Pasadena Again Fails to Apply for $3 Million California Social Equity Grant

Last Thursday was a sunny December day in Pasadena. People were out holiday shopping and most were looking forward to some warm SoCal weekend weather.

Yep, Thursday was a generally upbeat day around the city.

But by Friday, the mood of some local would-be cannabis entrepreneurs darkened considerably as the City of Pasadena again walked away from millions in state social equity funds by, well, failing to request them by Thursday’s application deadline. In 2024 the big bucks will, once again, be divvied-up by other California cities.

Perhaps the reason none of the state’s largess will flow locally is because, with not many Pasadena locals wanting to go on the record, it’s about being fair regarding a political and social nightmare.

We’re talking about cannabis and how the war on drugs impacted Black citizens of Pasadena.

When asked, knowledgeable people had varying opinions on what might be holding back the city’s social equity plan.

The first is Pasadena has seen social equity have a rocky rollout since the industry’s early days in Oakland and the fleecing of people who sat on properties in Los Angeles. The suggestion is the city is scared to be another tale of how not to do it. 

“At its July 15, 2021 meeting, the EDTECH Committee, in conjunction with a review of proposed changes to distance separation requirements, recommended to the City Council to consider potential future changes to cannabis regulations to incorporate social equity components. On August 9, 2021, the City Council approved changes to the distance separation requirements for cannabis businesses. In its motion, the Council directed staff to return to the City Council with a recommendation on a social equity program.“

City of Pasadena Ed-Tech Committee Minutes, 8-16-22

The counterargument is that people have learned much about what not to do when it comes to social equity programs over the last decade. Those lessons could be applied to whatever the City produced, giving it a better chance to facilitate an effective program that truly supports the communities most impacted by the war on drugs in Pasadena. 

And make no mistake about it; the drug war was very racist in Pasadena. Statistics indicate there would be no shortage of current social equity applicants.  Per capita, the Black community would have a lot of potential entrepreneurs in its population. As NORML noted in its 2010 review of research at the time, Pasadena’s Black population was only 11 percent of the total population but accounted for 49 percent of the people arrested for marijuana possession. So, in the mid-2000s, Pasadena arrested Blacks at twelve and a half times the rate of whites.

“There was never a war on drugs. There was a war on people of color and the poor.”

The late Councilmember John Kennedy, March 15, 2022

One of the surprising issues for the City’s lack of interest in applying for the millions is the $75,000 social equity report the State funded in Pasadena at the city council’s request. That report by Botec Analysis, sufficiently buried in the minutes of the August 16, 2022 Economic Development & Technology (Ed-Tech) Committee, dropped in the summer of 2022. The city had until December 2022 to make its first go at $3 million the report suggested it might qualify for. That number would have put Pasadena as one of the top state funding recipients.

What could the funds be used for? Here are three types of potential uses according to the California funding guidelines:

• To provide grants, no-interest loans, or low-interest loans to the jurisdiction’s local equity applicants and/or local equity licensees to assist with startup and ongoing costs.

• To provide or fund direct technical assistance to the jurisdiction’s local equity applicants and/or local equity licensees.

• To assist in the administration of the jurisdiction’s local equity program.

Local News Pasadena editors began asking Ed-Tech Committee staff member and Assistant City Manager David Reyes in September 2023 about the status of the grant application, well in anticipation of the grant announcement.  To date, Reyes has not responded, and the social equity issue was not placed on the Ed-Tech agenda this year. 

One SoCal equity insider notes a big hurdle is Pasadena’s lack of an equity ordinance. The city must have one in place to apply for the funding. So, despite the year and a half since having an understanding of what it would take to get the money, there has not been any movement on that crucial step. They also noted this situation spoke to a greater problem with the state’s grant guidelines and the inadequacies of local jurisdictions to approve social equity programs. 

Tim Dodd was the only person to win a Pasadena license in the early going who didn’t go for a quick flip for cash. He is still the CEO/Co-founder of Sweet Flower. While he didn’t have an opinion on the city’s recent lack of action on the subject, he noted Sweet Flower supports the social equity movement. 

“Sweet Flower has always been supportive of social equity in Pasadena, and I believe we are the only cannabis operator to publicly voice our support on multiple occasions at City Hall,” Dodd said, “We remain committed to supporting the city in its program, and we look forward to helping create opportunities in social equity for all Pasadena communities.”

Kaliko Castille, President of the Minority Cannabis Business Association, noted it’s not always people trying to roadblock cannabis progress when the industry faces these kinds of delays, but technology. 

“I guess I could see how bandwidth could be a potential issue, but local governments should see these funds as opportunities to achieve some economic justice for their residents and should be championing this local small business sector,” Kaliko said. 

Luke Scarmazzo is now two months away from celebrating a year of freedom after serving 14 years of a 22-year sentence for operating a medical marijuana dispensary in Modesto. He is the exact type of person for whom social equity programs are designed in the cannabis industry. 

Scarmazzo said of the current Pasadena situation: “To tell you the truth when I see municipalities drop the ball on funding, two questions immediately arise in my mind. One is, did they turn down the funding because it just wasn’t simple or was it something they didn’t want to do? Or is the answer it is something that they looked into and said, hey, look, we’re not going to accept this funding because we don’t know how to build this program out, and we’re gonna waste taxpayers money and accept something that we don’t know how to build?” 

No stakeholders involved in these equity programs have an actual seat at the table to build out these programs.

Scarmazzo pointed to the troubled programs in California and quickly identified one of the main problems, which is that the programs don’t involve anybody who is justice-impacted.  No stakeholders involved in these equity programs have an actual seat at the table to build out these programs.

That being said, Scarmazzo argues there are working programs. He pointed to Sacramento as an example that other municipalities can look to for proof of concept. 

“So you have these examples where they could have tapped in, but they didn’t,” Scarmazzo said, “And now, because they didn’t, they let the funding just drop off. Now you’d have people in those localities that would have qualified, could qualify and now are not going to be able to access the funding that the state wants them to access because the city didn’t do their due diligence and build out the program.”

Scarmazzo’s book on his experiences as a medical cannabis operator and subsequent prisoner drops in January.