Are Cannabis Social Equity Programs Working?
- Cannabis Industry

Are Cannabis Social Equity Programs Working?

California Cannabis Industry Association released its report analyzing the health and success of the state’s social equity programs – Report shows local jurisdictions differ greatly in their structure, eligibility, and funding implementation.

SAN FRANCISCO, November 8, 2021 /PRNewswire/ — The California Cannabis Industry Association (CCIA)’s Diversity, Inclusion, and Social Equity Committee (DISE) today released an accountability report to examine the health and success of cannabis social equity programs that have received funding from the State. Initial findings reveal mixed results and suggest a critical need for more state oversight going forward.

Full report available at: https://www.cacannabisindustry.org/accountability-report/

The DISE Committee’s report analyzes the initial seven jurisdictions that received grant funds from the California Cannabis Equity Act in 2018. Jurisdictions include OaklandSan FranciscoLos AngelesMendocinoSacramentoHumboldt, and Long Beach.

Some of the findings include:

  • In Oakland, 90% of respondents said lack of capital is a major problem plaguing their business
  • In Los Angeles, as of October 1, 2021, only 28 of the 200 identified social equity applicants had received temporary approval.
  • In Mendocino, the County has not yet approved any Equity Eligible Applications

“It is vitally important to check on the health and success of local equity programs. Most of them seem to be struggling to fulfill their mission, which leaves social equity applicants out in the cold,” said CCIA Executive Director Lindsay Robinson. “Our Diversity, Inclusion, and Social Equity Committee dedicated several months of research to this project. We hope this report will aid participating local jurisdictions by identifying areas for improvement so that they can address them and strengthen their programs.”

.In the report, the DISE Committee examines local jurisdictions’ administration of their cannabis equity programs – from eligibility criteria to loan components. It evaluates program outcomes, contrasting the number of participants in each program. It also incorporates testimonials obtained by DISE Committee members from cannabis social equity applicants and operators across California. Lastly, the report provides comprehensive policy recommendations to inform lawmakers on strengthening programming across the state.

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The report’s conclusion maintains that greater oversight and accountability are needed at the state and local levels. Local programs differ greatly in structure, eligibility, and funding implementation. This variation – and the absence of a statewide database measuring local program success –makes progress hard to track. In some instances, funds distributed under the Act have not produced successful outcomes in vital areas.

“As one of the several authors of this report, I believe it offers an opportunity to strengthen these local social equity programs,” said Mindy Galloway, CEO of Khemia, a women-owned social equity manufacturing company founded in Sacramento and CCIA’s DISE Co-chair. “My own experiences as a social equity licensee mirror that of many of the people interviewed for the report.  While identifying shortcomings and pain points, we can continue to grow and strengthen these crucial programs.”

One issue mentioned frequently in interviews with social equity applicants and operators was the lack of a consistent definition for “social equity” in California. Another was the lack of “technical assistance” or education on business practices, which is one of the most direct ways to reduce barriers to entry for social equity entrepreneurs. In fact, several interviewees mentioned that the support they received from outside community organizations was the “only lifeline” they had over the past three years.

Using data analysis and information gathered from interviews, the report provides a series of policy recommendations for state lawmakers to ensure that California’s social equity programming works as intended.

Recommendations include:

  1. The establishment of a stakeholder oversight committee made up of equity operators and community members, as outlined in SB 398 (Skinner);
  2. The California Legislature adopted a specific statutory definition for what constitutes a social equity applicant and licensee;
  3. The state provides waivers and deferrals for state licensing and application fees as well as tax relief for the many equity operators who are already paying tens of thousands of dollars in fees, as outlined in SB 603 (Bradford); and
  4. Annual funds allocated toward GO-Biz local equity grants increase proportionally to the California market over time.

“This report identifies why it is so hard to operate in our cannabis economy as an equity business: our equity goals have not translated into reality, only empty promises that are the norm for communities of color,” said Senator Steven Bradford (D-Gardena), the author of the California Cannabis Equity Act of 2018 and the state equity fee waiver and deferral program. “State and local governments have failed so many social equity applicants, despite their history of over-incarcerating and over-policing those same people. This year, the Legislature responded by more than doubling the Cannabis Equity Act grant fund and finally allocating more than $30 million in funding for fee waivers and deferrals. But our state and local partners must use that funding effectively for this to actually work, as this report clearly shows.”

To view the report in its entirety, click here.

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Are Cannabis Social Equity Programs Working?

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