CCIA Report Examines Health and Progress of California’s Cannabis Social Equity Programs

An examination of cannabis social equity programs by the California Cannabis Industry Association (CCIA)’s Diversity, Inclusion, and Social Equity Committee (DISE) has revealed the need for greater state and local oversight.

DISE analyzed seven jurisdictions that received grant funds from the California Cannabis Equity Act in 2018. These include Oakland, San Francisco, Los Angeles, Mendocino, Sacramento, Humboldt, 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 have received temporary approval

● In Mendocino, the County has not yet approved any Equity Eligible Applications

Most of these social equity programs “seem to be struggling to fulfill their mission, which leaves social equity applicants out in the cold,” according to 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.”

Problems include the absence of a concrete definition for “social equity,” the lack of a statewide database to gauge program success, and little technical guidance for applicants on how conduct a successful cannabis business.

“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), author of the California Cannabis Equity Act of 2018. “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.”

The report provides policy recommendations for lawmakers who wish to strengthen these social equity programs. The recommendations include:

1. Establishing a stakeholder oversight committee comprised of equity operators and community members, as outlined in SB 398 (Skinner)

2. Establishing a specific statutory definition for what constitutes a social equity applicant and licensee

3. New waivers and deferrals for state licensing and application fees as well as tax relief for equity operators as outlined in SB 603 (Bradford)

4. Ensuring that annual funds allocated toward GO-Biz local equity grants increase proportionally to the California market over time

“At its core, social equity is about restoring power to communities unjustly harmed by the War On Drugs,” the report concludes. “Where that War weaponized cannabis to strip people of their liberties, the generational wealth provided by cannabis entrepreneurship fosters new opportunity, and the freedom to stay in the cannabis industry and monetize the value they created. Where the State once used cannabis to oppress, it is now in a position to use it to emancipate. Thus, the program needs these reforms to ensure that it continues to rectify the wrongs of yesterday in an industry where nobody knows what tomorrow holds.”

Read the report here.