On Tuesday, the Board of Supervisors unanimously passed legislation introduced by Mayor London N. Breed to enhance the impact of the City’s Cannabis Equity Program and support all cannabis businesses in San Francisco. The legislation builds on the Program’s original goal to combat disparities in the cannabis industry by establishing a social equity program in San Francisco. The Cannabis Equity Program, which launched in 2018, was created to lower the barriers to cannabis licensing and provide workforce opportunities to those who were hit hardest by the War on Drugs.

The legislation modifies the permit process and creates new processing priorities in the Office of Cannabis to increase opportunities for prospective equity businesses. The legislation also provides greater ownership flexibility for cannabis businesses and preserves equity commitments in the program.

“As San Francisco works to recover from COVID-19, it’s important that we support small businesses, including our cannabis industry,” said Breed. “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.”

Since the establishment of the Cannabis Equity Program, 94 Equity Applicants have applied for permits to operate cannabis businesses in San Francisco. To date, San Francisco has issued 36 permits to equity cannabis businesses, including permanent and temporary permits. In addition to issuing permits for businesses, San Francisco’s Office of Cannabis administers grants for Equity Applicants, who are individuals that meet criteria based on residency, income, criminal justice involvement, and housing insecurity.

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These grants, funded by the Governor’s Office of Business and Economic Development (GO-Biz) and the Department of Cannabis Control, can be used for start-up and ongoing costs. San Francisco has received approximately $6.3 million in grants from GO-Biz and BCC. To date, the City has approved funding requests for 45 grantees, ranging from around $50,000 to $100,000 each, and nearly $3 million has been disbursed. The remaining grant funds are in the process of being redistributed to equity businesses.

The legislation creates measures to ensure the cannabis industry in San Francisco continues to support communities that have historically been harmed by the War on Drugs.

Specifically, the legislation:

• Prioritizes Cannabis Equity Applicants who are sole proprietors for permit processing
  • Equity Applicants will continue to receive top priority
  • Non-equity owners who support Equity Applicants through shared manufacturing will also receive heightened priority
• Shortens the time period for a transfer of more than a 50% ownership interest in a Cannabis Business from 10 years to five years, giving businesses more flexibility to grow
• Requires that cannabis businesses make additional social equity contributions if they seek to reduce the equity applicant’s ownership interest by 20% or more
  • These commitments include opportunities to provide hiring, training, and mentorship and provide other forms of support to cannabis equity businesses or local organizations

“Being the First Latina-owned cannabis dispensary owner/CEO of Stiiizy Union Square feels surreal,” said Equity Permit holder Cindy De La Vega. “My grand opening was Oct. 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 No. 11. 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.”

“I’m grateful to the City and the State for this opportunity,” said Ali Jamalian, founder and CEO of Kiffen LLC and 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.”

The cannabis industry in San Francisco is important for the City’s economic recovery from the COVID-19 pandemic. Cannabis businesses have created jobs and provided local San Francisco residents with meaningful access to income, as many in the City have worried about employment. Over the past year-and-a-half, 17 new equity cannabis businesses have opened, each creating local job opportunities and generating sales tax revenue to fund other social services and programs. During this same time, approximately 75 cannabis businesses also operated with temporary permits, and an additional 38 businesses operated as medical cannabis dispensaries. San Francisco’s cannabis businesses employ approximately 70 local residents through the City’s First Source Hiring Program.

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

Isabelle Price

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