Earlier this week, Los Angeles opened a two-week window for “Social Equity” applicants to apply for retail cannabis licenses. The city will accept applications until September 17, and ultimately plans on awarding 100 new licenses. Criteria to qualify as a Social Equity applicant are based on income, residence in a “Disproportionately Impacted Area,” and prior cannabis arrests or convictions. If the city verifies an individual as a Social Equity applicant, then s/he will be eligible for priority license processing and various business support services.
L.A. voters overwhelming passed Measure M in March 2017, which was designed to create opportunities for Social Equity applicants to enter the cannabis industry and address social inequities in the commercialization of cannabis. According to the ordinance, “[i]n order to appropriately acknowledge and address the harmful impacts of past Cannabis policies and their enforcement, the Social Equity Program is aimed at promoting equitable ownership and employment opportunities in the Cannabis industry. This program is intended to decrease disparities in life outcomes for marginalized communities and to address disproportionate impacts of Cannabis prohibition in adversely-impacted and lower income communities.”
After passing in 2017, L.A.’s Social Equity program has been very slow to get off the ground. In March 2019, the city announced that it had defunded most of the $10 million set aside for the Social Equity program to cover the L.A. Police Department’s overtime. That is consistent with a concerning trend in the broader industry; according to a recent article in Bloomberg, the cannabis industry is losing its initial diversity as venture capital and larger corporations enter the space. In 2015, 36% of cannabis executives in Colorado were women, while two years later that figure declined to 27%. Further, according to a study conducted by Marijuana Business Daily, more than 80% of cannabis businesses are owned by Caucasians, compared to less than 6% by Latinos, less than 5% by African Americans, and less than 3% by Asian Americans.
We will file these recent developments under “better late than never.” It is good to see L.A. implement its Social Equity program, and we will continue to monitor the fight for social justice in cannabis here on our blog.