REVIEW OF CANNABIS EQUITY ASSESSMENT
San José City Council 2.15.22
Item 8.1
Presenters:
Sarah Zárate, Director, Office of Administration, Policy, & Intergovernmental Relations Michelle McGurk, Assistant to the City Manager
Cannabis Equity Assessment
What?
Identify impacts from cannabis prohibition and War on Drugs, Research cannabis industry history,
Review state cannabis equity programs, lessons learned, and barriers to entering industry
Data and Research Findings
Disproportionate impacts in Black, Latino/a/x, some Asian communities/neighborhoods
Disproportionate impacts in low-income neighborhoods
Program Recommendations
Update equity ordinance
Expand opportunities for equity ownership, prevent predatory arrangements
Provide technical assistance, training, and mentorship Explore workforce development, incubation, incentives
Arrest Data in
San Jose
between
2009-2018 by
Race/Ethnicity
Marijuana-related Incidents (from Calls for Service and Traffic Stop Data), 2004-2017* Community Indicator Maps
MTC Equity Priority Communities
(rated high, higher, or highest priority)
CDBG Low-Moderate Income Census Tracts
(80% of AMI or below)
Strong Neighborhoods Initiative Neighborhoods
(2000-2010)
Disproportionate arrests by race/ethnicity are associated with geographic locations known for current/historic disadvantages Proposed Eligibility Criteria – Equity Owners
Current resident of an MTC Equity Priority Community or former Strong Neighborhoods Initiative neighborhood in the City of San José; and Successfully completes all required pre-application program requirements; and In the year prior to application, resided in a household with an income at or below 150% of the Area Median Income for Santa Clara County; and Has lived for at least four years in an MTC Equity Priority Community or former SNI neighborhood in the City of San José; and meets one of the following criteria:
Has worked in the cannabis industry in San José for at least two years between 2009 and the present; or
Has been arrested for a cannabis crime in California; or Had a parent, legal guardian, child, or sibling arrested for a cannabis crime in California; or Is a person who experienced sexual assault, exploitation, domestic violence, and/or human trafficking while participating in the California cannabis industry.
Additional Ownership Requirements
Equity owner must own 51% of the business
Ownership cannot be transferred to a non-equity owner for 5 years following registration
Equity Partnerships are allowed
Equity Partners’ combined total equals a minimum of 51% of the business (e.g. 3 equity partners each own 17% of the overall business) Each equity partner meets the equity owner requirements Proposed Eligibility Criteria: Equity Employee
Current resident of an MTC Equity Priority Community or former Strong Neighborhoods Initiative neighborhood in the City of San José; and In the year prior to employment in the cannabis industry, the individual resided in a household with an income at or below 80% of the Area Median Income for Santa Clara County; and
Meets one of the following criteria:
Has lived for at least four years in an MTC Equity Priority Community or former Strong Neighborhoods Initiative neighborhood in the City of San José; or Has been arrested for a cannabis crime in California; or Had a parent, legal guardian, child, or sibling arrested for a cannabis crime in California, or Is a person who experienced sexual assault, exploitation, domestic violence, and/or human trafficking while participating in the California cannabis industry.
Issues to Consider
Industry Uncertainty Competition from Illicit
Market Limited Registrations Business
Space/Locations
Awareness of Equity
Programs
Business & Regulatory
Assistance Access to Capital
Address
Workforce/Employment
Issues
Pilot Program Recommendations:
Phased Approach
Phase 1 Phase 2 Phase 3 Phase 4
Outreach + Pre-
registration
(ID participants)
Procure Academy
Consultants
Spring/Summer
2022
Cannabis Equity
Academy
Fall/Winter 2022
Open Registration
Process to
Academy
Graduates
Winter/Spring
2023
Mentoring and
Business Support
REVIEW OF CANNABIS
EQUITY ASSESSMENT
San Jose City Council 2.15.22
Item 8.1
A. Accept the San José Cannabis Equity
Assessment;
B. Accept the staff report on implementing a
Cannabis Equity Pilot Program (pending
Council action on Item 10.2); and
C. Approve an ordinance amending Chapter
6.88 of Title 6 (Business Licenses and
Regulations) of the San José Municipal
Code to amend the Cannabis Equity
Assistance Program.
Council Actions
Presenters:
Sarah Zárate, Director, Office of Administration,
Policy, & Intergovernmental Relations
Michelle McGurk, Assistant to the City Manager