When millions of Californians sheltered in place because of COVID-19, marijuana consumption soared.

The state’s cannabis sales, which had doubled between 2018 and 2019, grew even faster during the first nine months of the pandemic.

California’s cannabis industry brought in $4.4 billion in 2020 raising a question: Who reaps the benefits?

Charles Ball, a Black marijuana business chief financial officer in Los Angeles, says that most of the market is dominated by non-hispanic whites, a demographic that makes up less than one-third of the population.

Contrast that with cannabis-related arrests. When California voters legalized recreational marijauana consumption in a popular vote in 2016, African Americans, who make up just 9 percent of residents, accounted for 32 percent of all cannabis-related arrests, according to LAPD data.

Yet in 2019 — the year after dispensaries began to sell legal weed in the city — Black Angelenos were even more disproportionately targeted by police; they made up 42 percent of arrests related to illegal marijuana.

Ball pointed out that Black and brown people have been put in jail for marijuana for years, and now face a cannabis market that can feel to some African American entrepreneurs like it is working against them.

An examination of data from Cannaclusive, a nonprofit group focused on encouraging equity within the marijuana industry, calculated that just 25 of Los Angeles’s 418 licensed marijuana businesses are owned by people of color. Black Angelenos control only 3.6 percent of the cannabis industry in Los Angeles.

It is unclear exactly what percentage of licensed cannabis businesses are owned by Latinos, who make up roughly half of the local population, but the city has made clear that African American and LatinX business owners have yet to gain an equitable foothold in the marijuana industry.

Angelenos wanted to make things right.

Los Angeles’ Department of Cannabis Regulation, along with community activists and organizers, put together a suite of social equity reforms aimed at putting people of color — especially those previously charged with marijuana-related crimes — ahead in California’s legal marijuana-industry.

It’s been three years since the City of Los Angeles launched a legal framework for the buying and selling of recreational marijuana.

Angelenos who had hoped to benefit from such reforms are expressing growing frustration with a process that they say has failed to meet its aspirations for equity. ity.

From Weed Dealer to Entrepreneur

Compton-born Virgil Grant has plenty of swag and an air of professionalism that gives the impression that he can back it up.

He owns and operates three licensed dispensaries under his brand, California Cannabis. He is also the co-founder of both the Southern California Coalition, the largest cannabis trade organization in the Southlands, and the California Minority Alliance, which assists people of color seeking to launch marijuana businesses.

He's come a long way. Grant began dealing weed illegally in the early 1990s, selling out of his father’s, Dee’s Liquor, in Compton.

“We were the shakers and movers of the cannabis industry when it was an underground movement,” he recounts of the years before California legalized medical marijuana in 1996.

Grant, now in his 50s, recalls the early years of cannabis activism as a movement formed by Angelenos who found themselves at odds with the law.

In 2004 Grant opened a medicinal dispensary south of the 10 FWY in Compton, California.

But, like many of the once-licensed operators in places like Compton and Gardena, Grant’s dispensaries were raided by the federal government in 2008. California had created a legal framework, but for the feds, it was still illegal.

Despite all six of his dispensaries being licensed at the time, Grant was arrested and charged with one count of involvement in a drug conspiracy, four counts of aiding and abetting the distribution of marijuana near a school and four counts of “maintaining a drug-involved premises within 1,000 feet of a school.”

United States Attorney Thomas P. O’Brien was the prosecutor in Grant’s case. O’Brien made it clear during the trial that feds could not care less about medical marijuana or the Californians who had chosen to legalize it.

“The dispensaries involved in this case were simply drug-dealing enterprises designed to generate profits for those who chose to ignore federal law and flout state law.”

Grant served six years in federal prison for the charges, at the time of his arrest all six of his dispensaries were licensed by the state of California.

Grant pictured in his dispensary describes the concerns ofwhy he agreed to his plea deal. Photo courtesy: Virgil Grant

Grant served his time and returned to Los Angeles in 2014, full of passion and eager to implement his vision for equity within the cannabis industry.

But, as time passed Grant has become a vocal critic of the policies’ failures. “The finish line has been moved a-million-and-one-times.” Grant said.

California may have legalized recreational cannabis use, but it is up to municipalities to implement the rules for the legal sale of marijuana products.

Because of this, selling cannabis in Compton, as well as other cities in Los Angeles County like Gardena remains illegal. This means that after years of raids and evolving city and state policies, there still isn’t a single licensed marijuana dispensary in Compton today.

That doesn’t mean there aren’t dispensaries, just that they are unlicensed and subject to crackdowns by local police and federal authorities.

Putting Pot Equity On The Map!

Ball Family Farms currently works as a cultivator and distributor of cannabis with aspirations of fully integrating their operations in 2021 to grow, distribute and sell entirely their own product, which Charles Ball claims is rare within the marijuana industry.

Charles Ball of Ball Family Farms, describes barriers facing social equity applicants. Photo courtesy: Ball Family Farms

The Ball brothers have run into institutional barriers that many social-equity entrepreneurs face in LA: high fees, costly rents and a Department of Cannabis Regulation that has yet to license a single new retail dispensary, Grant said.

But even as social equity applicants are unable to earn any profit the costs keep adding up, including the licensing fees themselves.“In order to acquire a license it’s $50,000,” Ball said.

DCR has given out grants of up to $10,000 to social equity applicants; which fails to even remotely cover initial licensing costs or the flood of other fees and expenses involved in launching a cannabis business.

Also, the process to obtain a license can be painfully slow.

In such circumstances many entrepreneurs simply can’t stay afloat and sink into debt.

“They should have given the licenses immediately and allowed people to open up. Instead they’re spending years paying a lease even though they haven’t made one dime,” Grant said.

DCR representatives declined multiple opportunities to comment on the criticisms of Los Angeles’ social equity program.

Activist Ralina Shaw criticizes Los Angeles' implementation of social equity policy for marijuana dispensaries. Photo courtesy: Nai Vasha

Ralina Shaw is Vice President of Marketing and Communication for 4thMVMT, a nonprofit organization that supports candidates who qualify for L.A.'s social equity program for personal, business and leadership development.

She said a social equity applicant must have signed a lease for a commercial real estate location in the city before applying.

Beyond the rent, an applicant also has to ensure that they have all the equipment needed to operate up to code, Shaw said. They are also required to hire experts to inspect components of the business from security to the installation of costly ventilation systems.

The cost to acquire, maintain and keep a typical cannabis dispensary operational in Los Angeles up to code is about $1.5 million per year, Shaw said.

For Aja Allen the owner of Sixty Four & Hope, a social-equity entrepreneur working with 4thMVMT to open a dispensary, doing so is about more than making money. It is about fairness and equal opportunities.

Allen said she is the first woman of color who identifies as part of the LGBT community to own a marijuana dispensary in the city.

Allen’s dispensary is under construction, and like all social-equity entrepreneurs she must maintain her retail property without being able to legally profit from it until she is given permission to open.

That means she pays rent and other expenses each month — an arrangement that is only possible thanks to a patient investor she found through 4thMVMT.

For Allen, who's engaged to marry her partner, the extended delay in opening her dispensary doors has put a hold on her ability to begin her new family.

As construction clanged and the sounds of industrial drills filled the air in her under-construction dispensary, Allen expressed frustration about the regulatory delays that have made her put her life on hold and undermined her finances in the middle of the pandemic.

“I feel like… the process was so lengthy that they almost wanted to just bleed us dry,” Allen said.