You need to resolve the licensing issue before you attempt to assign the license again.

Scenario: Licensing Issue

1. You attempt to assign a license in Azure to several users and receive the following error message: "Licenses not assigned. License agreement failed for one user."

2. You verify that the Azure subscription has the available licenses.

Solution:

License cannot be assigned to a user without a usage location specified.

Some Microsoft services aren't available in all locations because of local laws and regulations. Before you can assign a license to a user, you must specify the Usage location property for the user. You can specify the location under the User > Profile > Settings section in the Azure portal.