The Great Cannabis Crunch

cannabis crunch

We are in unprecedented times or so it seems.  The country is in a bit of a labor shortage. People are quitting jobs at record rates. Basically saying “F-it” to work. 

In other words, we are living in what labor economist Lawrence Katz calls “a once-in-a-generation ‘take this job and shove it’ moment” – which gives workers a once-in-a-generation upper hand.

On October 8, 2021 The Bureau of Labor Statistics reported that the country gained just a paltry 194,000 jobs in September falling short of the 500,000 payroll estimate. There is a trend being dubbed as the Great Resignation as people are quitting jobs in droves since the pandemic started. 

The feeling is there is more to life than killing oneself on the job and not being able to come up for air and perhaps  still not being able to pay the bills. 

The potential of this cultural moment is not limited to the 2.9% of the workforce who have quit their jobs in the past few months. As CEOs scramble to maintain retention rates, those who have kept their jobs can express solidarity with resigning workers and contribute to the cultural shift by slowing the pace of productivity.

In 2020, 80% of US workers reported feeling that they have too many things to do and not enough time to do them – a phenomenon known as time poverty. This isn’t just in our heads: a 2014 Gallup poll revealed that US workers clocked in an average of 47 hours a week, with more than 18% working over 60 hours a week. It would be naive to attribute these statistics to the industrious spirit of the American worker, considering that full-time minimum wage workers cannot afford an apartment in any state in the US without taking on another job.

No industry is untouched by this staffing shortage and the cannabis industry is no exception. The Department of Cannabis Regulation (DCR) in Los Angeles is feeling this staffing crunch as they struggle to keep up with all the cannabis licencing responsibilities in the city. In 2017 the city council of Los Angeles adopted a commercial cannabis regulatory program that established the Department of Cannabis Regulation to administer all cannabis licensing responsibilities in the City ” with one of its most important jobs to launch the cannabis social equity program”: the largest program of this type in the country. Now four years later they are backed up and understaffed.  

A motion  to the DCR by members of the city council contends that staffing is not the only problem. 

Although the COVID-19 pandemic and related staffing shortages have limited DCR’s licensing capacity to some extent over the last year, the City should not ignore extensive feedback from stakeholders, Social Equity Applicants in particular, that current licensing procedures and practices at DCR may be causing unnecessary and extended delays. Social Equity Applicants have consistently complained about waiting months for DCR to process simple modification requests.. As a result, they are unable to obtain a state license until DCR completes the change. Such delays are inexcusable.

Dozens of other complaints about licensing delays received by the City Council and the Cannabis Regulation Commission have reflected similar issues with DCR’s procedures. Stakeholders report waiting months to receive basic licensing responses from DCR; that hundreds of critical license modification requests remain unprocessed, many almost a year after submission; that licensing procedures are constantly changing and difficult to navigate; and that applicants are delayed for months at a time waiting for DCR to issue invoices for nominal sums. Most concerning, Social Equity Applicants have repeatedly shared that they believe DCR is actually the greatest impediment to their success.

In response to the complaints in the motion Cat Packer, the Executive Director of the DCR, issued a lengthy report to the city council. “ Of interest is the item from page 4 which addresses the staffing shortage. 

Despite this progress, the City has experienced substantial delays in administering parts of the City’s cannabis procedures, including a lack of necessary staff and resources, a steady flow of administrative and legal challenges, continuous but often necessary amendments to cannabis laws at the state and local level, and inefficiencies that are the result of the policy itself. For example, despite steady and increasing support from the City, DCR continues to lack sufficient resources. DCR has experienced personnel challenges that have hindered its ability to administer some processes and prevented DCR from administering other processes in a reasonable amount of time. For example, the Department had a total of three personnel when it began accepting applications for commercial cannabis activity from approximately 200 Phase 1 Applicants. Similarly, the Department only had 12 licensing staff at the time the City Council instructed it to open P3RR1 by September 2019. Although DCR has expanded its personnel to a total of 30 staff, 11 of whom are dedicated to the licensing section, critical vacancies remain and existing personnel challenges have only worsened by the COVID-19 Pandemic and related City mandated hiring and contract freezes. Since the City’s hiring freeze was lifted in July, DCR has been aggressively seeking to fill all its vacancies to address licensing delays.”

Cannabis Defense and Licensing Attorney, Allison Margolin, had this to say about the situation, “we love working with the DCR. I am a great fan of Cat Packer. They are working to the bone and I actually don’t know how they have the resilience to perform the tasks that no other city agency or administrative body performs. In addition to processing at least 200 renewals for Phase II businesses the DCR is also reviewing hundreds of delivery applications and scrutinizing them for compliance with the spirit of the social equity program.”

The advocacy group Americans for Safe Access stepped in with a letter to the Planning and Land Use Management Committee and the City Council requesting that the DCR be provided with whatever tools it needs. 

Will the DCR be able to find the staff it needs?  In a Case Study Conducted By: Chris Nani & Austin Slutsky  extensive delays in the process have placed undue hardships amongst applicants

With the resources and staff I can’t help but think that the DCR would be able to process the applications in a more timely manner. There are workers out there to choose from. It’s in the city’s best interest to look. What is good for the cannabis industry is good for the city. 

To be sure, a labor shortage is good news for people out of work and looking for a job. And there are several signs that suggest the labor shortage may be temporary, Thomas Lee, managing partner and head of research at Fundstrat Global Advisors, wrote in recent note.

Author: Sherri Margolin (Dark Matters)

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