Santa Rosa City Council
November 28, 2023

CITY OF SANTA ROSA
Cannabis Equity Assessment
October 2023
Exhibit A
City of Santa Rosa
Cannabis Equity Assessment
October 2023
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Acknowledgements
The City of Santa Rosa extends its sincerest appreciation to the following individuals and entities whose contribution has made the creation of the Cannabis Equity Assessment possible:

City Council
Natalie Rogers, Mayor
Eddie Alvarez, Council Member
Mark Stapp, Council Member
Dianna MacDonald, Vice Mayor
Victoria Fleming, Council Member
Chris Rogers, Council Member
Jeff Okrepkie, Council Member
City Staff
Amy Nicholson, Supervising Planner- Advance Planning
Monet Sheikhali, Senior Planner
Brayden Jaco, Communications Coordinator
Sa nta Rosa Police Department
Conan Mullen, Crime Analyst
State of California
Gavin Newsom, Governor
Go-Biz Grants Team

City of Santa Rosa
Cannabis Equity Assessment
October 2023
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Table of Contents
Introduction ............................................................................................................... 1

1. Cannabis Equity Analysis ..................................................................................... 2 Methodology ............................................................................................................................. 2 Cannabis Enforcement History .................................................................................................. 2 City of Santa Rosa Demographics .............................................................................................. 4 Cannabis-Related Arrests and Citations .................................................................................... 5 Cannabis-Related Arrests by Race/Ethnicity ............................................................................. 5 Identification of Disproportionately Affected Communities ..................................................... 7 Disproportionately Affected Communities Findings ............................................................... 12 Conclusions Regarding Disproportionately Affected Communities ........................................ 14

2. Overview of Cannabis-Related Businesses and Activities ................................... 15 City of Santa Rosa Cannabis Legislative History ...................................................................... 15 Allowable Land Use Zones ....................................................................................................... 15 Permitting: ............................................................................................................................... 16 Fees: ........................................................................................................................................ 18 Taxation: .................................................................................................................................. 18 Current Cannabis Businesses................................................................................................... 18

3. Barriers to Entry ................................................................................................ 19 Financial Barriers ..................................................................................................................... 19 Technical Barriers .................................................................................................................... 21 Criminal Barriers ...................................................................................................................... 23

4. Best Practices ................................................................................................... 24 City of Oakland - Cannabis Equity Program (2017) ................................................................. 24 San Francisco – Office of Cannabis - Equity Program (2017) .................................................. 25 City of Sacramento - Cannabis Opportunity Reinvestment and Equity (C.O.R.E.) Program (2018) ...................................................................................................................................... 27 City of Los Angeles – Cannabis Social Equity Program (2017) ................................................. 28 City of Long Beach – Cannabis Equity Program (2018) ........................................................... 29

5. Community Outreach and Feedback .................................................................. 32 Online Survey .......................................................................................................................... 32 Community Meetings .............................................................................................................. 32 Sta
keholder Interviews ............................................................................................................ 33 City of Santa Rosa
Cannabis Equity Assessment
October 2023
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Summary of Feedback and Common Themes ......................................................................... 33

6. Findings and Recommendations ........................................................................ 37

1. Equity Program Eligibility Criteria ................................................................................. 37

2. Equity Program Application and Permitting ................................................................. 39

3. Equity Program Benefits and Services .......................................................................... 40

4. Expungement Program ................................................................................................. 40

5. Workforce Development Opportunities ...................................................................... 41

6. Equity Program Funding ............................................................................................... 42

7. Public Outreach and Education .................................................................................... 42

8. Program Data Collection............................................................................................... 43

9. Ongoing Program Monitoring and Updates ................................................................. 44 Appendix A: The City of Santa Rosa Cannabis Equity Website ................................... 45 Appendix B: Cannabis Equity Assessment Survey (English) ........................................ 46 Appendix B: Cannabis Equity Assessment Survey (Spanish) ....................................... 75 Appendix C: Community Meeting Invitation ............................................................. 90

City of Santa Rosa
Cannabis Equity Assessment
October 2023
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List of Figures
Figure 1 – Distribution of Race/Ethnicity, City of Santa Rosa (2021) ............................................... 4 Figure 2 – Cannabis-Related Arrests by Year, City of Santa Rosa (2004-2023) ............................... 5 Figure 3 – Cannabis-Related Arrests by Race/Ethnicity, City of Santa Rosa (2004-2023) ............... 6 Figure 4 – Population Percentage vs. Arrest Percentage, City of Santa Rosa (2004-2023) ............. 6 Figure 5 – People of Color as a Percentage of Population ............................................................... 9 Figure 6 – Low-Income Households as a Percentage of Population .............................................. 10 Figure 7 – Educational Attainment ................................................................................................ 11 Figure 8 – Disadvantaged Census Blocks ....................................................................................... 12 Figure 9 – Cannabis Permitting Timeframe ................................................................................... 16 Figure 10 – Cannabis Permitting Flowchart ................................................................................... 17

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Introduction
Long-standing and persistent obstacles to general business opportunities for affected communities that exist broadly within the United States are even more severe regarding cannabis- related businesses, largely because of t he long- term consequences of cannabis enforcement associated with the racial targeting from the War on Drugs. The devastating impact of the cannabis prohibition era in California has been felt throughout the state, especially for Black, Indigenous, People of Color (BIPOC). These communities have borne a disproportionate burden from arrest, convictions, and collateral consequences following convictions. The long- term consequences of cannabis enforcement coupled with generational poverty, education gaps, and additional barriers to entry, make it extraordinarily difficult for affected individuals to enter the regulated cannabis industry.

The primary purpose of this Cannabis Equity Assessment (“Equity Assessment”) is to examine the impact of cannabis criminalization in the City of Santa Rosa (“City”) and to identify barriers that have prevented communities and individuals from participating in the legal cannabis industry.

This Equity Assessment utilizes a data -driven analysis to identify communities that have be en disproportionately impacted by cannabis criminalization, including data on arrests, poverty rates, educational attainment levels , and other indicators of the impact of cannabis enforcement.

Furthermore, t he Equity A ssessment also reviews the characteri stics of the existing cannabis industry to understand the barriers to entry faced by affected communities within the City.

The goal of this Equity Assessment is to inform the development and implementation of a cannabis equity program in the City, which is a set of policies, programs, or initiatives designed to assist affected communities in entering the legal cannabis industry and succeeding as entrepreneurs. It is important for the City’s cannabis equity program to be designed and implemented in a way tha t is transparent, accessible, and fair, and that considers the specific needs and challenges directly faced by impacted communities within the City.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

1. Cannabis Equity Analysis
Methodology
This Equity Assessment analyzes historical cannabis -related arrest statistics in the City of Santa Rosa as they relate to low -income and minority communities to identify communities disproportionately affected by cannabis enforcement. Historical cannabis -related arrest data, provided by the Santa Rosa Police Department (“SRPD”), were overlaid on census tract data to identify spatial and demographic disparities in cannabis -related arrests and to determine arrest “hot spots” within the City. Finally, low -income census tracts and neighborhoods were mapped to determine whether a nexus exists between the identified arrest hot spots and low -income populations in order to identify communities disproportionately affected by cannabis enforcement.

Cannabis-related arrest data was obtained from the SRPD for years 20 04 to 2023. Low income and demographic data were derived from the 201 7-2021 American Community Survey (ACS) 5 - Year Estimates. The U.S. Census Bureau provides and publishes both ACS 1-year estimates and 5- year data.

Cannabis Enforcement History
Prior to the 1900’s, cannabis was cultivated throughout the United States primarily for its industrial use (as “hemp” for use in a variety of commercial items including paper, rope, textiles, etc.) and its medicinal uses with very little targeted government regulation. Cannabis use for its psychoactive effects began to increase during the 1900’s, simultaneously a widespread national “anti-intoxicant” sentiment that resulted in prohibition of alcohol was also emerging.

As a result, beginning in the early 1900s, most States began placing restrictions on the cultivation and sales of cannabis. The first national regulation of cannabis was created by the Marihuana Tax Act of 1937 (as marijuana was spelled at the time), which placed a tax on the sale of cannabis and allowed for law enforcement to make arrests for non -payment of the tax. The Narcotic Control Act of 1961 and the Controlled Substances Act of 1970 officially made the manufacture, importation, possession, use, and d istribution of cannabis illegal throughout the United States.

The Drug Enforcement Agency (DEA) was created in 1973 and began increasing its enforcement activities, while recreational cannabis use was also increasing – first as popularized by the counter-culture revolution of the time and then as it moved into the more mainstream population. The term “War on Drugs” emerged following several press conferences held by then- President Richard Nixon during the Summer of 1971.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

The Comprehensive Crime Control Act of 1984 increased federal penalties for cultivation, possession, or transfer of marijuana; and the 1990 Crime Control Act provided funding for local law enforcement agencies to seize private property associated with unlawful drug activities, including cannabis cultivation or distribution.

Illegal cannabis use was increasing, and so was the response from law enforcement. In their 2012 definitive analysis on the subject (“How Risky Is Marijuana Possession? Considering the Role of Age, Race and Gender”), researchers Holly Nguyen and Peter Reuter point out that:
“There has been a dramatic rise in the number of arrests for simple possession since 1991.

In 2008, about 800,000 individuals were arrested for possession of small amounts of marijuana (typically less than an ounce). That figure was more than three times the number in 1991.”

And most importantly, Nguyen and Reuter showed that although cannabis use rate was about the same for White and Black Americans, rates of arrest are about three times higher for Black Americans:
“Although Whites and Blacks show an overall increase in arrest rates since 1991, the rates for the two races are markedly different. In 1991, Blacks were arrested twice as often as Whites. In 2008, Blacks were more than three times likely to be arrested as Whites. This starkly contrasts with their almost identical rates of use.”

Meanwhile, although the War on Drugs continued to rage and affect Black/African American, LatinX and indigenous communities disproportionately, attitudes of Californians began to change significantly in the early 1990s . The medicinal value of cannabis to HIV patients for appetite stimulation and pain management was well supported by Californians who began a 20 -year acceptance of medicinal, and ultimately recreational, cannabis along with the associated de - criminalization.

In 1996, Californians passed Proposition 215, the Compassionate Use Act, which allowed for the uses of medicinal cannabis. In 2011, there were notable changes in California law, and some misdemeanor marijuana statutes were re-classified as infractions, leading to a significant decline in misdemeanor marijuana arrests. The Medical Marijuana Regulation and Safety Act was adopted by the California Legislature in 2015, and in of November 2016, California voters passed Proposition 64, which legalized the poss ession and use of marijuana for individuals 21 years of age and older and reduced the offense degree for a number of marijuana -related offenses.

Proposition 64 essentially ended cannabis prohibition in California. For example, in 2014, there were 13,300 felony arrests for cannabis in California, where that number had dropped to 1,181 by 2019.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

However, much of the damage from disproportionate enforcement of cannabis-related laws had already been done, and the long- term effects of the War on Drugs, have per sisted and are well documented. For example, in their 2017 research for the Cato Institute (“Four Decades and Counting: The Continued Failure of the War on Drugs”) Christopher J. Coyne and Abigail R. Hall point out that:
“A felony drug charge can also cause an individual to lose eligibility to work for the federal government; enlist in the U.S. Armed Forces; obtain an import, customs, or other license; or obtain a passport. Many private -sector job applications require criminal background checks and the disclosure of felony convictions, preventing individuals convicted of drug offenses from obtaining gainful employment. Given the rate at which minorities are arrested for crime, this has immense implications for the long- term prosperity of both individuals and broader communities.”

Further, in its 2020 “Crime in California” report, the California Department of Justice indicated that although the overall number of arrests for cannabis related activities is trending downward since legalization, arrests are still disproportionately high for non- white citizens – Hispanics citizens accounted for nearly 42% of those arrests, followed by Blacks citizens, at 22%, with White citizens at 21%.

City of Santa Rosa Demographics
Figure 1 below shows the City of Santa Rosa 2017-2021 5-Year demographic estimates. For people reporting one race alone, 62.3 percent were White; 34.0 percent were Hispanic or Latino ; 5.9 percent were Asian; 2.0 percent Black or African American, 1.2 percent were American Indian and Alaska Native; 0. 4 percent were Native Hawaiian and Other Pacific Islander. An estimated 8.9 percent reported two or more races.

Figure 1 – Distribution of Race/Ethnicity, City of Santa Rosa (2021)

Race/Ethnicity Population Percent
White Alone 111,660 62.3%
Hispanic or Latino 60,914 34.0%
Two or More Races 15,972 8.9%
Asian Alone 10,653 5.9%
Black or African American Alone 3,610 2.0%
American Indian and Alaska Native Alone 2,223 1.2% Native Hawaiian and Other Pacific Islander Alone 801 0.4% Source: U.S. Census Bureau, 2017-2021 American Community Survey 5-Year Estimates

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Cannabis -Related Arrests and Citations
From 2004-2023, there were a total of 4,792 cannabis-related arrests and 338 citations citywide, with 2023 reflecting only a partial year. Cannabis-related arrests reached the highest in 2010, with a total of 6 13 arrests respectively. Since the last peak in 2010, there has been a notable and consistent reduction in arrests. This trend can be largely attributed to the widespread adoption of decriminalization policies across the State of California. Moreover, a significant milestone in this mov ement was the enactment of Proposition 64, which legalized the recreational consumption of cannabis for adults.

Figure 2 – Cannabis-Related Arrests by Year, City of Santa Rosa (2004-2023)

Source: Santa Rosa Police Department
Cannabis -Related Arrests by Race/Ethnicity
Figure 3 below, displays the cannabis -related arrests by race/ethnicity. From 2004- 2023, White populations accounted for the highest percentage of cannabis -related arrests (52.6%), followed by Hispanic/Latino (33.0%), and Black/African American (9.4%).

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Figure 3 – Cannabis-Related Arrests by Race/Ethnicity, City of Santa Rosa (2004-2023)

To understand the impact of cannabis -related arrests on different demographics in the City, the percentage of arrests w ere compared to the total population of each demographic. The data shows that Black/African American individuals were arrested at a higher rate compared to their representation in the city's population. Specifically, Black/African American individuals make up

2.0% of the City's population but accounted for 9.4% of cannabis -related arrests . This disproportionate arrest rate is depicted in Figure 4.

Figure 4 – Population Percentage vs. Arrest Percentage, City of Santa Rosa (2004-2023)

Source: Santa Rosa Police Department
Source: Source: U.S. Census Bureau, 2017-2021 American Community Survey 5-Year Estimates Total Percent Total Percent
White 2,517 52.6% 111,660 62.3%
Hispanic or Latino 1580 33.0% 60,914 34.0%
Black or African American 450 9.4% 3,610 2.0%
Asian 85 1.8% 10,653 5.9%
American Indian and Alaska Native 58 1.2% 2,223 1.2% Other 56 1.2% 3,610 2.0%
Native Hawaiian and Other Pacific Islander 11 0.2% 801 0.4% 2 Source: U.S. Census Bureau, 2017-2021 American Community Survey 5-Year Estimates Arrests Population
(2004-2023)1Race/ Ethnicity (2021)2
1 Source: Santa Rosa Police Department

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Identification of Disproportionately Affected Communities The objective of this Equity Assessment is to identify disproportionately affected communities in the City that have been historically impacted by cannabis criminalization. Based on the analysis conducted in the previous section, it is evident that BIPOC populations, particularly African American populations, have historically been subject to a disproportionate rate of cannabis - related arrests in the City. Research shows us that arrests have long-term consequences and can limit an individual's opportunities for employment, education, and housing, which can prevent them from securing a stable financial future. These long-term consequences, coupled with the high financial barriers of the cannabis industry , ma ke it extrao rdinarily difficult for affected individuals to enter the regulated cannabis industry.

To identify the disproportionately affected communities in the City, three key indicators were examined by census tract: people of color populations, low-income populations, and educational attainment levels. Historically, individuals from racial and ethnic minority groups have experienced disproportionately higher rates of arrests for cannabis-related offenses, while those with limited financial resources encounter substantial obstacles when attempting to participate in the regulated cannabis industry. Educational attainment levels are also essential indicators, as individuals with lower levels of education are less likely to have access to the resources needed to enter the industry successfully. By assessing these three indicators along with the location and concentration of cannabis -related arrests, provides a comprehensive understanding of the disproportionately impacted communities in the City.

People of color , low-income, and low educational attainment populations were identified and mapped by census tract, aided by data obtained from the United States Environmental Protection Agency's (EPA) environmental justice mapping tool, EJSCREEN. This environmental justice mapping tool leverages nationwide demographic and environmental data to assist organizations and governmental agencies in pinpointing low -income communities. EJSCREEN sources its data from the U.S. Census Bureau’s American Community Survey (ACS) 2017-2021 5-year Summary.

People of Color Populations
Figure 5 provides a visual representation of the percentage of individuals within a census tract who list their racial status as a race other than white alone and/or list their ethnicity as Hispanic or Latino; in other words, individuals who do not identify as non- Hispanic white alone. The term "alone" here signifies that the individual identifies with a single racial category, rather than being multiracial.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

As illustrated in Figure 5 , the census tracts in the southwestern and m idwestern regions of the City have the highest concentration of non-White residents. These tracts encompass a population consisting of between 50% and 100% non- White residents. Census tracts primarily located in westernmost areas of the City exhibit the lowest proportion (less than 25%) of non -White residents.

Low -I ncome Populations
Figure 6 provides a visual representation of the percentage of low-income households in each of the City’s census tracts. Low-income households are defined as those with household incomes at or below twice the federal poverty level. It's worth noting that the City, for the most part, exhibits a low concentration of poverty, with the majority of its census tracts having 25% or less of their households falling into this category. However, one notable exception is Census Tract 151406, positioned in the southwestern part of the City, which stands out for having the highest concentration of low-income households at 52%. Additionally, the remaining census tracts that fall within the range of 25% to 50% of low -income households are predominantly located in the southwestern and midwestern regions of the City , which also have higher rates of non-white populations as compared to other regions in the City.

Educational Attainment
Educational attainment refers to the highest level of education an individual has achieved. Figure 7 provides a visual representation of the percentage of individuals aged 25 or older in each census tract within the City who have not attained a high school diploma.

Broadly, the City exhibits high levels of educational attainment, with the majority of census tracts boasting a significant portion of residents who have completed high school. However, noteworthy exceptions are found in the southwestern and midwestern regions of the City, where the highest percentages of individuals without high school diplomas, ranging from 25% to 50%, are concentrated. These same regions also happen to host the highest concentrations of non -white and low-income individuals, further highlighting the intersectionality of educational, racial, and socioeconomic factors in this context.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Figure 5 – People of Color as a Percentage of Population .

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Figure 6 – Low-Income Households as a Percentage of Population

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Figure 7 – Educational Attainment

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Disproportionately Affected Communities Findings
To pinpoint the areas in the City that have been most impacted by cannabis criminalization, the data was examined and ranked based on three key indicators using a color -coded system. The indicators were ranked from high to low impact and color- coded as red, orange, yellow, and green. The areas marked in red were considered to have the highest impact, followed by those in orange, then yellow, and finally green.

As depicted in Figure 8, the census tracts situated in the southwestern and midwestern regions of the City exhibit the highest proportions of non -White residents, along with elevated rates of low-income populations and lower rates of high school diploma holders. Specifically, the highest percentages of cannabis -related arrests were recorded in census tracts 152000 and 153002, accounting for 14% and 8%, respectively. Notably, these two tracts ar e both located within the midwestern regions of the City. Hence, this region of the City is identified as the most "Disproportionately Affected" given the convergence of factors such as high rates of cannabis - related arrests, a significant non-White population, and a prevalence of low-income individuals.

Figure 8 – Disadvantaged Census Blocks
Green Minimal Impact
Yellow Low Impact
Orange Moderate Impact
Red High Impact

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Census Tract Number of
Arrests Population POP % Percent of
Arrests
% People of
Color % Low Income % Not Completed
High School
151404 45 2967 1% 1% 88% 30% 42%
153102 42 6109 3% 1% 86% 31% 35%
153104 93 3687 2% 2% 73% 49% 36%
152803 67 4787 2% 1% 72% 30% 35%
153103 28 4489 2% 1% 67% 36% 21%
153201 265 4115 2% 6% 67% 23% 22%
151405 21 7245 3% 0% 64% 39% 22%
153202 26 3414 2% 1% 64% 26% 30%
153302 38 5690 3% 1% 64% 25% 33%
153002 374 6921 3% 8% 63% 35% 30%
152903 136 4942 2% 3% 63% 31% 26%
153301 140 6290 3% 3% 59% 19% 16%
153003 148 5598 3% 3% 58% 31% 20%
151406 123 3142 2% 3% 55% 52% 26%
152000 689 2165 1% 14% 55% 37% 12%
153006 55 7978 4% 1% 54% 11% 23%
153001 100 6928 3% 2% 54% 28% 15%
151403 32 4827 2% 1% 52% 20% 11%
152100 297 3089 1% 6% 50% 31% 22%
152804 82 3217 2% 2% 49% 39% 18%
152904 254 5793 3% 5% 47% 11% 7%
153005 41 7153 3% 1% 46% 23% 7%
152502 208 4146 2% 4% 46% 26% 10%
152801 78 4216 2% 2% 45% 21% 12%
152905 30 4137 2% 1% 42% 18% 7%
152201 119 4288 2% 2% 39% 32% 8%
152501 35 4044 2% 1% 38% 18% 6%
152702 2 4763 2% 0% 37% 22% 12%
152906 29 6563 3% 1% 34% 16% 9%
152402 29 3012 1% 1% 33% 8% 2%
152204 33 4045 2% 1% 32% 20% 10%
151900 265 3049 1% 6% 31% 35% 12%
151701 346 3838 2% 7% 31% 14% 8%
152601 14 6966 3% 0% 28% 8% 4%
152401 12 4848 2% 0% 26% 5% 2%
152203 31 3222 2% 1% 25% 22% 8%
151800 105 4730 2% 2% 24% 13% 3%
151506 25 5877 3% 1% 23% 26% 12%
151504 19 4121 2% 0% 19% 7% 3%
151702 33 4109 2% 1% 19% 26% 3%
151503 12 3190 2% 0% 18% 8% 3%
152205 16 2092 1% 0% 16% 13% 3%
152300 35 4155 2% 1% 13% 13% 4%
151601 3 2749 1% 0% 12% 8% 1%
152602 0 1161 1% 0% 11% 7% 3%
151602 5 3123 1% 0% 9% 7% 2%
151505 2 1325 1% 0% 7% 19% 1%

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Conclusions Regarding Disproportionately Affected Communities Based on the analysis conducted in this assessment, there are census tracts within the City that face economic and social disadvantages. Analysis of the cannabis-related arrest records revealed a significant disparity in cannabis-related arrests, with Black/African American individuals bearing a disproportionate burden. Their arrests are nearly five times higher than their proportion in the population. This imbalance has far- reaching consequences, including the perpetuation of generational poverty, educational disparities, and financial barriers that hinder participation in the regulated cannabis industry. To mitigate these disparities and ensure a level playing field, we strongly recommend the implementation of a cannabis equity program. Such a program would facilitate fair access to opportunities in the cannabis industry workforce and promote entrepreneurship, addressing the underlying issues and fostering greater inclusivity in this sector.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

2. Overview of Cannabis -Related Businesses and Activities City of Santa Rosa Cannabis Legislative History
On December 19, 2017, the Santa Rosa City Council took a significant step in regulating cannabis- related activities by adopting Ordinance No. ORD-2017-025. This ordinance laid the groundwork for a comprehensive regulatory framework governing both medical and adult -use cannabis activities within the City limits. Following its adoption, the ordinance officially came into effect on January 19, 2018. The City's involvement with cannabis predates this ordinance, as it had previously implemented regulations pertaining to medical cannabis dispensaries and cultivation.

The decision to formulate this comprehensive regulatory structure stemmed from the acknowledgment of an existing active cannabis industry presence within the C ity prior to the ordinance's passing. With the arrival of the legalization of adu lt-use cannabis in California, the need to establish a standardized regulatory framework in alignment with S tate law became apparent. In recognizing cannabis as a legal land -use concern, the City undertook the responsibility of creating a clear path to com pliance, guiding applications through to occupancy.

This included the strategic designation of appropriate zones for cannabis activities while simultaneously instituting standards to mitigate potential adverse impacts, all while respecting relevant State regulations.

In comparison to many other jurisdictions across the State, Santa Rosa's regulations are notably permissive. The City allows a variety of cannabis activities, such as retail and delivery, cultivation (both indoor and mixed light), manufacturing (both volatile and non -volatile), distribution, microbusinesses, testing, and special events. In contrast to many other jurisdictions, the City has opted not to enforce caps on the total number of cannabis businesses including retail, a distinction that sets it apart.

Allowable Land Use Zones
In accordance with the cannabis policy of the City of Santa Rosa, commercial cannabis operators are permitted to establish themselves in specific zoning districts, contingent upon the approval of the necessary land use permits and the nature of the intended cannabis activity.

Commercial Di stricts : (Retail and Testing)
 Office Commercial (testing also allowed)
 Neighborhood Commercial
 General Commercial
 Community Shopping Center

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Industrial Districts : (Retail and Non- retail):
 Light Industrial
 General Industrial
 Business Park
Permitting:

To navigate the cannabis permitting process in the City of Santa Rosa, prospective commercial cannabis operators need to secure both local land use and occupancy authorization alongside a State license before commencing operations. This entails a sequential series of steps designed to ensure compliance with both local and state regulations.

To initiate this process, the primary step entails acquiring a land us e permit, achievable through either a zoning clearance or a conditional use permit, depending on the nature of the intended cannabis activity. For certain cannabis uses, where no additional use permit is required, a Cannabis Zoning Clearance suffices, enabling applicants to proceed. Conversely, other cannabis activities mandate Temporary, Minor, or Major Conditional Use Permits, evaluated individually to ensure compliance.

Once land use approval is secured, the subsequent step involves applying for a building permit.

This serves to validate conformity with building and fire code occupancy standards, conditions of approval, and pertinent requirements outlined in Zoning Code Chapter 20 -46 (Cannabis).

Additionally, the completion of all cannabis land use permits is followed by the mandatory filing of a business tax certificate. The Zoning Clearance or use permit holds a lasting connection to the land, remaining valid as long as the cannabis operation remains active and aligned with local and State regulations, along with any stipulated conditions of approval. The City maintains an ongoing application process, accepting submissions throughout the year. These applications undergo review and processing on a "first-come, first-served, first-complete" basis.

Figure 9 – Cannabis Permitting Timeframe

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Figure 10 – Cannabis Permitting Flowchart

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Fees:

The City has established a fee structure for the processing of applications. Below are some examples of typical application processing fees associated with cannabis applications:
 Neighborhood Meeting - $1,253
 Pre-application Consultation Meeting – no charge first hour  Concept Design Review – $1,619
 Cannabis Zoning Clearance (new use or change in use/floor plan) - $1,478  Temporary Use Permit (events) - $1,235
 Minor Use Permit - $3,212
 Conditional Use Permit – $14,025
 Public Hearing for Conditional Use Permit - $2,682
Taxation:

On June 6, 2017, Santa Rosa voters approved Measure D implementing a Cannabis Business Tax for the City. The resulting tax ordinance empowers the City to impose a ceiling on cultivation taxes, set at a maximum of $25 per square fo ot (subject to annual adjustments based on the Consumer Price Index) or 8% of gross receipts, as well as 8% of gross receipts for all other cannabis businesses. These taxes maintain financial stability for City services, such as addressing cannabis industry impacts, public safety, affordable housing, and youth programs.

The current tax rates, established in 2017 through Council Resolution 2017 -035, remain unchanged and are outlined as follows:
 Cultivation (2% of gross receipts or $5.00 per square foot)  Manufacturing (1% of gross receipts)
 Distribution (0%)
 Retail (Dispensary) Medical (0%)
Retail (Dispensary) Adult Use (3%)
Current Cannabis Businesses
As of September 2023, the City has issued a combined total of 18 6 Conditional Use Permits and Zoning Clearance Permits for commercial cannabis activity. To date, 10 8 State cannabis license have been issued and are currently active in the City.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

3. Barriers to Entry
Understanding the barriers to entry into the cannabis industry for populations and communit ies who have been disproportionately or negatively impacted by cannabis enforcement is an important factor when developing and implementing an equity program. The success of a local equity program is dependent on the program’s ability to reduce and eliminate these barriers. This section examines the prominent barriers to entry, which can be summarized into the following categories: Financial, Technical, and Criminal.
 F
inancial barriers : These barriers can include the high costs of starting and operating a cannabis business, such as licensing fees, insurance, and other start-up expenses.

Affected communities may have difficulty accessing capital or may lack the financial resources to cover these costs.
 Technical barriers: T hese barriers can include a lack of knowledge about the cannabis industry and the regulatory environment, as well as a lack of access to resources and support to help aspiring cannabis entrepreneurs succeed.  Criminal barriers:

These barriers can include the collateral consequences of cannabis- related arrests and convictions, such as barriers to employment, education, and housing, as well as ongoing criminalization of cannabis in some states. These consequences can make it difficult for affected individuals to enter the legal cannabis industry.

Addressing these barriers is crucial to promoting fairness and equity in the cannabis industry and h
elping affected communities succeed as entrepreneurs. Cannabis equity programs can provide financial assistance, business development resources, and technical assistance to help individuals and communities overcome these barriers and enter the legal cannabis industry. It is important for these programs to be designed and implemented in a way that addresses the specific needs and challenges faced by affected communities.

Financial Barriers
When starting any business, financial barriers are among of the most common obstacles entrepreneurs face due to the high costs of local and State licensing fees and the tax burdens, especially in the regulated cannabis industry. Financial barriers present an even bigger challenge for economically disadvantaged individuals who have been disproportionately impacted by cannabis enforcement.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Access to capital or financing – start -up and operational Starting and operating a cannabis business often requires significant amounts of capital, including funds for licenses, equipment, product, and other expenses. For individuals or businesses who do not have access to capital, it can be difficult to enter th e industry or succeed as entrepreneurs.

Many individuals and businesses seeking to enter the cannabis industry may have limited access to credit, which can make it difficult to secure the financing needed to start and operate a business. This may be due to a lack of credit history, collateral, or other factors.

Furthermore, existing federal banking regulations prevent most financial institutions from lending to cannabis businesses. Hence, cannabis businesses must rely on access to capital from personal wealth, friends and family, and investors for start -up costs. The impeded access to banking services also negatively affects the ability for cannabis businesses to run as efficiently. This barrier is more pronounced for disproportionately affected communities.

Access to real estate
Access to real estate can be a significant barrier to entry for individuals and businesses seeking to enter the cannabis industry, particularly for those who do not have the financial resources to purchase or lease property. This barrier may be due to a variety of factors, including:
 High cost of real estate: The cost of real estate in many areas, particularly in urban areas, can be high, making it difficult for individuals or businesses with limited financial resources to afford the necessary space for a cannabis business.  Limited availability of real estate: In some areas, the availability of real estate that is suitable for a cannabis business may be limited, which can make it difficult for businesses to find the space they need.
 Zoning restrictions: Many localities have zoning laws that regulate the types of businesses that can operate in specific areas, and cannabis businesses may be restricted to certain areas or may be prohibited entirely. This can make it difficult for businesses to find suitable locations.
 Discrimination: Some landlords and property owners may be unwilling to rent or sell property to cannabis businesses due to negative attitudes towards the industry or concerns about legal risks. This can create barriers for businesses seeking to enter the industry.

By addressing these barriers and others, equity programs can help to promote fairness and equity in the cannabis industry and support the success of affected communities as entrepreneurs. This may include providing financial assistance to help with the cost of real estate, working to reduce zoning restrictions, or addressing discrimination in the real estate market.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Licensing and regulatory fees
In addition to traditional business start -up (e.g., real estate, inventory, equipment, staffing, marketing, etc.) and operational costs, regulated cannabis business es typically have a higher financial burden from state and local municipalities’ licensing and regulatory fees. Licensing fees can be a significant barrier to entry for individuals and businesses seeking to enter the cannabis industry, particularly for those who do not have the financial resources to cover these fees.

Licensing fees may be required at various stages of the cannabis business process, including:
 Application fees: Many jurisdictions require applicants to pay a fee when they apply for a cannabis business license. These fees can vary widely depending on the jurisdiction and the type of license being sought.
 Annual renewal fees: In many jurisdictions, cannabis business licenses must be renewed annually, and a fee may be required to do so. These fees can be a burden for businesses with limited financial resources.
 Compliance fees: In addition to licensing fees, some jurisdictions may also require cannabis businesses to pay fees to cover the cost of compliance activities, such as inspections and audits.

By addressing these barriers and others, equity programs can help to promote fairness and equity in the cannabis industry and support the success of affected communities as entrepreneurs. This may include providing financial assistance to help cover licensing fees and other costs or working to reduce or eliminate these fees for certain groups or individuals.

Technical Barriers
Technical barriers can refer to a range of challenges and obstacles that can prevent individuals or businesses from participating in the cannabis industry, even if they are otherwise qualified and capable. Some examples of technical barriers that may be encountered in the cannabis industry include:

Business Ownership
The cannabis industry is highly specialized and requires significant industry knowledge and access to a network of regulated vendors. Additionally, traditional business experience is needed such as business plans, payroll taxes, inventory management, etc. Lastly, the cannabis business marketplace has historically been secretive and underground resulting in information and experience flowing slowly to new interested parties. Again, these barriers are more pronounced for disproportionately affected communities.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Legal and regulatory
The cannabis industry is heavily regulated at the state and local level, and navigating these regulations can be complex and burdensome, particularly for those who are new to the industry.

This can include requirements related to licensing, zoning, and other areas of compliance. Some aspects of the cannabis industry, such as cultivation and manufacturing, require specialized knowledge and expertise. For individuals or businesses who do not have this expertise, it can be difficult to enter the industry or succeed as entrepreneurs.

Awareness
Awareness of the significant business opportunities within the legal and regulated cannabis marketplace continues to be a significant barrier. Moreover, too often, equity -based programs intended to support disproportionately affected communities’ access into the cannabis business have also struggled to be well-known within these communities. Additional outreach is needed.

Distrust of government
Distrust in government can be a significant barrier to the success of cannabis equity programs, as it can discourage affected communities from participating in the programs or engaging with government agencies and officials. This distrust may be bas ed on a range of factors, including historical and ongoing injustices, such as racial profiling and discrimination, and a lack of transparency and accountability on the part of government.

To address this barrier, it is important for cannabis equity progra ms to be designed and implemented in a way that is transparent, accessible, and fair, and that takes into account the specific needs and challenges faced by affected communities. This may include:

1. Involving affected communities in the design and implementation of the program:

Engaging with affected communities and seeking their input and feedback on the equity program can help to build trust and ensure that the program is responsive to their needs and concerns.

2. Being transparent about the program's goals, objectives, and funding sources: Providing clear and transparent information about the program's goals, objectives, and funding sources can help to build trust and accountability.

3. Establishing clear and fair eligibility requirements: Establishing clear and fair eligibility requirements for the equity program can help to build trust and ensure that the program is accessible and fair to all affected communities.

4. Providing ongoing support and assistance: Providing ongoing support and assistance to affected communities as they participate in the equity program can help to build trust and ensure that the program is successful in promoting fairness and equity.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

By addressing issues of distrust and building trust with affected communities, cannabis equity programs can be more effective in promoting fairness and equity in the cannabis industry.

Criminal Barriers
Criminal records (often exposed through background checks) significantly impede an individual’s ability to succeed in this industry, both as an owner and/or an employee. Former felons are often discriminated against by employers and in many cases earn a lower wage, get recommended for jobs less often, and tend to associate with individuals that also have fewer opportunities. In addition, a past criminal history can present significant challenges for cannabis operators such as accessing financing, loans, or even signing a lease.

These barriers can include the collateral consequences of cannabis -related arrests and convictions, such as barriers to employ ment, education, and housing, as well as ongoing criminalization of cannabis in some states. These consequences can make it difficult for affected individuals to enter the legal cannabis industry.

A criminal history, particularly a history of cannabis -related arrests and convictions, can have a significant impact on an individual's ability to enter the legal cannabis industry. This is because many states have laws that disqualify individuals with certain criminal convictions from obtaining licenses to operate cannabis businesses or from working in the cannabis industry.

In some cases, these laws may be based on a blanket ban on individuals with any criminal convictions, regardless of the nature or severity of the offense. In other cases, the laws may only disqualify individuals with certain types of convictions, such as convictions for violent crimes or drug offenses.

The impact of these laws can be especially significant for communities that have been disproportionately affected by cannabis criminalization, as they may have higher rates of arrests and convictions, even for low -level offenses. This can make it difficult for these communities to enter the legal cannabis industry, even if they are otherwise qualified and capable of operating successful businesses.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

4. Best Practices
The following section reviews equity programs in several jurisdictions, including Oakland, Los Angeles, San Francisco, Long Beach, and Sacramento. These reviews aim to compare equity programs and establish the best practices for equity programs. Each of these assessments highlight eligibility requirements for the equity program, available financial assistance for program participants, advantages related to licensing and permitting for participants, and other additional program benefits provided to equity applicants.

City of Oakland - Cannabis Equity Program (2017)
Eligibility Criteria
To qualify for the local equity program, a local equity applicant must:
 Be a resident of Oakland;
 Have an annual income at or less than 80 percent of Oakland Average Medium Income (AMI) adjusted for household size; and
 Either (i) has lived in any combination of Oakland police beats 2X, 2Y, 6X, 7X, 19X, 21X, 21Y, 23X, 26Y, 27X, 27Y, 29X, 30X, 30Y, 31Y, 32X, 33X, 34X, 5X, 8X and 35X for at least ten of the last twenty years or (ii) Was arrested after November 5, 1996 and convicted of a cannabis crime committed in Oakland.

Financial Assistance

Loan Program:

The Equity Loan Program provides Interest-free loans to eligible cannabis equity applicants. This program is funded through their cannabis tax revenue and loan repayments are used to support forthcoming loans for equity applicants. Loan disbursements are structured into several tiers, each designed to support applicants in building and maintaining viable businesses. It's important to note that in September 2020, the loan term was extended from four to six years, allowing for more flexibility. As of June 2022, the loan tier amounts were established as follows:
 Tier 1 - Establish the Business: $5,000
 Tier 2 - Become Compliant: $10,000
 Tier 3 - Open the Business: $15,000
 Tier 4 - Start Operations: $25,000
 Tier 5 - Grow the Business: $60,000

City of Santa Rosa
Cannabis Equity Assessment
October 2023

 Tier 6 - Expand the Business: $35,000
Grant P rogram :

The City of Oakland's Cannabis Equity Grant Program utilizes funding from the Governor's Office of Business and Economic Development ("Go-Biz") to offer grants to entrepreneurs participating in Oakland's cannabis equity program. The grants are distributed in tiers, strategically structured to assist Equity Applicants in building sustainable and thriving businesses. If an Equity Applicant successfully fulfills the requirements of all five grant tiers, they become eligible to receive a maximum grant amount of $150,000 as outlined below:
 Tier 1 - Establish the Business: $5,000
 Tier 2 - Become Compliant: $10,000
 Tier 3 - Open the Business: $15,000
 Tier 4 - Start Operations: $25,000
 Tier 5 - Grow the Business: $60,000
 Tier 6 - Expand the Business: $35,000
Workforce Development Grant:

The City’s Work force Development Grant Program provides up to $50,000 for each equity applicant that recruits, trains, and retains a qualified and diverse workforce. This program is funded through a $1,000,000 grant received from Go-Biz. As of January 8, 2021, all funds available have been allocated to applicants for the Workforce Development Grant Program.

Licensing and Permitting
 Fee waivers and exemptions.
 Permitting Ratio: equity and general cannabis permits are issued on a 1:1 ratio.

Additional Program Services
 Technical assistance and training
 Pro bono Legal Services
 Cannabis Incubator Program
 Shared Use Manufacturing Facilities
 Purchasing of Property Grants
San Francisco – Office of Cannabis - Equity Program (20 17) Eligibility Criteria
To qualify as an Equity Applicant, you must:

City of Santa Rosa
Cannabis Equity Assessment
October 2023

 Apply as a person, not a company.
 Have net assets below established limits for each household. This means you will not qualify as an Equity Applicant if your 1-person household has net assets over $193,500.  Be one of the following:
 the business owner
 own at least 40% of the business and be the CEO.
 own at least 51% of the business.
 a board member of a non-profit cannabis business where most of the board also qualify as Equity Applicants
 an individual with a membership interest in a cannabis business formed as a cooperative  Meet at least three of the following six equity conditions:
 Have a household income below 80% of the average median income (AMI) in San Francisco for 2018.
 Have been arrested for or convicted of the sale, possession, use, manufacture, or cultivation of cannabis (including as a juvenile) from 1971 to 2016.  Have a parent, sibling or child who was arrested for or convicted of the sale, possession, use, manufacture, or cultivation of cannabis (including as a juvenile) from 1971 to 2016.  Lost housing in San Francisco after 1995 through eviction, foreclosure or subsidy cancellation.
 Attended school in the San Francisco Unified School District for a total of 5 years from 1971 to 2016.
 Have lived in San Francisco census tracts for a total of 5 years from 1971 to 2016 where at least 17% of the households had incomes at or below the federal poverty level.

Financial Assistance

Grant P rogram :

San Francisco’s “Step by Step” grant program provides grants to eligible equity cannabis businesses for startup and ongoing costs. Equity businesses can obtain grants for up to $55,000 - $75,000. Grant funds may be used for the following eligible expenses:
 Rent
 Regulatory compliance
 Legal assistance
 Application and regulatory fees
 Testing of cannabis
 Furniture
 Fixtures and equipment
 Capital improvements
 Banking and escrow fees
 Accounting services
 Packaging and materials
 Marketing and advertising
 Tax liability of the cannabis business

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Licensing and Permitting
 Fee waivers and exemptions.
 Priority processing of applications.

Additional Program Services
 Technical assistance and training
 Professional Development
 Security Consulting
 Permitting and Grants Services
 Pro bono Legal Services

City of Sacramento - Cannabis Opportunity Reinvestment and Equity (C.O.R.E.) Program (2018)
Eligibility Criteria
 Classification 1: Lives or have lived in a low-income household in Sacramento AND: a) Have been arrested in Sacramento for cannabis–related crime between 1980-2011 or b) An immediate family member who meets the description above.  Classification 2: Lived in a low-income household in the following zip codes for 5 consecutive years between 1980 and 2011: 95811, 95815, 95817, 95820, 95823, 95824, 95826, 95828, 95818, 95838 and 95832.
 Classification 3: Businesses with no less than 51% ownership by Classifications 1& 2 individuals.
 Classification 4: CORE Program Incubator
 Classification 5: Cannabis Social Enterprise with no less than 51% ownership by Classifications 1& 2 individuals.

Financial Assistance

Loan Program:

The CORE Capital Loan Program is a 6-year, zero-interest loan program offered to cannabis equity businesses, funded by grants from Go -Biz. Repayments from loans are reinvested into the program to provide ongoing loan opportunities for CORE participants. The maximum initial loan amount for first -time applicants is $50,000, provided they have a signed business lease for a location or own a premise. A Verified CORE individual has the option to apply for $50,000 for each leased or owned location. Loan Applicants can request Follow-on Loans in $50,000 increments.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Grant Program:

The CORE Grant Program is a noncompetitive, tiered grant process wher e the amount allocated to each tier is determined by the number of qualified applicants. Grant awards range from a minimum of $10,000 to a maximum amount determined by the total number of valid applications received during the application period. The program is funded through grants funds received by Go-Biz.

Qualifying Categories/Tiers:
 Business with No BOP (Tiers 1-4)
 Tier One - Applied for CUP
 Tier Two - Has CUP (Approved or Existing – must be consistent with the use for proposed cannabis business)
 Tier Three - Building Permits Issued
 Tier Four - Certificate of Occupancy Issued
 Business with BOP (Tier 5)
 Funding can be used for any regulated cannabis business purposes: inventory, equipment, rent, marketing, etc.

Licensing and Permitting
 Fee waivers and exemptions.
 Priority processing of applications.
 Exclusive access to any future storefront dispensary permits.

Additional Program Services
 Technical assistance and training
 Cannabis Incubator Program
City of Los Angeles – Cannabis Social Equity Program (2017) Eligibility Criteria
To be verified as a Social Equity Individual Applicant, an applicant must satisfy two of the three following criteria:
 Cannabis arrest or conviction in California for any crime relating to the sale, possession, use, manufacture, or cultivation of Cannabis that occurred prior to November 8, 2016.  10 years of cumulative residency in a Disproportionately Impacted Area as defined by police reporting districts.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

 Qualify as Low Income in the 2020 or 2021 calendar year.

Financial A ssistance

Grant P rogram :

The Social Equity Entrepreneur Development Rental Assistance Grant Program (SEED Rental Grant Program), funded by Go -Biz, offers grants to equity applicants who have active cannabis applications and have secured leases or bindin g Letters of Intent. Retail equity applicants can receive $50,000 in grant funds distributed over three disbursements. Non-retail equity applicants may receive a single disbursement of $10,000 in grant funds.

Licensing and Permitting
 Fee waivers and exemptions.
 Priority processing of applications.
 Retail permit lottery
Additional Program Services
 Business, Licensing, Compliance and Technical Assistance  Pro-bono and Low-bono Legal Services Program
City of Long Beach – Cannabis Equity Program (2018)
Eligibility Criteria
To qualify as an Equity Applicant, you must meet the following eligibility criteria:
 Be a natural person; and
 In the last year, have had an annual family income at or below eighty percent (80%) of the Los Angeles-Long Beach-Glendale (LA County) Area Median Income (AMI), and a net worth below $250,000; and
 Have lived in a Long Beach census tract for a minimum of five (5) years, either consecutively or in total, where at least fifty-one (51%) of current residents have a household income at or below eighty percent (80%) of the Los Angeles Area Median Income; and
 Meet at least one of the following criteria:
 During the period of 1971-2016, was arrested for, convicted of, or adjudged to be a ward of the juvenile court for any crime under the laws of California or any other

City of Santa Rosa
Cannabis Equity Assessment
October 2023

jurisdiction relating to the sale, possession, use, manufacture, or cultivation of cannabis; or
 Has a parent, sibling, or child who, during the period of 1971-2016, was arrested for, convicted of, or adjudged to be a ward of the juvenile court for any crime under the laws of California or any other jurisdiction relating to the sale, possession, use, manufacture, or cultivation of cannabis.

Financial Assistance

Grant P rogram :

The Cannabis Equity Direct Grants Program, funded by GO Biz, offers grants to local cannabis equity entrepreneurs. Grants are distributed at four key stages of the business license process, aiding Equity Applicants in establishing sustainable cannabis businesses. The grant amount varies depending on the type of cannabis business and the size of the facility if an Equity Applicant fulfills all milestones' requirements.

Grant Milestones:
 Milestone #1: Securing Your Business Location
 Milestone #2: Drawing Up Plans
 Milestone #3: Starting Construction
 Milestone #4: Opening Your Business
Licensing and Permitting
 Fee waivers and exemptions.
 Priority processing of applications.
 Application Workshops
 Exclusive access to any future storefront dispensary permits.

Additional Program Services
 Technical assistance and training
 Community Reinvestment Program
 Adult-use cannabis businesses must submit plans outlining their strategies for supporting and reinvesting in communities that have been most affected by the war on drugs.
 Cannabis Equity Employment Program
 Adult-Use Cannabis Businesses must have Equity Employees working for at least 40% of the total annual work hours at the establishment.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

City of Santa Rosa
Cannabis Equity Assessment
October 2023

5. Community Outreach and Feedback
In addition to the analysis conducted in Section 1 above, outreach and education are an essential element of this Equity Assessment as they help to ensure widespread dissemination and comprehension of the assessment’s findings by the communities that the study is intended to benefit. The Equity Assessment gathered data through stakeholder interviews, public community meetings, and surveys, which helped provide policy recommendations to guide the City with the development of its equity program.

Online Survey
In May of 2023, an online survey was conducted to ensure broad community engagement. The survey was strategically advertised and promoted across various c hannels to encourage participation from residents throughout the City. The primary objective of this survey was to delve deep into the historical impact of cannabis policies on the City. By gathering valuable insights and perspectives from the community, the aim was to gain a profound understanding of the implications and consequences of past cannabis regulations. Additionally, the survey sought to harness the collective intelligence of the participants to generate innovative ideas and practical suggestions on how to effectively develop and implement a robust cannabis equity program in Santa Rosa.

Community Meetings
On Monday, June 26, 2023, a virtual public community meeting was organized by the City in collaboration with SCI Consulting Group. The meeting took place via the Zoom platform and spanned from 6:00 PM to 8:00 PM, providing a two -hour window for participants to engage in discussions. The primary purpose of this gathering was twofold: to disseminate crucial information about the City's forthcoming Cannabis Equity Assessment and to actively seek public input and gather valuable perspectives on the community's needs, opportunities, and obstacles in the development of the City’s Cannabis Equity Program.

The meeting aimed to foster an inclusive environme nt where attendees could receive comprehensive details regarding the proposed Cannabis Equity Program. It served as a platform for the City and SCI Consulting Group to share insights, guidelines, and objectives related to the program. Participants had the opportunity to gain an in-depth understanding of the City's vision, goals, and strategies for promoting social equity in the cannabis industry.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Moreover, the meeting strived to encourage active engagement from the community by providing a space for public comments and suggestions. Attendees were invited to share their thoughts, perspectives, and recommendations on ways the City could enhance and broaden the existing Cannabis Equity Program. This feedback was deemed vital to ensure that the program aligned with the needs and aspirations of the community it intended to serve.

Stakeholder Interviews
Primary data was collected through one -on-one interviews with key stakeholders in the City of Santa Rosa. The purpose of the interviews was to provide insight on the community, opportunities, challenges, and to help identify key points of interest related to the City’s Cannabis Equity Program. Between July 17, 2023, and August 30, 2023, a total of 9 interviews were carried out. The interviewed stakeholders came from various sectors, which included:
 Current cannabis operators
 Prospective equity applicants
 Cannabis Equity Technical Assistance Providers
 Cannabis Attorneys
 Local business leaders
Summary of Feedback and Common Themes
The feedback provided by the interview ees underscores the multifaceted nature of challenges facing equity applicants in the cannabis industry. T he interviewees collectively emphasize the need for comprehensive and inclusive cannabis equity program that address es financial, technical, and educational barriers, as well as support for the sustainable success of equity applicants in the industry. Participants also underscore the importance of clear eligibility criteria, direct grant funding, local control, and accountability mechanisms to ensure the equity programs' effectiveness and impact. Below is a summary of the oral testimony and comments received from the stakeholder interviews and community meeting regarding the City’s Cannabis Equity Program.

Barriers to En t ry and Financial Challenges:
 Interviewees consistently express upfront costs, including permits, licenses, and operational expenses, are major barriers for equity applicants. These costs can be especially challenging for individuals from marginalized communities with limited financial resources.
 Financial constraints and the lack of access to capital are major obstacles for equity applicants.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

 Complex application processes, zoning regulations, and rapidly changing industry rules are cited as additional barriers. Unfamiliarity with these processes can discourage potential equity applicants, emphasizing the importance of educational resources.  There's a need for better resources, such as technical assistance and educational programs, to help applicants navigate the complexities of the industry and improve their chances of success.

Direct Grant Funding and Financial Support
 Direct grant funding is highlighted as a key component of effective equity programs.  The need for upfront grants and direct financial support is stressed across interviews.  Interviewees believe that such funding is essential to help equity applicants cover initial costs and establish a foothold in the industry.
 Grants should be flexible, have fewer restrictions on usage, and provide essential financial support for applicants.

Mentorship, Technical Assistance, and Workforce Development:
 Technical assistance programs are seen as a critical component of successful equity programs. These programs would provide guidance to equity applicants, helping them navigate legal, compliance, and business development aspects of the cannabis industry.  Interviewees note that mentorship and guidance from experienced industry professionals can be invaluable for equity applicants who are new to the business world.  Workforce development programs are suggested to provide options for individuals who may not want to run their own businesses but are interested in employment within the cannabis industry.

Eligibility C r iteria and Equity Targeting:
 Interviewees stress the importance of equity programs having clear and effective eligibility criteria that address historical disadvantages and support marginalized communities.
 Interviewees suggest a variety of eligibility criteria that prioritize justice-involved individuals, those with past cannabis industry involvement, and low-income qualifiers.  The idea of distinguishing between long-standing community members and newcomers to the cannabis industry is repeatedly emphasized. This is aimed at ensuring that the program benefits those with historical ties to the community's struggles.  The importance of not imposing strict City residency requirements, or limiting the City’s program to just City of Santa Rosa residents, is noted to avoid potential legal complications. However, using the location of the business as a relevant criterion is suggested.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Ownership Share and Corporate Involvement:
 Interviewees recommend setting a minimum ownership share percentage for equity applicants to prevent large corporations from exploiting the program. Some propose a tiered ownership system that prioritizes individuals with more significant historical disadvantages.
 The concern about large corporations dominating the industry at the expense of local equity applicants is a shared sentiment. The interviewees stress the need to empower local businesses to compete fairly.

Ongoing Support and Post -L
icensing Assistance:
 While initial grants are important, interviewees highlight that ongoing support is necessary for equity operators to thrive beyond the initial stages.  Resources that aid in post-licensing operations, compliance, and sustainable business practices are essential for the long-term success of equity applicants.

Local Control:
 Interviewees voiced concerns about the possibility of outsourcing the management of the City's equity program to neighboring jurisdictions. They underline the crucial role of the City in preserving local control over the program's design and implementation.

Inclusive and Diverse Programs:
 Interviewees consistently advocate for a focus on diversity and inclusivity within the cannabis industry.
 Encouraging participation from women, minorities, and other underrepresented groups is seen as a way to rectify historical inequities.

Preventing Exploitation and Accountability:
 In other parts of the State, there have been reported cases of equity applicants facing exploitation and encountering predatory contracts with their business partners. It is imperative to establish oversight measures to prevent such occurrences within the City of Santa Rosa.
 Creating mechanisms to ensure accountability, transparency, and proper usage of program resources is crucial.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Equity Programs' Urgency and Effectiveness:
 Interviewees emphasize the urgency of implementing effective equity programs. As fee waiver funds deplete, the need for local programs to provide support to equity operators becomes even more pressing.
 Learning from the shortcomings of existing equity programs is seen as essential to crafting more inclusive, impactful, and sustainable programs that address the specific needs of Santa Rosa's community.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

6. Findings and Recommendations
The following section presents key findings from this Equity Assessment and presents recommendations regarding policy options to enhance and improve equitable access and ensure diversity and inclusion in the cannabis industry. To support policymakers in shaping and executing the City's cannabis equity program, we have formulated the subsequent recommendations.

1. Equity Program Eligibility Criteria
Finding #1: Equity program eligibility criteria should focus on the inclusion of populations and communities disproportionately impacted by cannabis enforcement.

Analysis of cannabis -related arrest data indicates BIPOC populations have been subjected disproportionately by cannabis enforcement. Furthermore, the analysis determines there is a nexus between areas of high concentrations of low -income populations, education attainment levels, and a high number of cannabis arrests. Careful consideration should be placed on establishing the eligibility criteria. First and foremost, the eligibility requirements should focus on serving the communities and populations that we re disproportionately affected by cannabis enforcement. The requirements should be adequately structured and defined to capture the majority of individuals who have been previously impacted by the war on drugs.

The City should consider the following criteria:
 Cannabis conviction or arrest history
 Immediate family member with a cannabis conviction or arrest history  Low-income status
 Residency
 Ownership
 Eligibility Tiers

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Recommendation: Conviction History
The City’s equity program should prioritize individu als who have been previously arrested or convicted for cannabis-related offenses. At a minimum, having a previous cannabis-related arrest should be required for eligibility. Rather than limiting cannabis-related-arrests and convictions to those that occurred in Santa Rosa, arrests or convictions within the state could also be considered for eligibility. This approach recognizes that convictions have a profound impact on an individual no matter where they occurred. Furthermore, it is recommended that this cr iterion is also applicable to having an immediate family member with a cannabis conviction or arrest history as well.

Recommendation: Low -i
ncome Status
Low-income status is a common eligibility requirement used by many equity programs developed elsewhere in the State. Establishing a defined low -income status helps to limit participation for those in need of assistance. Typically, this is based on a certain percentage of annual family income that is below the Area Median Income (AMI), such as at or below 80 percent of the AMI.

Low-income status can be confirmed and verified with federal and state income tax returns, payroll stubs, social security benefit letters (i.e. Medi- Cal/CalWORKs, supplemental security income, or social security disability)
Recommendati o
n: Residency Consideration
To ensure the City's program benefits Santa Rosa residents, who have been impacted by cannabis enforcement and the War on Drugs, the City should implement a residency requirement. At a minimum, the City’s equity program should be available to both current and former Santa Rosa residents. Similar to other equity programs established in California, the residency requirement can be based on cumulative years of residency or a minimum. For example, the City of Long Beach requires a minimum of 3 years, the City of Sacramento requires 5 consecutive years, and the City of Oakland requires no less than 10 years. In addition, residency requirements could be extended to include individuals who have attended school in Santa Rosa or own a business in Santa Rosa.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Recommendation: Ownership Consideration
The City should consider requiring an ownership percentage threshold that enables equity applicants to benefit from ownership yet be flexible enough to accommodate various ownership structures. Social equity programs established elsewhere in the State often require at least 51% ownership, which ensures equity applicants maintain majority ownership and decision -making power, and thus providing protection from being taken advantage by potential inves tors or business partners. However, requiring 51% ownership may unintentionally reduce the interest of outside investors and, consequently, act as a barrier to equity applicants. It is recommended that the City consider an ownership percentage between 40%-51%. Nonetheless, a certain amount of oversight and resources, such as legal assistance, should be available to equity applicants.

Recommendation: El igibility Tiers
The City should consider establishing a tiered eligibility structure to provide proportional benefits to equity applicants. Under a tiered structure, more valuable services can be provided to individuals who have been impacted the most, but also optimizes the use of limited resources.

2. Equity Program Application and P ermitting
Finding #2: The equity program application and permitting process should be structured to ensure equity applicant success and incentivize ongoing support.

Recommendation:

To improve equity applicant success and incentivize ongoing support for equity applicants, the City should consider the following:
 Priority Applications and Permit Processing: Consider a prioritized permit process for equity applicants for a quicker approval process.
 Provisional Approval: Consider allowing for provisional approval of permits, prior to an applicant securing a location to operate, to allow equity applicants to overcome financial barriers. Provisional approval may incentivize potential investors to provide capital investments and assist the applicant with finding a location to operate.  Amnesty Program: Consider an amnesty program to encourage existing nonconforming businesses, operating without required permits and licenses, to transition to the legal market.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

3. Equity Program Be nefits and Services
Finding #3: The City’s equity program must develop and implement benefits/services for equity applicants that address and mitigate barriers to entry.

Recommendation:

The City should consider including a variety of services provided to equity applicants to mitigate and address the barriers to entry identified in Section 3 of this report.

Barriers Recommendations
Financial • Loan or grant program for start -up capital and ongoing business expenses
• Fee deferral program or reduced application fees
• Coverage of fees associated with training or certification programs
Administrative/
Technical
• Application assistance and permitting workshops
• Cannabis regulatory compliance training
• Pro bono legal assistance
Business Acumen • Creation of training curriculum or partnership with local academic institutions or businesses
• General business development training
• Cannabis-specific business training
• Cannabis employment training
• Apprenticeship/mentorship programs
• Leverage existing resources and partnerships
Criminal • Create a program for expungement services to assist those with past cannabis convictions to get their records

4. Expungement Program
Finding #4: A criminal history can limit an individual’s ability to gain employment, apply for government assistance, and/or obtain a loan.

Recommendation:

The City should consider developing a program to host community expungement events for individuals who have been disproportionately impacted by cannabis enforcement in coordination with the District Attorney’s Office, the Courts, and other relevant partners.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

The purpose of a cannabis expungement program is to help individuals with past cannabis-related arrests or convictions clear their criminal records, with the goal of reducing the negative im pact of these records on their lives. Cannabis expungement programs may be implemented at the state or local level and may be offered through the criminal justice system or through other agencies or organizations.

The primary benefit of a cannabis expungement program is that it can help individuals with past cannabis-related convictions overcome barriers to employment, education, housing, and other opportunities. For example, many employers and landlords use criminal background checks as a screening tool, a nd a criminal record can make it difficult for an individual to secure a job or housing. By clearing an individual's criminal record, a cannabis expungement program can help to increase their opportunities and improve their quality of life. In addition to helping individuals, cannabis expungement programs can also serve a broader social and economic purpose by promoting fairness and equity in the criminal justice system and helping to reduce the negative impact of cannabis criminalization on affected communities.

5. Workforce Development Opportunities
Finding #5: City of Santa Rosa should advance workforce development opportunities in the cannabis industry.

In the cannabis industry and other industries alike, a common barrier to success is a lack of training for high -quality, well-paying jobs. As the cannabis industry continues to grow, there is an immediate need for skilled and knowledgeable employees. It is essential that businesses have access to skilled and local talent through dedicated workforce development efforts. By advancing workforce development opportunities in the cannabis industry , equity programs can help to increase the participation and success of affected communities in the industry.

Recommendation:

Some potential strategies for advancing workforce development in the cannabis industry include:
 Require all cannabis businesses to provide equitable employment (i.e. requiring cannabis businesses to hire a certain percentage of individuals that qualify as equity applicants).
 Creation of a cannabis training program.
 Establish partnerships with existing curriculum developers to assist with entrepreneurship and workforce development.
 Leverage existing cannabis training programs.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

6. Equity Program Funding
Finding #6: City of Santa Rosa should continue to leverage State grant opportunities and consider allocating a portion of cannabis tax revenue to fund equity program.

Sufficient funding plays a pivotal role in ensuring the success and effectiveness of the City's Equity Program. Equally important is the necessity for the City to establish an infrastructure with adequate staffing, comprised of individuals who are well- trained and educated, to provide support and guidance to equity applicants as they navigate the complex application and permitting process. It's worth noting that shortcomings in this supportive infrastructure have proven to be a stumbling block for several other municipalities across the State that have embarked on the implementation of similar equity programs.

Recommendatio n:

The City should continue to leverage grant opportunities through the GO -Biz’s Cannabis Equity Grants Program for Local Jurisdiction. However, relying solely on State grants is not a sustainable approach. Therefore, the City should consider diversifying its funding sources, which may include allocating funds from cannabis tax revenue or exploring alternative financial avenues.

7. Public Outreach and Education
Finding #7: The City should conduct public outreach and education to increase awareness of the equity program and reduce social stigma.

The transition from an illicit to a regulated, legal cannabis market is hampered by distrust in government, especially for those who have been victimized by cannabis enforcement and by those enforcing government laws. Restoring trust between disproportionately affected communities and the government is essential to the success and effectiveness of a local equity program. Furthermore, the negative stigma surrounding cannabis use and cannabis business ownership by people of color and minorities presents additional barriers due to the fact that these individuals are often times perceived as criminals and drug dealers, rather than entrepreneurs.

Recommendation:

The City should consider developing and implementing outreach and educational campaigns focuses on increasing awareness, restoring government trust, and destigmatizing cannabis use and business ownership. There are several strategies that can be used to increase awareness of a cannabis equity program and promote its goals and objectives:

City of Santa Rosa
Cannabis Equity Assessment
October 2023

 Community outreach and education: Engaging with affected communities and providing education and information about the cannabis equity program can help to increase understanding and participation in the program. This can be done through community meetings, workshops, and other forms of outreach and engagement.  Media and public relations: Using the media and public relations strategies to promote the cannabis equity program can help to raise awareness and understanding of the program among a wider audience. This may include press releases, media interviews, and other forms of public communication.
 Partnerships and collaborations: Partnering with other organizations and groups that share the same goals and objectives as the cannabis equity program can help to amplify the program's message and reach. This may include collaborating with community- based organizations, advocacy groups, or other stakeholders.  Social media and online presence: Establishing a strong online presence through social media and other online platforms can help to promote the cannabis equity program and reach a wider audience. This may include creating a website or social media accounts and regularly updating them with information about the program and its activities.

8. Program Data Collection
Finding #8: The City should collect data on non-equity and equity cannabis applicants to monitor and measure the success of its equity program.

Recommendation:

The City should consider incorporating the following data metrics into the application, permitting and permit renewal process:
 Number of equity applicants to apply
 Types of drug related offenses
 Income status
 Race
 Ethnicity
 Gender
 Sexual identity
 Residency status
 Ownership structure
 Workforce characteristics
 Total number of employees
 Number of local employees
 Employment Status

City of Santa Rosa
Cannabis Equity Assessment
October 2023

 Equity program-specific data
 Number of applicants eligible for equity program
 Number and types of services provided to equity applicants  Number of equity program applicants to receive licenses

9. Ongoing Program Monitoring and Updates
Finding #9: The City should continue to monitor and update its equity program.

Recommendation:
 Monitor and share progress of the Equity Program;
 Monitor and share trends in the emerging legal cannabis industry;  Identify areas for course correction and/or unexpected consequences; and  Demonstrate an ongoing commitment to data-informed decision-making and strategic planning to ensure Santa Rosa’s strong transition to a legal cannabis industry.

City of Santa Rosa
Cannabis Equity Assessment
October 2023

Appendix A: The City of Santa Rosa Cannabis Equity Website

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Appendix B: Cannabis Equity Assessment Survey (English)

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Appendix B: Cannabis Equity Assessment Survey (Spanish)

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Appendix C: Community Meeting Invitation