By Aaron Kelley, Attorney at Harris Sliwoski

California’s path to cannabis social equity: from arrests to advocacy

Data from the California Department of Justice reveals that nearly half a million individuals were arrested on cannabis charges in the state between 2006 and 2015. Even after Governor Schwarzenegger authorized a statewide decriminalization program in 2010, thousands continued to face serious misdemeanor charges related to cannabis. Despite California’s pioneering legalization of cannabis through Proposition 215 in 1996, just two years after the 1994 Crime Bill, the state legislature’s approach to cannabis legal reform was not as progressive as one might expect. The impact of the War on Drugs during this period was profound, with marijuana possession arrest rates increasing by 124% in 2010, even as rates for other serious crimes decreased significantly.

Proposition 64, passed a few years later, lacked any discussion addressing the damage caused by past policies. However, with social equity becoming a prominent topic in the cannabis industry, California officials have started investing significantly in social equity policies. Initiatives like the California Cannabis Equity Act of 2018 and the Budget Act of 2019 reflected this shift, aiming to support the economic development of communities and individuals adversely affected by previous harsh cannabis policies in what is now a multi-billion dollar industry.

Investing in justice: California’s cannabis social equity journey

In November 2023, California officials finally announced the application process for aspiring social equity business owners via the Cannabis Equity Grants Program for Local Jurisdictions which itself is an extension of Governor’s Office of Business and Economic Development. As the substantial costs of running a fully legal cannabis business in California can often get obscenely expensive, these large grants are meant to fund and lessen the financial burden of these exorbitant costs.

The overall purpose of this multi-million dollar initiative is “to advance economic justice for populations and communities impacted by cannabis prohibition and the War on Drugs by providing support to local jurisdictions as they promote equity in California and eliminate barriers to enter the newly regulated cannabis industry for equity program applicants and licensees,” according to the website. In February of 2023, the Governor’s Office of Business and Economic Development distributed approximately $15 million in social equity-focused funding to 16 different cities and counties throughout the Golden State.

Breaking barriers: California’s social equity initiatives in cannabis

At the end of last month, California officials finally awarded those patiently awaited funds. Funded by a $12 million portion of the billions in tax revenue raised by California cannabis sales, the grants will go to a total of 10 different cities and counties. While most awarded counties reside in Northern California, the city of Coachella also received $350,000 in funding. In particular, Oakland received $3 million and the city and county of San Francisco received over $2 million. “California’s cannabis industry is not just about business; it’s about righting past wrongs. Through initiatives like the Cannabis Equity Grants Program, the state is investing in communities once harmed by harsh drug policies, creating opportunities and economic justice for those affected,” said California Cannabis Attorney Karen Albence.

From prohibition to inclusion: California’s cannabis equity evolution

The possibilities with this funding are nearly endless. Funds will go towards local programs offering technical support, regulatory compliance and assistance. One notable grantee includes San Jose’s Cannabis Equity Business Academy. Social equity advocates have even more progress to celebrate, as the Governor’s Office of Business and Economic Development and Governor Gavin Newsom’s new budget proposal would invest $15 million further in similar programs by October of 2024.

Although it has taken a while for these programs to be created and even longer to be implemented, we are hopeful for this new era. This $12 million in local, social equity grants is a drop in the bucket, considering the damage that was done. But a drop is better than an empty bucket. With substantial investments and ongoing support, California is starting to pave the way for a more equitable and inclusive cannabis industry– one where all individuals, regardless of background, have the chance to participate and succeed. As the state continues to allocate resources and expand such programs, the future holds promise for further progress in achieving social equity within the California cannabis landscape.

Reprinted with the permission of Harris Sliwoski