Social equity legislation that would establish no-interest loans for marijuana business disproportionately affected by the war on drugs has been favorably reported by the legislature’s Joint Committee on Cannabis Policy.
The bill, a redraft of S.1123, An Act to Ensure Full Participation in the Marijuana Industry filed by state Sen. Nick Collins, includes several provisions to benefit applicants of the state Cannabis Control Commission’s social equity and economic empowerment programs.
Provisions in the bill include codifying the CCC’s existing social equity and economic empowerment programs in the state law; establishing a floor for funding from the CCC directed toward the SE and EE programming; establishing a Social Equity Loan Fund to provide no-interest loans to SE and EE participants, which would include up to 10% of revenue from the cannabis excise tax and require matching donations from private sources to trigger the input of cannabis excise tax funds.
“As we continue to strive to reduce disparities in economic opportunity, mobility, and the criminal justice system, it is important that this industry proactively invest in equitable outcomes for all communities," Collins said. "One of the most critical ways we can break down barriers to success here for entrepreneurs of color, is by increasing access to capital and that is what our bill does.”
The CCC’s economic empowerment program is reserved for racial minorities, people with drug convictions and people who live or work in areas disproportionately affected by the war on drugs. The social equity program offers professional training, technical assistance, and mentoring to applicants.
“This is both a critical and efficient step in delivering on the requirement that money from marijuana tax revenues be spent on restorative economic development for communities harmed by the War on Drugs,” said state Sen. Sonia Chang-Díaz, the chair of the joint committee. "Many talented small businesses and individuals are waiting in the wings, ready to provide value to the market and build wealth in their communities, if they can just get a foot in the door with start-up capital.
"Nobody’s asking for a hand-out here—these are loans—people just want to be able to compete on a level playing field,” Chang-Díaz continued. “Right now, the unavailability of start-up capital is tilting the playing field steeply toward out-of-state corporations and millionaires.”
Lack of funding is among several issues that were brought to the attention of state cannabis regulators in recent months by economic empowerment and social equity applicants. The host community agreement process and lengthy application process are also factors holding those applicants back from opening up shop, they told regulators.
Last week, CCC Chairman Steven Hoffman and Executive Director Shawn Collins sent a letter to the legislature, suggesting to codify the Commission’s Social Equity Program and to consider establishing a social equity loan fund similar to programs that exist in Illinois and in Oakland, California.
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