LA Social Equity Advocates Fear Regulators are Paying Only "Lip Service" to their Concerns in the Licensing Process

Supporters of social equity in the cannabis space attended a meeting of the LA City Council on Friday, March 8th, to advocate in favor of policies that benefit the communities of color disproportionately affected by the War on Drugs. At stake are the remaining cannabis business licenses that will be issued and overseen by the Department of Cannabis Regulation (DCR) under Phase 3 of LA’s regulated cannabis market rollout.

The Council voted to move forward with drafting the ordinance that will initiate the Phase 3 licensing process — a timeline considered too hasty by a number of social equity advocates who have been engaged with councilmembers and community members in the ongoing conversation around who should be awarded licenses, what kind of funding should be made available to help social equity applicants, and numerous proposed amendments around the issue.

According to the DCR’s definition, the social equity program seeks to promote “equitable ownership and employment opportunities in the cannabis industry in order to decrease disparities in life outcomes for marginalized communities and to address the disproportionate impacts of the war on drugs in those communities.” It’s meant to provide licensing assistance, fee waivers, and priority processing, among other things, for cannabis entrepreneurs from low income backgrounds and communities of color. The city has devised a tier system to prioritize different kinds of social equity applicants.

Arturo Flores, a recent graduate of UCLA and a Marine Corps veteran of the wars in Iraq and Afghanistan, is planning to apply for a cannabis license under Phase 3. He’d like to see small business owners in neighborhoods like East LA, South LA, Boyle Heights, and the San Fernando Valley have a shot at making a living in the new, regulated market. Flores says he’s in it to help “make sure that the communities devastated by the War on Drugs are not left in the dark, that they don’t miss the opportunity to build generational wealth.”

After attending the vote on Friday, Flores told Civilized that, while the language coming out of City Council is encouraging to minority applicants and advocates of social equity, he has yet to see decisive action and adequate budgeting around this issue. “The lip service is there,” he said, “but the substance isn’t.”

Small Victories

In the Friday meeting, City Council voted to crack down on illegally operating cannabis businesses by cutting off their utilities — a move that buoys the prospects of legally-run businesses in the city while also proving a touchy and racially-charged subject. Historically, people of color have been incarcerated at much higher rates for cannabis-related offenses, and despite some of the promises of Prop 64 (which legalized adult use marijuana in California), many people of color are either still imprisoned, or possess criminal records that have not been expunged. Consequently, the relationship between law enforcement and emerging canna-business owners of color is a sensitive one. For his part, Flores does support the city’s efforts to curb illegal businesses because they unfairly compete with business owners who follow through with the onerous application process. Enforcement must be nonviolent, says Flores, and offenders must be charged civilly, not criminally.

Another positive development at Friday’s meeting involved an amendment to Phase 3 that was removed. Activists like Flores considered the amendment predatory, because it allowed for social equity applicants to be bought out by large investors after three years. It takes time — often three to five years — for small businesses to start turning a profit, and some say that the amendment would have set social equity cannabusiness owners up as “straw men” holding the licenses for the ultimate benefit of corporate interests.

The Council voted last year to allocate $250,000 to the social equity program — funds that could be used to help with technical assistance in the application process and could also provide grants for people in low-income communities for whom the fees involved in licensing would otherwise be too steep. However, that money has not yet been disbursed.

Felicia Carbajal, a long-time community organizer in the cannabis space who helps businesses develop corporate social responsibility models, also attended the meeting in hopes of slowing down the Phase 3 process to prioritize social equity concerns. Carbajal, who came from an impacted community but no longer lives in one, and who is also speaking this week at SXSW on the topic, Can We Heal Ourselves from the War on Drugs?, believes that a more compassionate model in the regulated market that includes public/private funding for education as well as reinvestment in the most impacted communities is needed. Carbajal comes from one of the impacted communities and is not in this fight because they are seeking a cannabis license. Carbajal told Civilized, “I want to see the best market thrive in the best city in the world. It’s part of my job as a citizen on this planet.”

Social equity advocates from across the United States have formed the Equity First Alliance and have written an open letter on what the cannabis industry and governments can do to promote reparative justice and representation. Within a few days, the city of LA is expected to open up the Phase 3 licensing process, and Kristen Lovell, an activist who is also doing PR for the social equity campaign, believes that the decisions and outcomes in LA’s new cannabis market will have worldwide repercussions. “The entire world is looking at us right now,” Lovell told Civilized. “How are we treating black and brown people?”

A meeting is scheduled on March 19th between Cat Packer, executive director of the DCR, and Latinx leaders to further discuss the Phase 3 rollout.

Pictured above: Gabe Guzmann (Latinos for Cannabis), Kristen Lovell (The Social Impact Center), Felicia Carbajal (Smart Pharm Research Group, The Social Impact Center), and Fanny Guzmann (Latinos for Cannabis) observing the chamber meeting; photo courtesy of Davide Laffe (@davidelaffe), shared with permission from The Social Impact Center

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