San Diego is trying to infuse social equity into the cannabis industry by creating a network of local growers and dispensaries. The city hopes to create more opportunities for those in low-income communities who may not have access to capital or resources.

The San Diego city council has passed a proposal to infuse social equity in the cannabis industry. This will be done by creating a program that provides training and education for people who have been previously incarcerated or are currently incarcerated.

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Many advocates recognized that the War on Drugs had unfairly affected communities of color throughout the state when California legalized cannabis for adult use in 2016. It was, in fact, one of the selling elements of Proposition 64, which was passed a year later and put into effect. 

Social equity programs have sprung up across the state in recent years, based on the belief that the ballot initiative didn’t go far enough to give special privileges to Black, Brown, and low-income people who had been arrested and thrown in jail for nonviolent cannabis-related offenses and thus barred from participating in the new industry. 

According to a study performed by Marijuana Business Daily in 2017, approximately 80% of the founders and owners of cannabis companies were White at the time. 

San Diego’s city and county governments don’t have a social equality program in place, but officials from both claim they’re working on it. They’re late to the game, to say the least. 

But, given that other California towns have attempted and failed to rectify the inequities they previously recognized, this isn’t always a bad thing. Social equality initiatives have been characterized as detrimental to the same individuals they were intended to assist in certain areas. 

When legalization took effect, Prop. 64 enabled local governments to retain authority. Adult cannabis sales are now allowed in San Diego and neighboring cities such as Vista and La Mesa, but sales, distribution, manufacture, and cultivation are still prohibited in the county’s outlying regions.

That will change in October, when the county’s Board of Supervisors is scheduled to implement a countywide cannabis law that was approved by a 4-1 vote in January. The specifics of how that would work in reality are still being worked out, but a social equality clause is expected to be included in the ordinance. 

The San Diego County Cannabis Stakeholder Group has been asked to participate in the development of a countywide cannabis social justice initiative. Appellate court attorney Andrea St. Julian, the group’s facilitator, said the ordinance should make mending the harm caused by the War on Drugs the front and center issue in a debate that usually begins with land use rules. 

“You really have to start with social justice issues when you start drafting cannabis laws and regulations,” St. Julian added. “Then there’s the issue of cannabis companies’ worries, cannabis consumers’ concerns, and, of course, the concerns and requirements of the whole community. So a cannabis ordinance is critical for reorienting government officials and their thinking about how to craft cannabis.”

San Diegans for Justice co-chair Andrea St. Julian speaks during a news conference in June about the city’s proposed legislation creating the Commission on Police Practices. Adriana Heldiz’s photo

These programs vary in their structure depending on where they are implemented, but they typically involve providing expedited licensing, tax breaks, or other incentives to businesses run by people of color, especially those who may have been criminalized due to previous cannabis dealings when things were less legal. As part of their efforts to provide social justice in the cannabis sector, local governments have established internship, job apprenticeship, and mentoring programs. 

Entire towns, like as those in Humboldt County, are primarily made up of growers and sellers who functioned in what is often referred to as the “traditional market” — the illicit or unlicensed industry that existed before legalization and continues to this day. The state has provided extra social equity funds to such areas in order to assist offset the high expenses of operating a legal cannabis company in California. 

The allocation of these monies, like legalization, amounts to the state admitting that the War on Drugs was in many respects incorrect. These initiatives have monetary advantages, but they also have symbolic value for individuals who were persecuted by the authorities for trafficking a product they feel should have always been lawful. The current legalization route indicates they were correct all along.

In principle, San Diego County is an excellent location for social equity initiatives since it is home to two groups who might benefit directly: a large number of pre-legal market producers and sellers, as well as communities of color in East and South Bay.

Officials intend to bring in an outside expert to assist develop the county’s social equity program, which will be managed by the county’s Office of Equity and Racial Justice, according to Emily Weir, deputy director of public policy for County Supervisor Nathan Fletcher. 

According to Weir, the county has issued a request for proposal for services linked to the social equality initiative, and the consultant should be chosen shortly. She also said that the county would soon conduct an assessment of five current legal dispensaries in unincorporated regions to ensure that they are included in future mentoring and internship programs that will be supported by the county.

While many cannabis industry stakeholders, as well as those creating policy surrounding the sector, have deemed the inclusion of social justice initiatives to be critical, they have not always been effective when implemented.

The city of Los Angeles’ implementation of a social equality program has been slow and bogged down in bureaucracy, harming the very individuals it was supposed to assist. The so-called initiative came to a stop due to a lack of sufficient personnel and financing, impeding company owners’ capacity to operate their companies efficiently. 

Others claim that the program makes individuals of color and those with criminal histories targets for predatory investors who have easier access to money, allowing them to further manipulate the system and basically skip the line. In such cases, all that is required is for one employee to satisfy the social equity criterion, and the whole company qualifies. As a consequence, programs may unintentionally steer resources to individuals and companies that would not otherwise fit those criteria.

Another frequent complaint of equity programs is that they don’t do enough to address the high expense of licensing to operate a legal cannabis company, which is one of the most significant obstacles to entry in the cannabis sector in general, much alone for people affected by the War on Drugs. Mentorship and internship programs are beneficial, but they do not offer immediate funds. Many would-be cannabis entrepreneurs would not be able to start their own company without it.

Despite being one of the biggest metropolitan regions in the nation, San Diego is in the unique situation of establishing a cannabis program later than other major population centers in California.

Weir said that the county had the advantage of being late to the game. “We may learn from other jurisdictions that have taken a more gradual approach to cannabis regulation, which many of the early adopters of cannabis policy did not have. If we emphasize social justice from the outset of the ordinance development program, we can design a far more complete and successful program.”

The chairman of the Board of Supervisors, Fletcher, has made racial justice and equality a priority, and cannabis policy was included in his “Framework for the Future.” 

Although cannabis sales, production, and cultivation have been allowed in San Diego since January 2018, the county’s Office of Equality and Racial Justice has been in contact with the city, which is also attempting to establish an equity program.

Even though the city authorized cannabis sales, production, and cultivation years ago, Sammi Ma, the city’s Cannabis Business Division project manager, said a long bureaucratic procedure has delayed the city’s establishment of an equity program.

“The California Cannabis Equity Act of 2018 was created by Senate Bill 1294,” she said. “The State’s Department of Cannabis Control (previously the Bureau of Cannabis Control) introduced the social equity award to assist local authorities in the spring of 2019, only a year later. The Cannabis Business Division (CBD) of the Development Services Department had not yet been formed at the time. The CBD prioritized applying for the State’s equality grant when it was established in November 2020, and it was granted four months later in March.”

The program has not yet been developed, according to Ma, but the city is conducting an equity assessment that “will provide a data-driven analysis of the historical impacts that cannabis criminalization has had within the city, assess potential opportunities and constraints in the current regulatory framework, and ultimately provide policy recommendations to ensure equity and diversity in the city.”

Meanwhile, the county claims it is still doing research, talking with other jurisdictions such as Los Angeles, San Francisco, and the city of San Diego to see what worked and what didn’t in their own initiatives. One of the key lessons, according to Weir, is that a social justice program must be in place before business licenses are issued and the broader law is implemented. 

She said, “We are presently on pace to accomplish exactly that.” 

Meanwhile, industry watchdogs like St. Julian are keeping an eye on things. 

“It’s still too early to say whether the county is on the right track,” she added. So far, the county’s comments have heartened her, but she is worried that no specific measures have been set out. St. Julian expressed her hope that the county’s “actions would match their words.”

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