San Francisco Strengthens Cannabis Social Equity Program

The San Francisco Board of Supervisors recently voted to approve a measure designed to strengthen the city’s cannabis social equity efforts. The legislation, which was proposed by San Francisco Mayor London N. Breed in April, builds on the city’s cannabis social equity program, which was launched in 2018 to lower barriers to cannabis licensing and provide employment opportunities for members of communities most impacted by the War on Drugs.

In a statement from the mayor’s office, Broad said that the new provisions of the social equity program approved by the board will help the city in its recovery from the economic crisis brought on by the coronavirus pandemic.

“As San Francisco works to recover from COVID-19, it’s important that we support small businesses, including our cannabis industry,” Breed said. “This legislation helps us make sure the program continues to achieve its goals and ensure that cannabis business owners are supported and have the resources they need to be successful in San Francisco.”

Measure Supports San Francisco’s Cannabis Social Equity Program

The measure, which was passed by a unanimous vote of the board on October 5, modifies the permit process for cannabis businesses and creates new priorities for the city’s Office of Cannabis to increase opportunities for prospective social equity applicants. The legislation also provides greater ownership flexibility for approved social equity businesses while preserving original commitments of the program, according to the mayor’s office.

“Thank you to Mayor Breed for strengthening social equity and creating more economic opportunities for those hurt by the War on Drugs,” Marisa Rodriguez, the director of the Office of Cannabis, said in a statement. “Mayor Breed’s legislation ensures that there will continue to be a legacy of equity in the city for years to come.”

The legislation adds new provisions to ensure that San Francisco’s cannabis industry supports communities that have suffered the brunt of the impact from the War on Drugs. Under the program, cannabis equity applicants who are sole proprietors will be prioritized during the permitting process. Owners of non-equity businesses that support cannabis equity applicants by offering shared manufacturing opportunities will also receive heightened priority by city regulators.

Additionally, the measure shortens the time period to transfer more than a 50 percent ownership stake in a cannabis equity business from the current 10 years to five years, giving equity owners more flexibility to take on new investors and grow their companies. The legislation also requires cannabis businesses to make additional social equity contributions if they wish to reduce an equity applicant’s ownership interest by 20 percent or more. Such commitments could include opportunities to provide hiring, training and mentorship, as well as other support to cannabis social equity businesses or local community organizations.

State Grants Support Social Equity Applicants

Since San Francisco launched its cannabis social equity program in 2018, 94 social equity applicants have applied for permits to operate cannabis businesses in the city. The Office of Cannabis has so far issued a total of 36 permits to social equity applicants, including temporary and permanent permits.

City cannabis regulators also administer grants funded by state programs for individuals that meet criteria based on residency, income, criminal justice involvement and housing insecurity. 

To date, San Francisco has received $6.3 million dollars in grants from the California Department of Cannabis Control and the Governor’s Office of Business and Economic Development, which can be used for business start-up and operating costs. City officials have so far awarded approximately $3 million in grants ranging from $50,000 to $100,00 each to 45 social equity applicants.

“I’m grateful to the city and the state for this opportunity,” said Ali Jamalian, founder and CEO of Kiffen LLC and a social equity permit holder. “Thank you to the Office of Cannabis for standing up this Pilot Program. The money is incredibly helpful and allows me to scale my business during a difficult time. I’m hopeful that all eligible equity applicants will take advantage of the opportunity.”

Cindy De La Vega, an equity permit holder and the CEO of STIIIZY Union Square, said that being the owner of the first Latina-owned cannabis dispensary “feels surreal.”

“My grand opening was October 9, 2020, during a very difficult time for all of us, and especially for areas like Union Square. I am grateful for the San Francisco Equity Program and proud to be permit number eleven. I look forward to using my opportunity to show others that the San Francisco Equity Program does work and should be the blueprint for others to bring to their cities.”