Cannabis Social Equity Overview And Importance

The Evolution of Cannabis Social Equity Programs in California: Progress, Challenges, and the Future

Introduction

Cannabis social equity programs were designed to right the wrongs of the War on Drugs by providing opportunities for individuals disproportionately impacted by cannabis prohibition. Since the passage of Proposition 64 in 2016, California has encouraged cities to implement these programs to support minority entrepreneurs and communities affected by over-policing. While these initiatives have had significant positive impacts, challenges remain.

History of Cannabis Social Equity in California

The Origins of Social Equity Initiatives

The Adult Use of Marijuana Act (AUMA) legalized recreational cannabis but also highlighted the deep disparities in arrests and convictions among Black and Latino communities. Recognizing this, state and local governments introduced social equity programs to provide business ownership opportunities to those disproportionately affected.

The state’s Cannabis Equity Grants Program (administered by GO-Biz) has allocated millions in funding to support local initiatives. Cities like Los Angeles, Oakland, San Francisco, and Sacramento have taken unique approaches, each with varying degrees of success.

Social Equity in Sacramento: A Local Perspective

Sacramento’s Cannabis Social Equity Program

Sacramento, a key cannabis hub in Northern California, launched its Cannabis Opportunity Reinvestment and Equity (CORE) Program in 2018. The program aimed to provide financial support, licensing assistance, and business training to individuals from communities disproportionately targeted by cannabis enforcement.

Successes in Sacramento’s Equity Program:

The city has provided $5.6 million in grant funding to help equity businesses get started. The program offers technical assistance, mentorship, and workforce training for aspiring cannabis entrepreneurs and local dispensaries and delivery services owned by equity applicants are growing, offering more diversity in Sacramento’s cannabis market.

Challenges Sacramento Faces:

• Real estate barriers: High costs for compliant cannabis properties have made it difficult for equity applicants to secure locations.
• Licensing delays: Some applicants have faced long waiting periods, limiting their ability to operate.
• Funding gaps: Many equity businesses still struggle to secure capital beyond city grants.

Key Social Equity Programs in California

Los Angeles – A Slow but Growing Program

Los Angeles established its Social Equity Program (SEP) to provide priority licensing, fee waivers, and business development assistance. However, slow rollouts and bureaucratic inefficiencies left many applicants in limbo. Some were forced into unfair partnerships with well-funded investors who took advantage of their licenses.

Oakland – The Pioneer in Social Equity

Oakland was the first city in the U.S. to create a cannabis social equity program. The city offered grants, low-interest loans, and a unique incubator program where established cannabis companies were required to support an equity business.

San Francisco - The Golden Gate to Reform

San Francisco’s Equity Program focuses on fee exemptions, fast-tracked licensing, and technical assistance. However, sky-high real estate costs and difficulties accessing capital make it tough for equity businesses to survive. Not to mention the condition the city has headed towards since COVID.

Michigan

Michigan, particularly in Kalamazoo, has made tremendous efforts in advancing social equity within its cannabis industry. The state’s Social Equity Program offers significantly reduced fees for individuals with prior cannabis convictions and those from disproportionately affected communities. Kalamazoo has been at the forefront, actively supporting social equity businesses and ensuring they have the resources to thrive in the competitive cannabis market.

Along with these trouble spots they are advocating to improve, they have also taken great leaps towards reducing the costs of certain products within stores that are way over budget.

How Buddy Supports Cannabis Social Equity

While new to the industry, Buddy is positioning itself as a vital tool for equity businesses.

• Digital Marketplace Access: Many equity businesses struggle to reach consumers and buddy’s platform aims to help dispensaries and small businesses expand their customer base through online orders and in-store pickups.
• Consumer Awareness: By featuring equity-owned brands, buddy provides visibility to businesses that otherwise might struggle against corporate-backed competitors.
• Financial Accessibility: buddy’s platform eliminates some overhead costs through these features that can sometimes burden new businesses, allowing them to focus on growth organically.

As Sacramento and other cities continue refining their social equity programs, technology-driven solutions like buddy can help level the playing field for small and minority-owned cannabis businesses.

The Future of Cannabis Social Equity Programs

Despite their challenges, cannabis social equity programs are evolving. Increased funding, better regulatory support, and stronger oversight of partnerships will be key factors in their success.

Predictions for the Future:

• Expanded State Funding: California is expected to allocate more money to support social equity initiatives.
• Improved Legal Protections: Cities may enact stricter regulations to prevent equity applicants from being exploited by investors.
• Federal Legalization Impact: If cannabis is legalized federally, more funding and grant opportunities could emerge, strengthening equity businesses in cities like Sacramento, Los Angeles, and Oakland.

Wrap It Up: Cannabis social equity programs have made a meaningful impact, but their long-term success depends on the process and the execution. With the right support, funding, and technology, equity businesses can thrive and help create a more inclusive cannabis industry in Sacramento and beyond.