New Year’s Update on California Cannabis Social Equity Program

department of cannabis control

A new year marks a turn of a page and in many cases that turn of a page can make a difference for many. In California that change of year now means The Department of Cannabis Control (DCC) is accepting equity fee waivers from businesses that meet certain eligibility standards

Equity Fee Waiver  Eligibility must meet the following criteria:

The cannabis business must meet the following criteria: 

Equity ownership: individuals who meet the equity criteria must own 50% or more of the business

Gross revenues: the business has a gross revenue of $1.5 million or less per year. If a new applicant has an expected gross revenue of $1.5 million or less for the first year.

Equity owners must meet at least one of the following criteria:

Cannabis conviction or arrest: the owner was convicted or arrested for a cannabis offense before November 8, 2016

Household income: the owner’s household income is less than or equal to 60% of the 

Area Median Income for the local jurisdiction where they live.

Neighborhood: the owner lived for at least five years between 1980  and 2016 in a neighborhood disportionately impacted by the War on Drugs. 

Now, moving on to the specifics of The City of Los Angeles and what the status is with licensing and social equity in a city that has so far failed to meet its expectations and hundreds of social equity applicants are tied up in red tape and have not opened their cannabis businesses. Los Angeles’ marijuana licensing and social equity might be in for another round of major changes

Some of the possible changes include:

  • “Extending the timelines for social equity applicants to file paperwork or even refile their entire applications.
  • Changing definitions, including “owner,” in city statutes to conform with state law.
  • Allowing social equity applicants to change locations while retaining their chance for licensure.
  • Creating an “expedited” licensing process for applicants who can afford to pay higher fees.
  • Tweaking the definition of “undue concentration” for retailers to allow more businesses in certain city neighborhoods.
  • Allowing multiple social equity applicants to aggregate their “shares” in the majority ownership of a single business.”

Regarding social equity businesses specifically: In September, City Councilman Marqueece Harris-Dawson introduced a formal motion to update the ordinance that governs cannabis business permitting in L.A. as well as the social equity program. DCR Executive Director Cat Packer tweaked the ordinance in her response for possible changes.

The possible tweaks Packer hopes the Los Angeles City Council agrees to are: 

  • “Allow all social equity applicants to resubmit their business license applications within one year if their application was deemed “abandoned.”
  • Establish new fees and timelines for applicants to accelerate the licensing process.
  • Allow both applicants and existing licensees to relocate within select parts of the city.
  • Give social equity applicants additional time to review their “equity share documents outside of the temporary approval process.””

“Many of Packer’s proposals garnered a letter of support from the Social Equity Owners and Workers Association (SEOWA).”

The motion is pending in four committees so whether Packer’s suggestions will go into effect remains to be seen. 

Author: Sherri Margolin (Dark Matters)

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