Recent Los Angeles cannabis lawsuit leads to settlement

| Sep 10, 2020 | Business Litigation |

Obtaining a license to open a cannabis dispensary in California can be complicated, especially when the rules surrounding the process are undergoing changes at the time that a business is applying for a license. Sometimes when business owners believe they have been treated unfairly during the licensing process, they decide to sue the local government responsible for administering that licensing process.

Lawsuits of this variety are not always successful, and often the goal is not an outright victory in court, but rather a settlement that allows for a more amenable situation for business owners. This is what happened this month in Los Angeles.

Lawsuit seeks revision of licensing regulations

An article released by Cannabis Business Times covers what happened when three companies owned by ARMLA One Inc. sued the city of Los Angeles over changes to the original cannabis dispensary licensing rules. The plaintiffs, in this case, alleged that their application was revoked due to the proximity of their planned dispensary location to a not-yet-licensed preschool.

This lawsuit ended up being dropped when the city’s regulators amended their rules as part of a settlement agreement. The way dispensary licenses were to be issued was completely revamped; however, the matter did not end there. A separate lawsuit has now been filed alleging that the changes to licensing regulations unfairly benefit the plaintiffs in the initial suit.

Suits and counter-suits

It is not uncommon when a business files a lawsuit against local or state regulatory agencies that another organization fires back with a new suit. This process can quickly become tedious and difficult to navigate and may require the assistance of a business litigation attorney.

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