Recently in Los Angeles, people are questioning the integrity of the Social Equity Program for marijuana companies. The war on drugs adversely affected minority groups, people of color, and businesses from impoverished areas. The social equity program was supposed to give the impacted groups mentioned a headstart in the world’s booming marijuana industry. However, applicants from the social equity program complained at a recent meeting held by the Cannabis Regulation Commission in Los Angeles that they have not been accorded fair treatment.
During the meeting, it was also suggested that people who do not qualify to operate marijuana businesses are taking advantage of the social equity program. They collude with someone from the impacted communities during the application process and that person also acts as the go-to person when the businesses are granted licenses. The LA Social Equity Program is open to California residents who are interested, qualified, or non-qualified to operate cannabis businesses, and many people are looking for a way to join the cannabis industry.
A board member of the Minority Cannabis Business Association (MCBA), an entrepreneur and Los Angeles-based activist, said in an email that the program’s integrity was compromised since its initiation. The purpose of the program was to avail equitable opportunities, healing to the communities and individuals who have been affected by the war on drugs.
In the world today, LA is the biggest market for legal marijuana, noted Aguiar, an MCBA board member. He also said that it is the best market for new investors and entrepreneurs eager to benefit from marijuana legalization.
On 24 October, the executive director of the Department of Cannabis Regulation, Cat Parker, during the commission meeting presented a report on how the city is dealing with the complaints from the social equity applicants. The report also showed how the market share profits would be distributed amongst the equity license holders.
Her report also addressed several concerns, first being that the application system opened early, giving some applicants an unfair advantage. During phase 3 of the application process, which started on 3rd September, some applicants used automated systems such as bots to fill out the application. During the third phase, the program was to issue equity permits to 75 applicants based on the first-come, first-serve basis as long as you fulfill all the requirements. Although the city said no bots were used, the report said otherwise because the total time used to fill out the form was 1 minute 11 seconds for the first 100 applicants. She voiced her concerns on the fact that the applicants had already secured retail spaces despite the short notice of phase 3 applications.
Initially, it was not a must for the applicant of phase 3 permits to have a retail space, but once the application process was started, the city changed the conditions, stating that it was a must for the applicants to present evidence of retail space. This created a barrier for many applicants, especially those from the impacted communities, said Aguiar.
According to Aguiar, the city of LA should analyze and relaunch the program to give everyone a fair chance during application.
Industry watchers believe that marijuana companies like Cannabis Strategic Ventures Inc. (OTCQB: NUGS) and Grapefruit Boulevard Investments Inc. (OTCQB: IGNG) are disappointed that the legal marijuana industry which started with a promise to right the social wrongs of prohibition is now failing to attain this objectives due to some people trying to game the system.
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