SB 1294: California’s Cannabis Equity Act of 2018

Cannabis’ illegal status at the State and Federal level has had a devastating long-term impact on individuals who were convicted of cannabis offenses as well as on their families and communities. Over the past 40 years, the War on Drugs led to countless individuals being labelled criminals for simple possession and other cannabis-related convictions that would carry little to no criminal consequences under California’s new regulations. Unfortunately, the consequences arising from these convictions fell disproportionately on socioeconomically disadvantaged communities.

While there was hope that legalization would offer economic opportunities to individuals and communities afflicted by past disproportionate criminal enforcement of cannabis laws, the industry’s burdensome capital and compliance requirements have resulted in little to no opportunities for socioeconomically disadvantaged communities to tap into the cannabis industry and its booming market.

Fortunately, several jurisdictions, such as Los Angeles, Long Beach, and Oakland, have implemented Equity Programs which give priority licensing and assistance to disproportionately impacted individuals who meet the jurisdiction’s Equity Program parameters, many of which include prior cannabis convictions. These programs have been launched with varying degrees of success and until now they have relied on funds raised internally through licensing fees, business taxes, business partnerships, and donations.

In September 2018 California’s governor approved SB 1294, which allows California to provide funds to local equity programs that offer assistance to equity applicants and equity licensees. Eligible equity programs and respective jurisdictions must submit an application to the Bureau of Cannabis Control (BCC) for a grant to assist in their equity program. Once the program is awarded a grant, all of the funds must be used to assist local equity licensees to gain entry to, and to successfully operate in, California’s highly regulated cannabis market.

Unfortunately, SB 1294 is not a landslide victory for potential social equity business owners, as it still imposes the requirement that local jurisdictions and/or their citizens implement an equity program that meets the state’s requirements for funding. Disadvantaged communities and their citizens may lack the funding and wherewithal to develop the equity programs required to receive additional funding.

California’s decision to approve grants to local equity programs is intended to offer disproportionately impacted individuals an opportunity compete in one of the world’s largest cannabis markets; however, the state’s requirement that local municipalities develop a program before awarding any funding seems to put the proverbial cart before the horse. The passing of SB 1294 and  AB 1793, which requires the state to dismiss many previous cannabis convictions, both indicate that California is trying to help create opportunities for socioeconomically disadvantaged communities. It remains to be seen whether or not these programs can deliver on their lofty intentions.

Green Consulting Partners recognizes the importance of the Cannabis Equity Act and similar efforts to even the playing field within an industry that largely caters to big money investors. We are proud to work with aspiring cannabis entrepreneurs from all backgrounds, including those eligible for social equity licensing benefits. Green Consulting Partners is happy to express our commitment to social justice and equity initiatives by offering reduced licensing and compliance services to social equity applicants in qualifying jurisdictions.

California Cannabis Legislation Links:

AB 1793: Overturning Prior Cannabis Convictions

AB 2020: Cannabis Event Licensing

AB 2215: Cannabis for Pets

AB 2402: MJ Consumer Information

AB 2721: Cannabis Testing Laboratories

AB 2914: CBD & THC Infused Beverages

SB 1409: Commercial Hemp Cultivators

SB 1459: California Provisional Cannabis License