It’s no secret that merchants in the cannabis industry and those hoping to jump in on opportunities struggle to do so. It is very challenging to enter an industry that is considered high-risk, with state law constantly at odds with federal law. Trying to find the funding necessary to even get off the ground is another huge hurdle.
From the beginning, California has led the way in legalizing marijuana and efforts to make the industry acceptance more widespread. In September of 2018, California passed a statewide equity bill. Municipalities including Oakland, San Francisco and Los Angeles led the way, setting up their own equity programs with their own rules and regulations. The new state bill gave resources to support the programs.
These programs vary greatly. In Los Angeles, for example, the equity licenses are awarded on merit according to a schedule. In Oakland, they are passed out randomly, no different than a lottery drawing. Oakland issues two types of equity licenses: one for retail licenses, and another for other types of cannabis businesses.
Both types contain incentives to get general applicants to participate in the equity program; the goal is to bring even bigger resources to the whole system to help marginalized equity applicants. According to reports, Oakland’s equity program set aside half of all available retail licenses, keeping them exclusively for equity applicants. Under the program, general applicants are awarded a license in an industry that is otherwise inaccessible to them (if their equity partner wins the lottery drawing).
It would seem that the city is not tracking what happens after applicants receive their permits. In fact, they can’t even tell you how many of the permitted non-dispensary businesses (equity or not) are currently operating.
At first the program was praised as one of the first in the country to attempt to repair damage that befell minority communities and other cities during the drug war. Ultimately, these programs are aimed at ensuring that people of color get a foothold in the industry. Critics are just afraid that the equity program is not living up to its promise. Although, it is still the early days.
Proponents are still adamant that the program is crucial to Oakland’s cannabis industry. Likewise, advocates are optimistic and committed to finding solutions that will ensure its success.
“I do think there is more that we can do,” said Councilwoman Nikki Fortunato Bas, who wants the city to direct all of its marijuana tax revenue to the equity program. “The investment in this industry, I think, could be targeted to stem the displacement of Oakland’s black community, as well as to provide real opportunities for folks who have been involved in the criminal justice system.”
Alternative Marijuana Dispensary Funding
The cannabis industry has a long way to go before funding is as easy as walking into your local bank. Traditional providers are still caught between state and federal law, and shy away from taking on the risks of working with even the most successful marijuana businesses. This is where alternative providers have stepped in to fill the gap.
The team of specialists at First American Merchant understand the challenges of the cannabis industry and offer marijuana dispensary funding that is easy, fast and hassle-free to apply for. Your business can have cash it needs to grow and expand in as little as 24 hours.Get Started Now