While Ed-Tech Fiddles, Social Equity Funds May Go Up in Smoke…Again

Members of the City of Pasadena Ed-Tech Committee are Tyron Hampton, Chair (District 1); Jessica Rivas (District 5); Steve Madison (District 6); and Jason Lyon (District 7).

We’ve been writing since last year about how Pasadena has overlooked a $3 million State of California Cannabis Equity Grant funding available to cities. Pasadena City Council’s Ed-Tech Committee did not prioritize the program and apply for funds despite having received a $75,000 state-funded cannabis social equity planning grant in 2021 to develop the program.

Next month, the RFP for this grant, which helps local cannabis entrepreneurs, will again be available for cities across the state. The deadline for submission is in December. We requested a comment about the status of the grant application with the City’s Public Information Office.

“We currently do not have policy direction to move forward with this type of grant,” was the reply. 

The Ed-Tech Chairperson, Councilmember Tyron Hampton, was also asked if the Committee provided any reasons for not considering the grant.

We received a one-word reply, “Nope.” 

Regional programs are currently outpacing Pasadena in securing grants

While Pasadena’s Ed-Tech committee members contemplated the expansion of local noodle shops at their recent meeting, we reached out to proximal cities that have been recipients of the Cannabis Equity Grants funding, some for many years.

Long Beach’s Valencia Maria Romero, Manager of Cannabis Oversight / Assistant to the City Manager, replied to our inquiries.

“Since 2019, the City of Long Beach has been a recipient of grants from the Governor’s Office of Business and Economic Development (GO-Biz). This funding supports the City’s Cannabis Equity Program in the areas of direct grants and direct technical assistance for our verified equity applicants, as well as staff to administer the program,” she said.

“The funding formula is pretty simple: 80 percent for direct grants, 10 percent for direct technical assistance, and 10 percent for staff to administer the program. The California Cannabis Equity Act grants local authority to jurisdictions to design their equity program based on the needs of each community. Hence, you may find similarities across each program, but every jurisdiction’s experience is unique,” she concluded.

“The City of Sacramento was awarded $1.25 million in grant funds from the program, with a city match of $750,000, bringing the total funding for the current grant cycle (April 1, 2024 – October 31, 2025) to $2 million,” said Julie Hall, Media and Communications Specialist in the Office of the City Manager for the City of Sacramento.

Guillermina Carranza, Principal Public Relations Representative from the Department of Cannabis Regulations for the City of Los Angeles, recounted LA’s social equity receipts and also commented, “In 2021, the LA DCR distributed a total of $6 million to over 200 Social Equity Applicants and Licensees directly from the grant for local jurisdictions. In 2022, they disbursed $5 million through the SEED Rental Assistance Grant program, and 181 social equity entrepreneurs have received $5,545,195 in grant funding thus far. To date, the Social Equity Program has disbursed a total of $13 million in direct financial support to equity entrepreneurs.

“Los Angeles has some of the most robust history with the program, verifying in 2019 over 1600 Social Equity Individual Applicants who are allowed to participate in the programs, including licensing opportunities and training. Additional program benefits are outlined on their Web site and include:

• Business, Licensing and Compliance Assistance Program managed by the Social Equity Program
• SEED Rental Assistance Grant Program
• Pro/Bono Legal Services Program
• Fee Deferral Program“

What are the advantages realized by applicants who received the grants? 

In Long Beach, direct grants help cover start-up costs like rent / lease payments, local licensing and regulatory fees, legal assistance, furniture, fixtures, and equipment and capital improvements.

In Sacramento, Hall said these funds “are disbursed in four installments, with the first installment already received and allocated to grantees. All funds from the GO-Biz grants are directed to the Cannabis Opportunity Reinvestment and Equity (CORE) program, which supports community members in growing their cannabis businesses. Eligible expenditures for these grants include rent and capital improvements, testing and regulatory compliance, staff training and business planning, and marketing for both the CORE businesses and the CORE brand. Approximately 52 percent of the initial disbursement of funds supported CORE members with retail businesses. The remaining 48 percent supported non-retail businesses, such as manufacturing, cultivation, and other related activities.” 

Did their office help applicants with economic development plans / strategies and implementation? 

“Yes,” said Long Beach’s Romero. “Direct Technical Assistance is available to equity applicants in the areas of site location and lease negotiation, business planning, finance / accounting, and regulatory compliance support. These are the areas of most need as identified by our equity applicants. This assistance is provided by contracted City consultants specializing in the areas mentioned above. We take an educational approach to Direct Technical Assistance to help best our equity applicants to acquire the knowledge and / or skills necessary to start, sustain and grow a viable cannabis business in Long Beach.” 

“Funds are only issued to verified equity applicants who are applying for a cannabis business license under a Limited Liability Company (LLC) or Corporation (INC).  We do have a Cannabis Equity Employment program, but it is funded by City funds (not state grants).”

What other measurable impact did the funding have? For example, did the funding help other departments (police, economic development or revenue generation) for the city / county?  

Romero again commented. “In terms of internal impacts, the funding has helped cover the costs of two full-time Cannabis Equity Program Specialists in the Economic Development Department. The funding for staff was pertinent to developing the program and continuing to sustain it in the long term.” 

She continued. “The development and ongoing administration of the program has required support from the City Manager’s Office, the Economic Development Department, and the Financial Management Department. To qualify for the GO-Biz grant, the City initially had to complete a cannabis equity assessment and adopt an Equity Program ordinance under Chapter 5.92 of the Long Beach Municipal Code. We were very intentional about creating a direct grant program that is both equitable and accessible to all equity applicants in the program (currently 166). The structure of our grants program is intended to provide funding upon reaching key milestones of the cannabis licensing process.”

And the benefits to Long Beach businesses?

“The direct grants are intended to offset a portion of the costs associated with opening a cannabis business. Equity applicants are strongly encouraged to identify other sources of capital, such as private investors. And the educational approach is super important to us as our equity applicants must understand the challenges of opening and sustaining a cannabis business. Direct grants are helpful, but they are merely temporary. The knowledge and business acumen that is retained through Direct Technical Assistance is key to sustaining their business in the long run. 

We are consistently looking for new ways to improve the program through feedback from our equity applicants,” Romero continued. “For example, our direct grants program was restructured back in early 2022 from a one-size-fits-all approach to one that recognizes that every cannabis business is different and, therefore, the amount of grant funding awarded is dependent upon the type of cannabis activity being conducted and the size of the cannabis facility. We have also learned that it is crucial to award funding to equity applicants upfront to help them secure a location for their cannabis business. Hence, we created a grant that helps offset the costs of the security deposit and up to 12 months’ rent / lease payments while the applicant is undergoing the licensing process. 

The inevitable question of cannabis pardons and expungement as a function of social equity 

Since 2022, the Biden administration has tried to lower the rhetoric around our national consumption of cannabis to get rid of the harsh penalties and normalize its use. Like so many things these days, the feds could be doing more, not just to decriminalize ganja but to legalize it. Without federal action, cannabis regulation falls to the local level, where states are slowly coming around. There are varying degrees of acceptance of legality, medicinal use, decriminalization, or a fat doobie combo of all. However, in Idaho, Nebraska, South Carolina and Wyoming, weed is still fully illegal.

In a recent CNN interview, (D) Maryland Governor Wes Moore reported on the 175,000 cannabis convictions that he recently pardoned. California officials have cleared an estimated 200,000 marijuana-related convictions, with additional legislation in 2022 expanding the pool of expungement relief by 34,000.

“We now have the largest mass pardon in US history for misdemeanor cannabis charges. We actually brought everybody around the table. We had law enforcement, activists, community members and people involved in the industry. Everybody had a seat at the table. So, for anyone wondering how you go about doing this or whether this is a good thing. I think you should do what we did in Maryland – listen to your people, and they’ll tell you the right direction.” 

Pasadena’s Legal Cannabis Dispensaries

Rise Dispensary
https://risecannabis.com/dispensaries/california/pasadena
908 E. Colorado Blvd., Pasadena 91106

SweetFlower – Pasadena
https://sweetflower.com/pasadena-dispensary/shop
827 E. Colorado Blvd., Pasadena 91101

Varda Dispensary
https://www.vardadispensary.com
3341 E. Colorado Blvd., Pasadena 91107