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Watsonville Touts Equity Program as Boon for Small Cannabis Businesses

City Council set aside some cannabis licenses for equity program applicants

By Abigail Acosta

The City of Watsonville is hoping recent additions to its Cannabis Equity Program will spark a time of opportunity for the city’s minority cannabis business owners.

First approved by the City Council in 2019, the equity program was put in place to help and support small business owners in the competitive cannabis industry.

It gives those who have been wrongfully incarcerated, minorities and women business owners an opportunity to break into the industry. Approved applicants have the advantage of omitting certain fees, delaying a property acquisition for business operations and the benefit of not having to compete against regular applicants in the highly-competitive field.

In order to apply for the program, a person must meet three of nine requirements. Requirements include: having attended a Pajaro Valley Unified School District school for at least five years, having been negatively impacted in a disproportionate way by cannabis criminalization or being “economically disadvantaged.”

Applicants will then be scored by city staff for how well they meet the criteria, which also includes having 25% of their daily operations run by women. 

The application process has not yet opened, but Watsonville’s Community Development Department Director Suzi Merriam said there are already two business owners ready to apply when the city gives them the green light.

Merriam said the program’s requirements are broad enough to give opportunity while being confining enough to make sure those who are qualified applicants are chosen. 

Asked whether or not the program would ultimately benefit Watsonville’s minorities, Merriam said, “I would like for that to be so and that is the intent of the regulations: to really give an advantage to small business owners.” 

In June the City Council took the program a step further. It not only OK’d the addition of 16 new cannabis permits and licenses distributed through the industry’s various fields, but it also set aside one license in each field for equity program applicants. 

Lisa Tollner, co-founder and chief of sales and marketing for Sensi Products, which sells cannabis-infused edibles, said the equity program is a big win for small businesses.

Tollner expressed her support for the program and stated how it is important because of the number of lives that were devastated by the war on drugs. She plans on applying through the program, but still has more research to do to see if she meets the qualifications.

Tollner said even though the program is a beneficial tool for people who have taken a hit for minor cannabis crimes, they have to be ready to take advantage of the equity program and work hard to find success in the ultra-competitive field.

City Councilman Felipe Hernandez said the program was “very important” to him because people of color were disproportionately targeted during the war on drugs and many were incarcerated for low-level cannabis crimes.

“It’s important that this equity program supports people impacted by these inequities and seek to reduce barriers entering the legal cannabis industry by providing support for business ownership and employment opportunities,” he said.

The City of Oakland was one of the first to get off the ground with its equity program in early 2019. According to its city website, Oakland just received a $6.5 million grant for its cannabis equity program, which is the largest grant received in the state. The $6.5 million is only a fraction of the $30 million that the state has in stock for cities implementing equity programs. 

Jessie Grundy, a resident of Oakland, is now a successful cannabis business owner, according to Black Enterprise. Grundy mentioned in an interview with the publication that all of his business ventures were failing and he was constantly getting in trouble. In 2018, his hometown created their Social Equity Program, which ensured natives from the inner city or people from Oakland with cannabis convictions were able to get priority licensing.

Grundy was one of the first to get licenses and after a year he began operations and selling products for his company, Peakz Company.

When asked if minorities and those with convictions will benefit from the program Grundy said, “I believe people in cities with social equity programs can thrive in this industry, especially programs that offer loans and grants. Money is the main reason minorities are struggling to enter the field. You need money for employees, raw product, packaging, labeling—and that’s just the surface.”

While Oakland’s equity program has seen success, other cities’ programs have struggled. When the City of Los Angeles first launched its equity program in September of 2019 applicants were applying and not hearing back for a month or longer. According to Marijuana Business Daily, this had “many hopeful applicants outraged and threatening to take drastic action.” Hundreds of people appeared at a Cannabis Regulation Commission meeting and made claims of the city being “corrupt, incompetent and unfair.”

Tollner said she is passionate about women-owned businesses and making sure that women’s voices are heard. She noted that when she first got involved in the cannabis industry in 2013, it was an equal playing field as businesses were 50/50 male- or female-owned. She said that this is no longer the case and that she sees a much more male-dominated field nowadays.

According to Marijuana Business Daily, in 2015, only two years after Tollner got involved in the industry, around 36% of C-suite positions were occupied by women. 

Over the course of two years, the number fell to 27%. Marijuana Business Daily attributes the falling number to a lack of funding to women-owned companies and social conceptions. As Tollner mentioned from her personal experience as a woman business owner, she has found that she often does not get the same respect and legitimacy as her male counterparts.

“I want to fight for women and having a seat and being respected,” she said.

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