said that wording was meant to include people who live, work or own property within that 500-foot radius.
"It just didn't make sense to me that somebody in San Pedro would appeal something on Crenshaw Boulevard in my district," said Wesson, who represents areas including Mid-City, Koreatown and parts of South L.A.
In addition, some groups might try to appeal every cannabis business that was approved, "because of the sensitivity of the issue," Wesson said.
Elsewhere in California, pot businesses have faced challenges from marijuana opponents and rival shops vying for spots in a competitive market.
But critics have been outraged by the proposed restrictions, arguing that the city should not freeze out people farther away from appealing. Neighborhood activists say the rules would exclude people who live just blocks away, parents whose children go to religious services or activities in the area, and others with valid concerns.
"It's flat-out unfair, and there's no justification for it," said Doug Haines, a Hollywood resident and neighborhood council member who has challenged planned real estate projects. "Five hundred feet is less than a block."
Councilman Jose Huizar raised the issue at a Monday hearing, pointing out that anyone can challenge many other kinds of businesses that need special approval from the planning department, including bars or liquor stores. Huizar later said the proposed restrictions would be "arbitrary and inconsistent" with how the city handles similar decisions.
After Huizar and others raised questions about limiting appeals, Wesson said Thursday that he wasn't wedded to the idea. Five hundred feet had been suggested, he said, because when there is a public hearing on a business or development that requires city approval, the city typically notifies property owners and residents within a 500-foot distance.
"If people want everybody all over the world to appeal, I don't have a problem with that," Wesson said. "But the individuals affected should take a lead in saying yes or no."
L.A. does restrict who can challenge a "density bonus" that allows more units at buildings that provide some affordable housing, limiting appeals to people who live or own property next door or across the street, according to planning officials.
Wesson spokeswoman Caolinn Mejza said that beyond the planning department, appeal requirements "are inconsistent across the different departments."
Under the proposed rules, marijuana businesses will file their applications with the newly formed Department of Cannabis Regulation.
Wesson said he had not been lobbied by the marijuana industry to include the proposed restrictions. Industry groups, which have flooded recent hearings on the draft regulations, have not spoken out publicly about the idea. Southern California Coalition, which represents cannabis businesses, said it had not taken a position on who should be able to appeal.
As California cities prepare for the legalization of recreational marijuana sales, pot businesses have faced opposition from drug warriors and their fellow cannabis companies. In San Diego, which has capped the number of cannabis businesses allowed in each part of the city, some marijuana shops have lodged appeals against their rivals.
"We saw a very cutthroat mentality of applicants appealing one another," said Kimberly Simms, an attorney who represents cannabis businesses in Southern California. In addition, Simms said, "you could just be a person who hates marijuana … and oppose every application. I kind of like this idea that L.A. requires some sort of tie to the community."
L.A. is not planning to cap the number of marijuana businesses, but has proposed zoning restrictions that limit where they can operate, which could spur stiff competition for available land.
Huizar said that even if marijuana companies try to use appeals to sabotage their rivals, the draft regulations set a brisk schedule for how quickly they must be filed and heard. Under the proposed rules, appellants must file within 15 days of the city decision, and the appeal must then be heard within either 15 or 60 days, depending on the kind of marijuana business involved.
Huizar said the city may get frivolous appeals, but "the tradeoff is well worth it …. I'd rather go on the side of allowing for possible meritorious claims."
Laura Lake, a board member with the advocacy group Fix the City, said the proposed restrictions were "profoundly undemocratic" and argued that community members might feel the negative impacts of a marijuana business beyond the proposed 500-foot radius for appellants. Mike Eveloff, another board member, contended that the current wording of the proposed restrictions would limit appeals even more sharply than Wesson staffers had indicated, requiring "stakeholders" to own property or live within 500 feet.
The proposed rules will go to the City Council for a vote before city attorneys draft the regulations, which will then come back to lawmakers for final approval. Wesson stressed that the proposal is still evolving as people weigh in on the complex rules about where and how marijuana businesses can operate.
"It's not like I've written this in rock," Wesson said.