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What is the California Cannabis Equity Act?

Farmer growing hemp and checking plants growth, agriculture and environment concept

California has been leading the charge in both advancing the commercial and medicinal marijuana industries as well as rectifying the damage done by years of marijuana prohibition. Legislators and civil rights advocates rightly demand measures aimed at fixing the harm caused particularly to disadvantaged communities by cannabis prohibition. A bill signed into law in 2018 known as the California Cannabis Equity Act aimed to repair some of the decades of harm done by the failed “war on drugs.” Continue reading to learn about the law, and call a seasoned cannabis business law attorney with questions about the cannabis industry or for help setting up a recreational or medicinal marijuana business.

California Enacts Law Meant to Encourage Underserved Communities to Build Out the Cannabis Industry

Senate Bill 1294, known as the California Cannabis Equity Act and signed into law in late 2018, established a state-run program intended to widen participation among marginalized and economically disadvantaged communities in the marijuana industry as either employees or business owners. The law set up a state program to assist municipalities with equity ordinances in providing loans, grants, and other assistance to cannabis entrepreneurs around the state. The law originally created a $10 million appropriation fund to which local jurisdictions could apply.

The funds from the grants are meant to be used for business loans, capital improvements, regulatory compliance, waivers on licensing fees, technical assistance, and administrative costs. Equity applicants in the covered jurisdictions include those living in underserved communities as well as individuals who have been directly impacted by harsh drug prosecution in the past.

According to Senator Steven Bradford, the bill’s author, the Act “recognizes the failed efforts of the war on drugs, but more importantly, it highlights the disproportionate devastation cannabis criminalization has had on communities, and helps address the harms by reducing barriers to licensure and increasing opportunities for employment.” Other bill sponsors explained that “access to capital and technical assistance are crucial for anyone wanting to create a business in this space. Unfortunately, persons most harmed by cannabis prohibition and generational poverty often lack the support needed to be successful.” The Act is a first step in addressing these inequalities.

Since the passage of the Act, many cities around the state have established local equity programs for their licensing and permit processes. Equity applicants in San Francisco, for example, can obtain a cannabis distribution permit without paying the $5,000 fee as well as benefit from incubator partnerships that provide rent-free space for several years while they get their business off the ground. Other cities that have created equity programs in light of the Act include Sacramento, Oakland, Los Angeles, Long Beach, Fresno, Palm Springs, as well as the counties of Humboldt, Lake, and Mendocino. The state has provided well more than the initial $10 million allocation to municipalities seeking to build out their local equity programs.

Applicants in these cities can benefit from a variety of relaxed fees and assistance programs to aid in building out a successful cannabis enterprise. A cannabis business attorney can walk you through the application process and help you maximize your potential benefits.

Call a Knowledgeable California Cannabis Business Lawyer for Help With Your Marijuana Business

If you are interested in setting up a cannabis business or are dealing with regulatory, tax, licensing, or other legal issues with your hemp, CBD, or cannabis business in Los Angeles or Southern California, call McReynolds Vardanyan, LLP, in Glendale at 818-855-2115. Our California cannabis business lawyers will work with you to get your budding business off the ground efficiently, effectively, and legally.

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