Proposed regulations would provide financial assistance for cannabis entrepreneurs affected by the War on Drugs
CALIFORNIA – California’s Department of Cannabis Control (DCC) today released proposed emergency regulations to provide licensing fee waivers to qualified equity businesses statewide. The waivers are designed to assist individuals harmed by the War on Drugs with starting and operating a cannabis business. The regulations would implement the fee waiver provisions of Senate Bill (SB) 166. DCC will start accepting fee waiver requests beginning January 1, 2022.
“California continues to make significant investments to support cannabis equity businesses,” said Nicole Elliott, DCC Director. “We know access to capital remains a persistent challenge for California’s equity applicants and licensees. These waivers aim to address this challenge for those who need the most financial support, and this program reflects California’s continued efforts to create meaningful pathways to licensure for those most impacted by the War on Drugs.”
This statewide program provides financial support to cannabis business by waiving licensing fees if applicants and licensees meet the equity eligibility criteria set in the proposed regulation such as past cannabis convictions or arrests, reduced income or residence in an area disproportionately impacted by past criminal justice policies, as well as other criteria.
Cannabis prohibition and criminalization had a devastating impact on certain populations and communities in California and nationwide, particularly people of color. Individuals convicted of a cannabis offense, their families and their communities can suffer from the long-term collateral consequences of over policing and incarceration, including negative economic impacts on income and generational wealth development. Because of this, individuals may have a more difficult time launching a business within the cannabis industry often due, in part, to a lack of access to capital. For these reasons, fee waivers reduce barriers to entry and create additional incentives to participate in the regulated cannabis industry.
The California State Legislature allocated $30 million for equity fee waivers and deferrals and established broad statewide eligibility criteria. DCC’s proposed regulations further specify details related to eligibility. To focus efforts on immediately strengthening pathways to attain and maintain licensure for eligible businesses, DCC will focus the first year of implementation on waivers before implementing fee deferrals.
The State of California has invested nearly $90 million to support equity initiatives for cannabis entrepreneurs, including through the Cannabis Equity Grants Program for Local Jurisdictions, which support local cannabis equity programs. More broadly, California is reinvesting directly in communities disproportionately impacted by the War on Drugs, including by utilizing funding from cannabis tax revenues through the California Community Reinvestments Grant Program (CalCRG). CalCRG awards grants to Local Health Departments and qualified Community-based Nonprofit Organizations to support job placement, mental health treatment, substance use disorder treatment, system navigation services, legal services to address barriers to reentry, and linkages to medical care for communities disproportionately affected by past federal and state drug policies.
DCC will file the emergency package with the Office of Administrative Law (OAL) after the required five-working day notice to the public. The public comment period, which lasts five-calendar days, will begin when OAL publishes the proposed regulations as being “under review” on its website: https://oal.ca.gov/. DCC will share instructions for submitting a public comment and participating in the regulatory process when the comment period opens.
The Department of Cannabis Control (DCC) licenses and regulates commercial cannabis activity within California. DCC works closely with all stakeholders, including businesses and local jurisdictions, to create a sustainable legal cannabis industry and a safe and equitable marketplace. DCC develops and implements progressive cannabis policies with robust protections for public health, safety and the environment. DCC was recently formed by merging the three state cannabis programs.
To learn more about the California cannabis market, state licenses or laws, visit www.cannabis.ca.gov.
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