Equity Program

Post Midterm Elections: Michigan Missouri and Utah Can Take These Steps to Ensure a Fair Allocation of Cannabis Licenses

Citizens in Michigan, Missouri, and Utah voted to expand the legalized marijuana industry. State and local authorities must ensure that these voters share in the economic boom.

The commercialization of cannabis provides state and local regulators with a unique opportunity to help residents gain employment; encourage the growth of local businesses and services, and reduce taxes through an offset of cannabis sales taxes.  Regulators can reach these goals while preserving competition and innovation within the industry by ensuring that the scoring and selection methodology for distributing licenses among competitive applicants is fair, objective, quantitative and transparent. States and communities should review existing scoring methodologies and use a standard that provides the most benefits to residents:

  • Provide municipalities with a template ordinance that standardizes objective licensing decisions;

  • Reassess scoring methodology to ensure prior cannabis convictions are not the bases for rejecting a license if they are or will be expunged under the new laws; 

  • Ensure municipalities use a fair and open process for accepting and approving special use permits, especially in the presence of competing applications;

  • Publicize scoring and weighting methodology for competing applicants and the final scores; 

  • Provide small business resources to entrepreneurs including access to capital, regulatory support services, and operational planning; and

  • Provide transparency regarding tax revenues and local use of proceeds.


In a flurry of activity, the California Legislature passed twenty-one cannabis bills in the last weeks prior to the end of the regular session on August 31st. The Legislature has presented Governor Jerry Brown with fifteen (15) bills for him to either sign or veto.  An additional six (6) bills will be presented to the governor following the engrossment process.

The scope of the bills passed by the California Legislature in the last couple of weeks of August has been monumental.  The bills address important and meaningful issues raised by constituents.  The highlights include the state driven expungement of marijuana convictions; compassionate care programs that permit the donation of cannabis products to individuals in need; the ban of cannabis in alcoholic beverages; the protection of personal data from the federal government; the expansion in industrial hemp cultivation; restricted provisioning of marijuana to animals;  equitable expansion of the cannabis industry; and the administration of cannabis on to children on schoolsites.

The following fifteen (15) bills were presented to the governor for his signature.  The links below provide the THCReg.com summary article and the final bill text.

The following six (6) bills are being enrolled and will be presented to the governor shortly. The links below provide the THCReg.com summary article and the final bill text.


The California Assembly passed the third reading of SB-1294 Cannabis: state and local equity programs. The enacts the Cannabis Equity Act of 2018, which provides local jurisdictions with funding for assistance from the Bureau of Cannabis Control to help local equity applicants and licensees identified by the jurisdiction.  The funding can help cover small business support services to those persons from economically disadvantaged communities that are negatively impacted by cannabis production.  Assistance can also be structured in the form of (1) tiered or waived fees, (2) help obtaining a business establishment, (3) assistance in obtaining capital investment, and (4) recruitment, training and retention of disadvantaged workers.

The bill also requires the Bureau to, on or before July 2019, to (1) publish all approved local equity ordinances and model equity ordinances created by advocacy groups or experts, and (2) publish a report to the California Legislature on the progress of the programs that received funding.

Readers should note that Massachusetts published guidance yesterday that included the state's recommendations for local equity programs.  The link below provides additional detail.

MA Guidance:  Creating an Equitable Industry


The Massachusetts Cannabis Control Commission published Guidance on Equitable Cannabis Policies   for Municipalities, which contains recommendations on how municipalities can create an equitable marijuana industry.  The guidance is intended to help municipalities develop cannabis policies that are aligned with the Social Equity program, and promote an equitable and meaningful participation of persons dispproportionately affected by the enforcement of previous cannabis laws.  State law also provides the Commission with the authority to take remedial measures against a municipality if there is evidence of discrimination or barriers to entry in the regulated cannabis industry.

Massachusetts' recommendations for creating an equitable cannabis industry include:

  • Allow various types of businesses:  Communities should consider allowing different types of license types that meet the strategic goals for the community.  For example, micro businesses and craft cooperatives promote small businesses.

  • Consider whether caps are necessary:  Offering limited cannabis business licenses in commercial parts of town prevents opportunities for small businesses.  

  • Zoning:  Communities should consider carefully whether to expand the 500 feet buffer around schools.

  • Host community agreements:  Clearly identify the licenses, permits and the process for operating a marijuana business.

  • Selection process:  Institute an objective, transparent selection process that prioritizes review for state-designated economic empowerment applicants. Municipalities should consider instituting preferences for state- designated Social Equity Program participants, or applications from companies owned by marginalized groups. A municipality should evaluate all applicant's diversity plan and understand how the impact will have a positive impact on communities that have been disproportionately harmed by the enforcement of previous cannabis laws.