California Agency Awards Over $50 Million in Cannabis Tax Funds to 31 Organizations

The California Governor’s Office of Business and Economic Development (GO-Biz) announced that it is once again giving a handful of grants to various health departments and non-profit organizations on May 25. The agency is utilizing cannabis excise and cultivation taxes to fund $50 million in fiscal year 2022-2023 and awarded funds through the California Community Reinvestment Grants Program. Recipients are permitted to use the funds to help people find jobs, treat mental health or substance abuse, and provide legal services.

In order to qualify, organizations must meet various requirements, such as being in good standing for at least six months prior to grant solicitation, have tax-exempt status from the IRS and California Franchise Tax Board, and be labeled as “current” or “exempt” in the California Attorney General’s Registry of Charitable Trusts, among others.

This fiscal year’s grant recipients include 31 organizations that specifically aim to support communities affected by the War on Drugs. The highest grants awarded were $3 million for Centers for Equity and Success, Inc., Shields for Families, the Los Angeles Department of Public Health, UnCommon Law, and the Monterey County Health Department. Other grants include First Place for Youth, Goodwill of the San Francisco Bay, United Friends of the Children, and more.

According to a GO-Biz press release, the agency plans to open up the next wave of grants for application later this summer in August 2023.

The California Department of Cannabis Control (DCC) initially announced the launch of the program with $30 million in first grant recipients for fiscal year 2019-2020 in April 2020. In 2021, the California Community Reinvestment Grants Program granted $15 million to various organizations. Most recently last year in June, GO-Biz announced the distribution of cannabis tax funds in the amount of $35.5 million between 58 grants recipients.

In February, the DCC announced that it was offering $20 million in grant programs for the purpose of supporting and expanding the state cannabis industry. “Expanding access to California’s retail cannabis market is an important step towards protecting consumer safety and supporting a balanced market,” said DCC director Nicole Elliott. “The retail access grant program ultimately seeks to encourage legal retail operations in areas where existing consumers do not have convenient access to regulated cannabis.” Six study initiatives were approved at the University of California, Los Angeles, three at University of California, Berkeley, and single grants for colleges such as University of California, Davis, Cal Poly San Luis Obispo, and Cal Poly Humboldt.

Also in February, the DCC announced that it would be allocating $20 million to the Local Jurisdiction Retail Access Grant, which helps local governments enact their respective cannabis licensing programs. It also announced an additional $15 million that would be granted to support equity in the cannabis industry.

California continues to fund cannabis research efforts as well. In April, 16 colleges were granted nearly $20 million for the purposes of studying cannabis. These initiatives ranged in topics from studying legacy genetics, potency, and more. “It is the Department’s aspiration that these studies will advance the body of scientific research, further our understanding of cannabis, and aid to the continued development and refinement of the legal framework,” said DCC chief deputy director Rasha Salama. “These studies will provide valuable insights on topics of interest to California’s consumers, businesses, and policy makers and the Department looks forward to sharing them once they are completed.”

Just a few weeks ago, a California task force issued a draft of its final report, which concluded that the state issue an apology to Black Americans for discrimination experienced as a result of the War on Drugs. Additionally, it called for the payment of funds to Black Americans for “each year of residency in California during the 49-year period between 1971 and 2020.” The final version of the report will be sent to congress on June 29.

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San Diego Receives Cannabis Equity Grant To Boost Local Weed Industry

At long last, San Diego is receiving grant money from the state as part of a program designed to help cities bolster their local cannabis industries.

The southern California city announced last month that it is receiving $880,000 from the Governor of California’s Office of Business and Economic Development (GO-Biz) as part of a statewide grant program aimed at promoting equity in the regulated marijuana market.

Under the initiative, California provided millions of dollars to cities throughout the state with their own cannabis equity grant programs.

Major cities such as Los Angeles, San Francisco, and Oakland all got in on the grant program. Last spring, officials in San Francisco announced that they had received $4.5 million from the state of California to fund its cannabis equity grant program.

But the $880,000 gift last month was the first such grant money to be awarded to San Diego. 

That is because San Diego didn’t establish its own grant program until last year, which, as the San Diego Union-Tribune noted, was “several years after other large cities like Los Angeles, San Francisco, Oakland, Sacramento and Long Beach.”

“Receiving this critical funding source is vital to jump-starting our Cannabis Equity Program,” Lara Gates, the deputy director of San Diego’s Cannabis Business Division, said in the city’s announcement. “These dollars will provide a solid foundation for our initial cannabis equity applicants to get a strong foothold in the legal cannabis market.”

In its announcement of the grant last month, the city said the the “money will support residents seeking to enter the legal cannabis industry in San Diego through funding grants to cover permit and license fees and associated start-up property costs while providing access to the cannabis industry workforce.” 

Those funds “will be dispersed locally, supporting the state’s effort to advance economic justice for populations and communities harmed by cannabis prohibition,” the city said in the announcement, adding that the grants “will help potential business owners pay for permitting and licensing fees, access education and training, and receive property rental assistance for entrepreneurship in various sectors that support local cannabis businesses,” which include “finance, marketing, advertising and legal services, among others.”

In determining the qualifications for the grant program, the city of San Diego “found the biggest hurdles to entering the industry are lack of capital, lack of training, problems finding suitable sites and complex government regulations,” according to the Union-Tribune.

“The historical enforcement of drug laws produced profound disparities in business ownership, wage earnings and mass incarceration within the criminal justice system for African American/Black, Latino and Native American/Indigenous communities,” Kim Desmond, the San Diego Chief of Race and Equity, said in last month’s announcement. “An acknowledgment of historic institutional racism and systemic inequity is key to understanding disparities in the cannabis industry.”

The money awarded to San Diego represented the “the seventh-largest grant, after Oakland and Los Angeles with nearly $2 million each, as well as Sacramento, San Francisco and Long Beach at $1.5 million each and Humboldt County with $1.2 million,” according to the Union-Tribune.

The city of San Diego said that it “was among 16 cities and counties across the state to receive a combined $15 million in grants, funded through tax revenue generated from statewide recreational cannabis sales.”

In its cannabis equity assessment last year, the city of San Diego found that Black and Latino residents accounted for roughly 50% of total cannabis arrests since 2015, although they comprise only 29% of the city’s population.

The assessment also found that nearly 70% of cannabis business license holders are white.

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California Uses Cannabis Tax Revenue to Grant $35.5 Million to Community Organizations

The California Governor’s Office of Business and Economic Development (also referred to as GO-Biz) announced on June 1 that it would be granting $35.5 million worth of cannabis tax revenue to community efforts.

The funds come from the California Community Reinvestment Grant program, which will be directed to organizations that help with job placement, mental health treatment, substance use disorder treatment, system navigation services, legal services to address barriers to reentry, and linkages to medical care.

“We’re proud to announce 78 grants totaling $35.5M in awards through the California Community Reinvestment Grants (CalCRG) program. These grants will help serve communities across CA that have been disproportionately impacted by the War on Drugs,” the organization wrote on Twitter.

In a press release, GO-Biz shared the need to use cannabis tax funds for specific communities that are in need of aid. “Harsh federal and state drug policies enacted during that period led to the mass incarceration of people of color, decreased access to social services, loss of educational attainment due to diminished federal financial aid eligibility, prohibitions on the use of public housing and other public assistance, and the separation of families,” the release states.

Furthermore, GO-Biz Director and Senior Adviser to Gov. Gavin Newsom Dee Dee Myers shared a statement regarding the continued success of the program. “Now in its fourth year, the California Community Reinvestments Grants program continues to be an important tool for communities that still face systemic restrictions and barriers to opportunity and equity,” said Myers. “This latest round of awards will support the economic justice and well-being of communities across our state that have been disproportionately impacted by the War on Drugs.”

A total of 78 organizations were chosen across California, located in the counties of Alameda, San Francisco, Los Angeles, Riverside, San Bernardino, San Diego, and more.

Among the recipients receiving the highest amount of $900,000 includes JobTrain, GRID Alternatives Greater Los Angeles, Inc., Community Partners as a fiscal sponsor of Los Angeles Regional Reentry Partnership, and Recovery Café San Jose. Most others, such as the Legal Aid Foundation of Los Angeles, Inland Valley Drug and Alcohol Recovery Services, Kitchens for Good, Inc., will be receiving $450,000.

In 2021, the program sent out 58 grants for a total of $29.1 million and in 2020, $30 million was earmarked for a variety of cities and counties.

Since California legalized adult-use cannabis in 2018, the state has collected $3.76 billion in total tax revenue, according to a press release posted on May 26 by the California Department of Tax and Fee Administration. This includes $1.91 billion from cannabis excise taxes, $467.75 million from cultivation taxes and $1.38 billion from sales taxes.

Recently, Gov. Newsom’s budget proposal set aside $150 million to reduce cannabis taxes. He said in a press statement that the temporary reduction will help aid small cannabis business owners, and also curb illegal sales. “This is [the] beginning of a process from my humble perspective, in terms of my thinking,” Newsom said. “This will be a multi-year process to get that black market, get it on the retreat—not the ascendancy—and to get the retail and responsible adult-use market on steady ground.”

Earlier this year, California announced that it would be granting nearly $100 million to local governments and jurisdictions that would help bolster their cannabis programs, and make them more efficient. The Department of Cannabis Control Director Nicole Elliot explained that this grant money would help communities with specific needs. “Significant funding is being directed to process improvements and environmental assessments, both of which will help the state and local governments achieve short- and long-term goals,” Elliot said. The most highest amount was awarded to the city of Los Angeles for $22,312,360, Humboldt County with $18,635,137, and Mendocino County with $17,586,406.62.

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