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The California Cannabis Industry Association (CCIA)’s Diversity, Inclusion, and Social Equity Committee (DISE) today published an accountability report that examines the success and health of the state’s cannabis social equity programs. The findings suggest that more oversight from the state will be crucial moving forward. The report analyzed the initial recipients of grant funds from the California Cannabis Equity Act in 2018. This included Oakland, San Francisco, Los Angeles, Mendocino, Sacramento, Humboldt, and Long Beach. 

Local jurisdictions differed greatly in structure, eligibility, and funding, but shared at least one common denominator: all the programs are deeply flawed. In Oakland, 90% of the respondents reported a lack of capital as a major problem for their business. In Los Angeles, only 28 of the 200 identified social equity applicants had received approval as of October 1st, 2021. Mendocino had yet to approve any equity applicants at the time of the report. 

“We hope this report will aid participating local jurisdictions by identifying areas for improvement,” said CCIA Executive Director Lindsay Robinson, noting that most local equity programs are struggling to fulfill their missions. 

THE DISE Committee examined local jurisdictions’ administration of their cannabis equity programs, looking at everything from eligibility criteria to loan components. The report evaluates program outcomes in contrast with the number of participants in each program. DISE Committee members obtained testimonials from cannabis social equity applicants and operators across the state and included them in the report. The report also provides comprehensive policy recommendations to inform lawmakers and strengthen the state’s programs  

The report makes it clear that greater oversight and accountability are necessary at both the local and state level. In some cases, funds distributed under the act have not produced success in critical areas. Interviewees frequently noted that it’s an issue that there is no consistent definition for the term “social equity”. Additionally, interviewees pointed out the lack of technical assistance or education on business practices, which is one of the most direct ways to reduce entry barriers for social equity entrepreneurs.

The new report uses data analysis and information gathered from interviews to provide a series of policy recommendations for state lawmakers, with the goal of ensuring the state’s social equity program works as intended. 

The recommendations include: 

  • The state should establish a stakeholder oversight committee composed of equity operators and community members, as outlined in SB 398 (Skinner)
  • California Legislature should adopt a specific statutory definition for what constitutes a social equity applicant and licensee.
  • The state should provide waivers and deferrals for state licensing and application fees, along with tax relief for the equity operators already paying thousands of dollars in fees, as outlined in SB 603 (Bradford).
  • Annual funds allocated toward GO-Biz local equity grants should increase proportionally with 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.”

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