Selling marijuana for recreational use has been legal in California since January. However, Los Angeles has been slow to roll out all the steps required to build a fully functioning legal industry. The second phase of LA’s licensing process began this month – nearly six months behind schedule – and while the city has received more than 230 applications so far, no licenses have been approved as of yet.
This portion of the application process is reserved for supply chain businesses – growers, manufacturers, and others, but they must also qualify for L.A.’s social equity program, an attempt by the city to balance the scales of the industry.
“The social equity program was really born out of the city’s commitment to addressing the harms that individuals and community members had experienced by way of the War on Drugs or past criminalization of cannabis policies,” said Cat Packer, executive director of the city’s Department of Cannabis Regulation.
Throughout the ‘70s-born War on Drugs, Latinos and African-Americans (among other minorities) have been arrested and prosecuted for cannabis crimes at much higher rates than their white counterparts. According to LAPD data, black residents make up just 9 percent of LA city’s total population, yet they accounted for 40 percent of cannabis-related arrests between 2000 and 2017. Whites, meanwhile, make up 28 percent of LA’s population, but only accounted for 6 percent of cannabis arrests.
However, now that marijuana is legal, many of the companies reaping the profits are owned by white people. In fact, some call the social equity program a form of reparations.
It’s a system designed to help people like 25-year-old Bryan Garcia. Previously charged with three felony counts, including possession of marijuana with intent to sell, Garcia was sentenced to more than a year in county jail and almost lost custody of his child.
“At the time I was 19 years old and you can just imagine how that affected the rest of my life, you know?” he said.
Since his release, Garcia was able to get his convictions reduced and dismissed through a provision of Proposition 64, which legalized marijuana. He went to work for a solar power company and quickly climbed the ranks before quitting to focus on building a legal, family business from the medical marijuana collective he started in San Bernardino County.
Now, he’s hoping to qualify for the social equity program. Criteria generally include; whether applicants have been arrested or convicted of a cannabis-related crime; if they’re classified as low-income; and, if they live in one of the neighborhoods identified by the city as being disproportionately impacted by the War on Drugs. This includes neighborhoods like Watts and the Crenshaw community.
Newcomers to the marijuana market need help overcoming huge barriers to entry, like finding affordable property and accessing loans, as traditional banks won’t work with cannabis companies because the drug is still federally illegal.
In an attempt to help equity applicants weather the transition, LA’s program does include an incubator-model option. An established business can partner with an equity candidate serve and serve not only as a mentor, but provide them with resources, like free commercial space. This allows the incubator businesses to cut in line, and offers some sort of start-up capital to equity entrepreneurs.
Still, while many agree the program’s heart is in the right place, it’s lacking one crucial thing: money.
“In order to actually see the social equity program succeed, we need to have designated funds,” said Fanny Guzman, co-founder of Latinos for Cannabis, a group working to get more Latino and minority representation in the industry. “Currently, the city has not put anything in place.”
Packer of the Dept. of Cannabis Regulation doesn’t dispute the fact that there’s no funding earmarked for the program as of yet. It’s something the City Council and the Mayor’s office are working on, she said, looking locally at unallocated city funds, and at the state level, at a proposed bill that could earmark funding for local social equity programs throughout California.
Regardless of finances, by giving equity applicants priority in what is typically a first-come, first-serve system, they’re still getting a huge advantage, said Packer.
Regardless of assistance, industry veterans like Amir Gresham, a cannabis distributor who may apply for a license through the social equity program, said he’s used to the stress of the business.
“If you think becoming a legal business even with priority processing and getting licenses is a challenge, try operating as an illegal business when you could on any given day have 10 to 20 pounds in your car and you could potentially go to jail,” he said.