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A vendor points to a selection of cannabis strains for sale during a 2018 mar...

Photo by Richard Vogel AP

Above:A vendor points to a selection of cannabis strains for sale during a 2018 marijuana festival in California.

Can A ‘Cannabis Equity’ Program Work In San Diego?

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When California voters legalized recreational marijuana in 2016, some hailed it as a progressive policy that would generate windfall tax revenues while others warned of a public health disaster. So far, neither of those extremes has come to pass. KPBS reporters analyzed data and interviewed city officials, police officers and doctors to gauge its impact in San Diego. Learn more.

This is part two in a five-part series. Click here to read the other four parts.

Chonsie Bullock surveys the large empty room in South Central Los Angeles where she is building a cannabis cultivation facility.

Everywhere she looks, she sees a new expense: new walls to isolate each grow room, better ventilation, grow lights, CO2 burners and patches for a leaky roof.

"It's been a roller coaster ride," she said of her business venture. "This is not for the weak of heart."

Bullock's business, Green Haven LA, is something of a test case for LA's social equity program, which is part of a statewide movement to ensure disadvantaged groups share in the wealth the legal cannabis industry is creating. The program offers expedited permitting and compliance assistance to people who can prove they were adversely impacted by the decades-long War on Drugs.

Bullock got help through the equity program because of a conviction for operating an unlicensed medical dispensary. She ended up having to pay fines and was put on probation for three years.

LA is among a number of cities that have established equity programs with help from $10 million in grants authorized by the state Legislature. Others include San Jose, Oakland, San Francisco, Long Beach and Sacramento.

San Diego, however, is not on the list. Supporters of the concept, including two city council members, say city leaders are leaving money on the table by not establishing a program.

Yet the initiative is not without its detractors. LA's equity program has been dogged by allegations of abuse by wealthy entrepreneurs who use low-income partners to get their projects expedited approval. Applicants also say the program is understaffed and underfunded.

As a result of the complaints, LA Mayor Eric Garcetti ordered a third-party audit of the most recent round of equity licensing for cannabis retail shops, putting much of the program on hold.

RELATED: San Diego Missing Out On Revenues From Pot Legalization

"Right now it's not even close to what we had anticipated," Bullock said of LA's equity program.

Despite the issues in LA, San Diego City Council members Chris Ward and Monica Montgomery want to see a program established here. They say they want to make sure part of the roughly $17 million in local cannabis tax revenues expected this fiscal year go to where it is needed most.

"We are trying to use some of this new opportunity through legalized recreational marijuana and some of the revenues that come from that industry to be able to reinvest in communities that have been harmed from the criminalization of marijuana in history," Ward said.

Critics of cannabis equity programs say they are at best ineffective, and at worst a means of encouraging former drug dealers to sell more drugs. Ward said that logic ignores evidence that whites and blacks tend to use cannabis at equal rates, but blacks have been far more likely to face arrest.

A study conducted by the nonprofit Mid-City Community Action Network found cannabis criminalization disproportionately impacted communities of color in San Diego in recent years. For example, the arrest rate for cannabis crimes among black San Diegans was six times that of whites.

While most cannabis equity programs in California focus on creating pathways to participation in the legal cannabis market, Ward and Montogomery propose going further. Their wish list includes funding for youth programs, workforce development and violence prevention initiatives.

Reported by Andrew Bowen , Video by Nicholas Mcvicker

Ward said increasing access to the legal cannabis market for minorities is still a central part of the proposal. "Right now the only individuals who are at the front of the line are those who are predominantly white, with access to capital and access to cash," he said.

Yet, San Diego's cannabis regulations leave little room for growth in the legal market. The city has already issued the maximum 40 permits for operating marijuana cultivation, manufacturing and distribution businesses. And the city has only 13 permits left for retail outlets, according to a recent memo from the city's Development Services Department.

Jay Bowser, a chief advocate for a cannabis equity program in San Diego, said the city would have to change the strict land-use rules that limit where dispensaries can open if it hoped to create a successful equity program. Currently, only four are allowed per City Council district, and they must be 1,000 feet from schools, parks, daycare centers, churches and other dispensaries.

Bowser co-founded the nonprofit Paving Great Futures, which runs job training, entrepreneurship and financial literacy programs mostly in Southeast San Diego. He said there's a fundamental injustice to the fact that minority communities led the innovation that has made the cannabis industry so lucrative today, yet the industry's heavy regulations and enormous start-up costs all but bar those same people from entering the legal market.

"For an industry that we’ve been locked up for decades because of the War on Drugs, we’re now being locked out," said Bowser, who himself was prosecuted for a minor cannabis-related crime in 2007.

Chonsie Bullock agreed that San Diego could not contemplate an equity program without expanding the number of cannabis businesses allowed in the city. Los Angeles is issuing 100 social equity permits for cannabis retail outlets, and even that is not enough to match consumer demand, she said.

"You can't build a foundation properly if you're building it on the size of a penny when you need it built on the size of a dollar," she said.

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San Diego is considering a new program focused on helping communities most impacted by the War on Drugs share in the profits of legalized cannabis. A similar program in Los Angeles has faced criticism.

Aired: December 17, 2019 | Transcript

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