San Diego OKs long-awaited Cannabis equity program to help people of color enter industry

The program was spurred by data showing racial disparities in arrests and ownership of local cannabis businesses

SAN DIEGO - People of color with previous drug convictions will get help entering San Diego’s growing cannabis industry under a new equity program the City Council unanimously approved Tuesday.

Those eligible to participate could get start-up loans, fee waivers, help finding business sites and other assistance. Money for the program will come from state grants and possibly from revenue generated by the city’s cannabis tax.

The equity program comes in response to recent studies showing people of color have suffered a disproportionate share of cannabis arrests in San Diego and that Whites own an outsized share of local cannabis businesses.

City leaders said those two things are closely tied together.

“We had some members of the community, especially the Black community, who were locked up and locked down as a result of participating in something that many other members of society were openly engaging in,” Council President Sean Elo-Rivera said. “And then the doors were thrown open to a market and those with the most resources were able to rush through and start hoarding the profits, all while folks were chained down by the actions of the past.”

An analysis conducted by the city shows that Black and Latino people made up a greater percentage of arrests than they make up of the population.

Local law enforcement agencies couldn’t provide records from before 2015, city officials said.

The ownership study, which covered the entire county rather than just the city, shows 68 percent of cannabis business license holders are White, even though Whites make up 44 percent of the overall population.

Latinos, who make up 34 percent of the overall population, hold 14 percent of cannabis business licenses. Black people fare better, making up 5.6 percent of the county population and controlling 7 percent of cannabis licenses.

The study also estimates that 87 percent of cannabis license holders in the county are men and 13 percent are women.

The studies and the new equity proposals will make San Diego eligible to join nearly all of California’s other large cities in establishing a state-subsidized cannabis equity program.

Since the state began allowing equity programs in 2018, Long Beach, Los Angeles, Oakland, Palm Springs, Sacramento and San Francisco have established them. Humboldt, Lake and Mendocino counties also have programs, which are funded by state cannabis taxes.

Tuesday’s council approval makes San Diego eligible for a $5 million grant that could be awarded next spring.

Councilmember Raul Campillo said it’s frustrating San Diego is behind most other large California cities, but he said that could help the city learn from mistakes elsewhere.

In other cities, equity programs have sometimes had a limited impact or done damage by leaving some participants with large debts.

San Diego’s delay, however, has some negative consequences. It has limited the program’s short-term potential because most of the city’s permits for cannabis outlets and production facilities have already been issued, shrinking the opportunities left for people of color.

For San Diego’s program, two of the eligibility criteria are mandatory:

• Being convicted of a cannabis crime, or having had a family member convicted of a cannabis crime, after Jan. 1, 1980.

• Being a current or former resident, for at least five cumulative years between 1980 and 2016, of Barrio Logan, Linda Vista, southeastern San Diego, Encanto, Golden Hill, North Park, City Heights, the College Area or San Ysidro.

Applicants must also meet two of these four criteria:

• Have a household income below 80 percent of the area median income, which is $106,900 for a family of four in 2022.

• Lost housing in San Diego through eviction, foreclosure or subsidy cancellation after 1994.

• Attended school in the San Diego Unified School District for at least five years between 1971 and 2016.

• Placed in the foster care system at any time between 1971 and 2016.

Community leaders praised the city’s move.

“We must create a meaningful ownership stake in the cannabis industry for the groups and communities most affected, and not just individuals or corporations that seek to exploit the opportunity,” said resident Miklos Campuzano in a written comment submitted at the meeting.