Yes, it is possible for a pending or granted LPFM applicant or permittee who no longer wishes to use their allocated channel to request a dismissal or cancellation of their application or permit as part of a settlement agreement. This can be done with the aim of making way for another mutually exclusive (MX) applicant to be granted access to that channel. However, the specifics of such a request and its approval would depend on the regulatory procedures and policies of the relevant authorities, such as the Federal Communications Commission (FCC) in the United States.
It can be a bit intricate, but when an application or permit is voluntarily dismissed or canceled, the facility is promptly removed from the database. This opens up the opportunity for another facility to propose operation on that channel or in a manner that doesn't infringe on the spacing requirements of the previous facility.
On the other hand, if the application is involuntarily dismissed, it stays in the database for a minimum of 45 days, as it awaits any potential Petitions for Reconsideration. During this period, the channel won't be available for other proposals or usage.