Social Equity

LA’s promise of social equity for marijuana businesses has been painfully slow for entrepreneurs

Whitney Beatty in her empty South Los Angeles storefront last week. Beatty dreams of running a cannabis shop that caters to women of color through L.A.’s social equity program. (Christina House / Los Angeles Times)

LOS ANGELES —When Los Angeles politicians promised that those hit hardest by the war on drugs would profit from legal marijuana, Whitney Beatty saw a chance to realize her dream.

She rented a South L.A. storefront and applied for a license under L.A.’s social equity program, which was supposed to give eligible entrepreneurs a boost in the cannabis industry. She imagined a shop that would cater to women of color, named after Josephine Baker and Billie Holiday.

More than a year later, Beatty is spending money on an empty space with no guarantee of when she will open. Her initial investors have gone out of business, she said. And Beatty said there has been little help from the city.

“I’m doing the best I can to keep this dream alive,” said Beatty, a single mother who also has a business selling humidors to store cannabis. “But it’s draining applicants who are the least financially able to handle these costs.”

Los Angeles has long since granted licenses to some long-standing cannabis shops that met city requirements, but new retailers — those in its social equity program — have been slower to get approval. The program targets entrepreneurs with marijuana arrests, those with low incomes and people who have lived in areas disproportionately affected by cannabis arrests.

When the program was first imagined, cannabis advocates praised it as a kind of reparation for the war on drugs. Now cannabis entrepreneurs complain that the sluggish rollout of the program is hurting people it was supposed to help.

The wait has been costly for applicants, some of whom have been paying for empty storefronts for years. To compete in this round of licensing, applicants were required by the city to have a lease or deed for a store; some snapped up spots even earlier amid concerns about competition for eligible sites. And the promised assistance for such applicants has been limited so far.

It’s “ludicrous” to even call it a social equity program, said Rusty Savage, a social equity applicant seeking to open a marijuana business in South Los Angeles. “It’s not built for a guy who got arrested, who lives in the hood and ain’t making no bread.”

Hundreds of people rushed to turn in applications in September 2019, spurring a prolonged battle over whether the competition for licenses was fair. Months after releasing an audit and reaching a legal settlement, Los Angeles is now poised to grant approval to 200 new shops — all of them eligible under the equity program.

But there has been no guarantee of when that will happen. The city’s Department of Cannabis Regulation says the process has been slowed down by the financial strain of the COVID-19 crisis, which has restricted city hiring and contracting and hindered departmental services, as well as the earlier disputes over applications.

To Read The Rest Of This Article By Emily Alpert Reyes on Los Angeles Times

Published: March 22, 2021

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