L.A. aims to help disadvantaged communities cash in on marijuana legalization

The war on drugs has taken a disproportionate toll on people who are poor, black or Latino, community activists have long lamented.

Now that marijuana is on the brink of legalization in California, Los Angeles leaders want to make sure that disadvantaged people can cash in.

L.A. has been crafting regulations to permit a wide range of marijuana businesses as the state prepares to legalize the sale of recreational pot. Under a proposal drafted by outside consultants and released this week, the city would provide extra help to some people seeking to run cannabis businesses, in an attempt to address the uneven effects of the drug war.

“For so long, people that were black, people that were Latino, we have paid the price for this business,” City Council President Herb Wesson, who is African American, said at a recent community forum in Watts. “And as we move this into the legal realm, it is important to us that we have a piece of the action.”

Local governments cannot give preferential treatment based on race or ethnicity under California law, a fact that Wesson quickly acknowledged at the Watts forum.

Instead, the L.A. program would benefit poor people who have been convicted of a marijuana crime in California, poor people whose immediate family members have been convicted, people with low incomes who live or have lived in neighborhoods that were heavily affected by marijuana arrests, and companies that agree to help disadvantaged applicants.

“This is not about race,” said Donnie Anderson, cofounder of the California Minority Alliance, which advocates for the inclusion of people of color in the marijuana industry. “This is about communities that were hurt by the failed war on drugs.”

Without such a program, “you’d just have corporate people getting into the industry,” Anderson said. “Where’s the justice in that?”

Under the proposed “social equity” program, the city would provide different levels of assistance to the four categories of eligible applicants, with the maximum assistance going to poor people convicted of marijuana crimes. However, the city could still deny marijuana licenses to people convicted of violent or serious crimes as outlined in state law.

People in the program could get help applying for city licenses, training employees and finding vacant city properties — those that are not suitable for affordable housing — to rent at free or reduced rates. The city would also help people expunge old convictions for marijuana crimes. And L.A. would also waive or defer fees and provide startup loans at low rates.

In addition, cannabis businesses run by wealthier applicants could get tax rebates if they help disadvantaged entrepreneurs by providing them floor space, mentoring or other assistance.

Because L.A. is allowing marijuana businesses only in limited zones, entrepreneurs have been eager to get city approval quickly, before the available space is snapped up by other businesses. Existing pot shops that have been operating in line with an earlier set of city rules are first in line for licenses. After that, the city will start handing out licenses to other applicants.

Under the proposal, for every general applicant who gets a license, the city would give out one license to someone participating in the “social equity” program — a rule meant to ensure “equitable participation” in the industry, according to the proposal.

The recommended rules, which were drafted by the consulting firm Amec Foster Wheeler with the help of city staff, are expected to be vetted by a council committee later this month. The firm also analyzed geographic and racial disparities in marijuana arrests in Los Angeles and identified which neighborhoods had been disproportionately affected.

In addition to assisting disadvantaged applicants, the proposed rules would also require new cannabis businesses to ensure that at least half of their workforce are people with low incomes, residents living in the heavily affected neighborhoods, or those who have been convicted of a marijuana crime and their family members.

The proposed rules would also set aside 20% of city revenue from taxing marijuana businesses to help pay for community beautification, drug treatment and other services for communities heavily affected by marijuana arrests. The consultants also recommended that the city streamline the approval process for all marijuana businesses to make it less time consuming and costly.

Marijuana industry groups such as the United Cannabis Business Assn., which have closely tracked the proposed regulations, were still reviewing the newly released proposal Friday but applauded the idea. Adam Spiker, executive director of the Southern California Coalition, said the consultants had “spent so much time trying to get this right.”

“This is about who was most affected by the war on drugs, and what can we do, as the city of Los Angeles, to make that right?” Spiker said, quickly adding, “Or try to make that right. People going to prison, their kids going to foster care — there’s no way to right those wrongs.”

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