Name: Is the Los Angeles cannabis industry in crisis?
Uploaded: 2026-02-04T09:06:10.000Z
Duration: 5 min 17 s
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The superlative

As we know, Louisiana has one of the biggest cannabis markets in the country, but

Modal verbs - A2

many licensed business owners are saying they can't make ends meet.

To-infinitive

So why are the legal shops struggling to survive while the illegal ones thrive?

Yeah, a lot of people upset about this one.

We're joined live in Studio by LA's correspondent, Jordan Running.

Jordan, thank you so much for being here and kind of breaking this down for us.

This is a huge industry, especially here in California.

Many legal pot shops, they're actually struggling to stay afloat.

I mean, it's not easy for these business owners.

And so there is a lot of consumption here in LA County.

There's almost a million pounds of cannabis is consumed every year.

And so of that, though, about 60% is going to illegal shops.

So the legal shops, they have to fight for this, the competition of just market pressures.

But then they also have to deal with the fact that these illegal shops aren't paying taxes, they're paying lower, lower leases on their properties.

And so they have to charge more, which is pushing, again, a lot of these consumers to go to the illicit shops.

Okay, so the city was supposed to be using millions of dollars in grant money to help the legal business owners, but

Right, so there's a lot of things that went on here.

First of all, it took a long time for this money to get to the business owners.

So a program was started in 2017 initially that was supposed to help specifically people from black and brown communities who had been criminalized by the War on drugs in the past.

And so this program, although it was created in 2017, the first money didn't actually go out, and

the first licenses didn't get applications until 2019.

The first money didn't go out until 2021, according to some of these business owners.

And so during this time, a lot of these business owners were actually paying rents on properties that they had to acquire in order to apply for their licenses.

So this is driving these business owners into debt, and

they're just trying to do it the right way, the legal way, and they're getting basically screwed over.

So they have to deal with, like I mentioned before, these market pressures that illegal companies don't have to deal with.

And then also I talked to quite a few of these business owners who said they've been receiving more law enforcement attention than the illegal shops.

So one in particular said that they had been raided, or I shouldn't say raided, but

Had the state police come in to collect taxes several times in a few months.

You know, I want to talk a little bit more about this audit because you found, you know, uncovered a lot.

What were some of the bigger findings that you found?

That you're like, wow, I was not expecting that.

So there were two separate audits that took place by two different state organizations.

One of them found that the city of Los Angeles may have misspent up to $10 million, or I shouldn't.

So they found that the state had potentially misspent money.

The city itself found that that money could be up to $10 million.

And so that has been in the budget and included in this most recent budget year.

And there was a separate audit that found that some of this money that was intended to go directly to these social equity businesses in the form of grants, loans, and

direct assistance that that money wasn't actually provided as the grant agreements intended.

Okay, so the city is saying that it's giving legal help and support to these businesses.

The business owners clearly don't feel like that's enough.

And so the city, they say that they are providing legal support.

They told me that they provide up to 10 hours of free legal support and 30 hours of low bono or cheaper legal support.

But I was talking to some of these business owners, and

they said that's not enough to really cover if they needed to file a lawsuit, which they have had to do in the past already to cover a few different things that have come up in this process.

Yeah, there definitely needs to be something, because, I mean, these business owners go through so much, and

we all know, we hear about these stories with small businesses and all that they go through.

And when you feel like the city's not helping you or the state's not helping you, that's.

I mean, what do you think needs to be done from here?

So there's a few different things that these business owners are really calling for right now.

And one of them is stronger enforcement on these illicit businesses.

And nobody's calling for a return to what had been happening in the war on drugs, but

just at least an equal enforcement against these businesses that can give the legal businesses a chance to really compete in the market.

Another thing is potentially lowering fees and taxes on these businesses.

There was recently a motion put forward in the City Council by Councilmember Emil the Padilla that would look into decreasing the city's tax rates on cannabis and potentially move towards a model like Oakland has where these social equity businesses and businesses that take in less income, they might pay less in their taxes.

All right, a lot of insight here, Jordan.

We're going to send everyone to your full article because you've really looked into this.

Thank you for being with us this morning, guys.

To read that article, you can head over to LAS.

You can just check out our website, kcalnews.com and click Seen on TV.

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Is the Los Angeles cannabis industry in crisis?

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