A new review of California’s marijuana licensing data challenges the notion that retailers operating under social equity programs are more likely to lose their licenses than other cannabis retail businesses.
Capitol Compliance Management, a consulting firm based in Sacramento, examined 1,653 cannabis retail licenses listed in the California Department of Cannabis Control’s registry. The dataset included 281 licenses identified as equity retailers, making up roughly 17 percent of all storefront licenses reviewed.
According to data collected on Sep. 25, about 81 percent of the equity-designated licenses were listed as active. That compared with an active rate of approximately 76 percent among retailers without the designation.
The firm also accounted for differences in the age of the licenses. Since equity permits tended to have been issued more recently, researchers compared retailers that received licenses during the same calendar year. From 2019 to 2022, equity retailers recorded higher active-license rates than their non-equity counterparts. The pattern shifted in later years, with equity retailers posting a lower rate in 2023, matching other retailers in 2024 and falling behind in 2025.
The gap was most pronounced among 2019 licenses. The year saw the granting of 52 equity licenses, with 41 remaining active, resulting in a retention rate of nearly 79 percent. Non-equity retailers posted a lower rate of about 66 percent, with 559 licenses issued and roughly two-thirds remaining active.
Los Angeles County accounted for the largest share of equity licenses in the statewide dataset, with 156, or over 50% of the total. San Francisco has 19, while Sacramento County has 26. The figures cover licenses regardless of whether they were active and therefore should not be interpreted as a count of currently operating cannabis stores.
Kevin McCarty, the report’s author and head of compliance and licensing at the consulting firm, said the continued presence of older equity licenses was particularly notable. He cautioned that an active license alone can’t show whether a retailer is financially stable or profitable but argued that the figures provide grounds for reassessing assumptions about the durability of equity businesses.
The analysis comes with an important limitation. License status doesn’t reveal a retailer’s revenue, profitability, outstanding liabilities, or changes in ownership. It therefore offers only one measure of business continuity rather than a complete picture of performance.
The report also discloses that McCarty is an owner of two equity-designated licenses.
Data of this nature captured in the analysis suggests that the marijuana ecosystem is active and related businesses operating in the same way as Innovative Industrial Properties Inc. (NYSE: IIPR) have a fairly stable client base to serve in California.
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