At Los Angeles Public Meeting on Cannabis, Funding for City’s Social Equity Program Takes Center Stage

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Last week, some two hundred people crammed into Los Angeles City Hall, where the Cannabis Regulation Commission held a special meeting to gather public input on a report from the Department of Cannabis Regulation regarding the city’s status on cannabis licensing, as well the development and implementation of its Social Equity Program. Stakeholders also came together to provide input on a report from the Los Angeles Police Department (LAPD) regarding enforcement efforts against unlicensed commercial activity.

Controversy arose in March, after word spread that $5 million in cannabis business tax revenue had been utilized to fund LAPD overtime, as Filter recently reported.  At last week’s meeting, members of the public weighed in on how revenue should be used going forward, with disparate appeals that illustrate the city’s ongoing challenge to strike a balance between social justice and enforcement.

Cat Packer, Executive Director of the Department of Cannabis Regulation (DCR), stated, in opening remarks, “I stand with the community members here in asking for community re-investment.” Packer then gave updates on licensing and legislation the DCR is supporting, including a bill, co-developed by DCR staff, that will guarantee local regulators access to the Track and Trace program, and will establish a statewide emblem program for retail businesses.

Packer also confirmed that the “DCR will receive three million annual to fund business licensing and compliance assistance within the Social Equity Program.” Funding, Packer stressed, “is necessary for us to move forward.” Packer also noted that by mid-April, the DCR will have sixteen staff members. “At this time last year,” said Packer, “we had five.”

On enforcement

During public comment, some attendees thanked the LAPD for “combating” unlicensed cannabis retailers “who are not paying their fair share.” Others, however, expressed that they would prefer not to see tax money “go to waste on enforcement” and argued that “the best way to shut them down is to offer them a way to become legal.”

Brenda Villanueva, Program Director of Pueblo y Salud, a nonprofit that provides substance abuse prevention services in predominantly Latino communities in northern Los Angeles County, was one of the speakers who commended the Commission for taking on “the grand task of eliminating these illegal dispensaries that impact our community.” Villanueva also offered to partner up with the Commission to implement a “Responsible Cannabis Retailer Curriculum” designed “to train all licensed retailers in Los Angeles on best practices to keep cannabis from minors and to mitigate negative impacts in [local] communities.”

Other groups, including members of Latinos for Cannabis and the Equity First Alliance LA Coalition—who repeated the phrase “enforcement should be civil, not criminal” each time they had an opportunity to speak—maintained that “increasing the already massive LAPD budget is not the proper way to support the community.” Activists from the aforementioned groups, including Gabriel Guzmán, co-founder of Latinos for Cannabis and member of the Equity First Alliance LA Coalition, also called for the city to “include the community, and directly-impacted citizens, in the enforcement task force.”  

Equity First Alliance pointed on their social accounts to Measure M, a local ordinance overwhelmingly passed in 2017 that authorized the city to regulate the adult use market following statewide legalization. The ordinance also calls on the Los Angeles City Council to consider “historical issues of social equity and social justice related to the commercialization of cannabis.” These activists argue that “there has been no follow through” and that impacted communities “deserve a FULLY funded” Social Equity Program that provides “technical assistance, education, loans, and other services to qualified applicants who want to own businesses in the cannabis industry.” They also warn that “cannabis tax revenues that should be allocated to social equity and community reinvestment are in danger of being allocated to the LAPD— the same department that has arrested hundreds of thousands of people for cannabis offenses over the last century.”

On social equity

Still, appeals to the Commission regarding social equity were not uniform. One speaker, who identified himself as a Phase II applicant, said that while the city’s Social Equity Program is a “noble idea,” priority licensing is not enough, arguing that: “about 100,000 people have been affected by the War on Drugs that might be eligible . . .  And if the program is extremely successful and, let’s say, a thousand social equity applicants manage to get their . . . license, it still is only one percent of the people that we’re saying have been affected. What are we doing to help everyone else?” (District Attorney Jackie Lacey recently put the number at 50,000 for all of Los Angeles County.)

When it comes to funding, some have called for the city to set aside 25 percent of cannabis revenue for social equity. Others, including Jorge Muñoz, a member of the Equity First Alliance LA Coalition, maintain that 100% of that revenue should be allocated to historically targeted communities. According to Muñoz, this move is appropriate “if you quantify the effect the War on Drugs had on our community.” One thing speakers generally seemed to agree on is that, at the end of each fiscal year, whatever is left of cannabis tax revenue should not be referred to the city’s general fund.

Additionally, in response to a Rules Committee recommendation that an annual $3 million be set aside to fund the Social Equity Program for a period of three years, Gabriel Guzmán of Latinos for Cannabis argued that “funding should not be limited to three years,” as “generational wealth cannot be created within this time frame.” Advocates also called for the community benefit plans of all licensed owners, including Phase I licensees, to be made public for transparency.

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