Marijuana Business Magazine January 2020

Marijuana Business Magazine | January 2020 16 R eparations for the decades-long war on drugs have morphed into a trend for cannabis industry regulators in multiple states and become an often-contentious focal point on the best way to bolster minority participation in the cannabis industry. To that end, so-called social equity programs either have been adopted or are being considered by scores of local and state governments still rolling out their legal marijuana industry infrastructures. With those systems have come many businesses trying to game the system in order to obtain one or more of the coveted business permits, since the programs typically award several of the limited marijuana business licenses to minority entrepreneurs or non-minorities who were adversely affected by the criminalization of cannabis. So far, however, no social equity program seems to have found the right formula to satisfy stakeholders, and Los Angeles—the biggest legal cannabis market in the world—is a case study in the ongoing trial- and-error process for social equity advocates. 100 Permits Up for Grabs Los Angeles’ social equity program has been full of controversy nearly since its inception, but the most recent episode—since September, city officials have been trying to award 100 cannabis retail permits to qualified social equity applicants— has come under fire from many of the participants and even some elected officials. “If you were to ask me right now, our programs are failing miserably,” California state Sen. Steven Bradford, a Democrat from the south Los Angeles metro area, said during a marijuana industry conference in Long Beach in November. Bradford alleged that many of the social equity license winners “don’t look like California,” and he asserted that wealthy white entrepreneurs are using qualified minorities as “social lubricants, as the front to get other folks in.” Such dissatisfaction mirrors sentiments that have embroiled the city’s social equity program since October, when it was discovered that many of the social equity license winners were not African Americans. Adding fuel to the fire, it also came to light that two of the applicants were able to gain access to the online application system before it opened to all eligible entrepreneurs. That opened the door to criticism of the city regulators, with some stakeholders decrying the process as corrupt. Regulatory Views Cat Packer, the executive director of the L.A. Department of Cannabis Regulation (DCR), has pushed back on such criticism and defended her agency’s performance and integrity throughout the licensing process. “I don’t think our social equity program is failing,” Packer said at the Social Equity Program Flailing in Los Angeles Trends & Hot Topics | John Schroyer Los Angeles is yet another study in how not to roll out a functional social equity program.