The California Governor’s Office of Business and Economic Development (GO-Biz) announced that it is now accepting grant proposals for the Cannabis Equity Grants Program for Local Jurisdictions for the fiscal year 2022-2023. This is the latest extension of what was originally intended to be a temporary program to transition the market from illegal to legal and regulated.
The Transition From Illegal To Legal Cannabis Markets
In 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Marijuana Use Act (AUMA). AUMA’s purpose and intent statement calls for cannabis regulation that is easy for people to enter in a legal way. California’s illegal cannabis market is one of the nation’s largest and most profitable, with a large number of brick-and-mortar dispensaries in counties like Los Angeles actually being illegal.
California began granting provisional marijuana business licenses in order to jump-start the adult-use market. That temporary licensing category was set to expire last year, but it was extended to give municipalities more time to complete the permitting process and meet environmental standards.
In an effort to fulfill a four-year-old promise, the California Governor’s Office of Business and Economic Development (GO-Biz) announced that it is accepting grant solicitations for the Cannabis Equity Grants Program for Local Jurisdictions for the fiscal year 2022-2023. This program is part of GO-efforts Biz’s to support local equity programs and applicants.
The Goal Of The Social Equity Grants
The state’s cannabis market continues to grow, but there are still more than half of its jurisdictions that have banned cannabis businesses from operating in their area. This has helped sustain the illicit trade, which is a problem for California and for the rest of the country. Getting fully operational licenses is of critical importance for the state’s cannabis market.
Governor Gavin Newsom said the reforms were necessary to help fulfill the promises of legalization and continue to address the collateral consequences of prohibition, and one such reform is the social equity grants. The state of California is accepting applications for $15 million in social equity grants to help cities and counties with the costs of starting up new or existing cannabis businesses.
The goal of the program is to help those who have been disproportionately impacted by the drug war get into the legal cannabis industry, which will further the stated intent of Proposition 64 by reducing barriers to entry into the regulated cannabis industry.
Offering technical support, regulatory compliance assistance, and assistance with securing the capital necessary to begin a business will aid the state in its goal of eliminating or reducing the illicit cannabis market by bringing more people into the legal marketplace.
Eligible cities and counties can apply for these grants through December 14th.
Is This Enough?
The state of California has taken an important first step in establishing a more equitable cannabis industry by providing funding for jurisdictions to transfer their existing licenses into the new legal market.
However, this funding is only a small part of what needs to happen for a truly equitable legal cannabis market.
The government should also wipe clean the records of those convicted of drug crimes and provide reparations for those who were incarcerated for non-violent cannabis-related offenses. In addition, there needs to be equitable treatment for historically oppressed populations that have been disproportionately affected by prohibition laws, such as Latinos and African Americans.
Without these reforms, many businesses will still be unable to transition into the legal market and get access to capital because they are unable to obtain loans from banks or other traditional sources due to their prior convictions or lack of access to capital after years of operating illegally.
Furthermore, many jurisdictions in California do not allow cannabis sales at all — making it impossible for consumers there to purchase legally grown products — and some municipalities have even banned recreational use altogether. This makes it difficult for the government to regulate illegal markets effectively when they are still thriving in certain areas despite legalization efforts elsewhere.
California is taking a big step in the right direction with this funding. There is much more that needs to be addressed before an equitable legal market can exist in California, and it will take time and hard work to get there.
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