Social Equity Program

To qualify as a Tier 1 Social Equity Applicant, you must be able to demonstrate that you have a low income AND a prior California cannabis conviction, or low income AND at least 5 years cumulative residency in a disproportionately impacted area.

Tier 1 Social Equity Applicants will receive 2:1 priority processing for retail licenses (storefront dispensary or delivery service), and for Microbusiness licenses that include retail. This means that the Department of Cannabis Regulation will issue two retail licenses to Tier 1 Social Equity Applicants for every one retail license it issues to a general applicant.

Applicants in Tiers 1 through 3 will also receive priority processing for non-retail activity at a 1:1 ratio with non-Social Equity Applicants.

The following definitions apply when determining eligibility for the Social Equity Program:

1 – Low Income

Low Income is defined as income 80% or below the Area Median Income. According to the Survey, the Area Median Household income was $51,538. To qualify as a low-income Tier 1 SEP Applicant, you must be able to prove that you earn $10,803 per year or less.

2 – California Cannabis Conviction

California Cannabis Conviction refers to a cannabis-related crime that occurred prior to November 8, 2016, and could be classified as a citation or misdemeanor under current California law.

3 – Disproportionately Impacted Area

Disproportionately Impacted Area refers to specific zip codes which have an unusually high rate of cannabis convictions. To qualify under Tier 1, a SEP applicant must have lived in any of the following zip codes for a total of at least 5 years, or at least 10 years to qualify for Tier 2.

A Tier 2 Social Equity Applicant shall meet the following criteria at time of applying for a License:

1. Low Income and a minimum of five years cumulative residency in a Disproportionately Impacted Area
2. A minimum of 10 years cumulative residency in a Disproportionately Impacted Area. A Tier 2 Social Equity Applicant shall own no less than a 33 1/3 percent equity share of the business that would benefit from the issuance of the License.

A Tier 2 Social Equity Applicant shall enter into a Social Equity Agreement with the City to provide business, licensing and compliance assistance to Tier 1 Social Equity Program participants.

A Tier 2 Social Equity Applicant shall receive the following benefits:

1. Business, licensing and compliance assistance
2. Expedited renewal processing
3. Program site-specific conditions.

A Tier 3 Social Equity Applicant shall enter into a Social Equity Agreement with the City to provide capital, leased space, business, licensing and compliance assistance to Persons who meet the criteria to be a Tier 1 or Tier 2 Social Equity Applicant.

A Tier 3 Social Equity Applicant shall provide Tier 1 Social Equity Applicants access to property with no rent and with prorated utilities for a minimum of two years.

The minimum requirements of the property provided to the Tier 1 Social Equity Applicant shall be:

1. Cultivation – minimum 500 square feet or 10 percent of Tier 3 Social Equity Applicant’s Business Premises, whichever is greater
2. Manufacturing – minimum 800 square feet or 10 percent of Tier 3 Social Equity Applicant’s Business Premises, whichever is greater
3. Testing – minimum 1,000 square feet or 10 percent of Tier 3 Social Equity Applicant’s Business Premises
4. Distributor – minimum 1,000 square feet or 10 percent of Tier 3 Social Equity Applicant’s Business Premises
5. Nonstorefront retail – minimum 1,000 square feet or 10 percent of Tier 3 Social Equity Applicant’s Business Premises
6. Storefront retail – minimum 1,000 square feet or 10 percent of Tier 3 Social Equity Applicant’s Business Premises, whichever is greater
7. Microbusiness – minimum 800 square feet or 10 percent of Tier 3 Social Equity Applicant’s Business Premises, whichever is greater.

A Tier 3 Social Equity Applicant shall receive the following benefits:

1. Expedited renewal processing
2. Program site specific conditions.

Social Equity Applicants Tiers 1 and 2 shall make a good faith effort to have no less than 50 percent of the weekly hours of the Licensee’s workforce performed by Employees whose primary place of residence is within a three-mile radius of the Business Premises.

Of those Employees, 20 percent shall be Social Equity Workers and 10 percent Transitional Workers. Social Equity Applicant Tier 3 shall make a good faith effort to have no less than 50 percent of the weekly hours of the Licensee’s workforce performed by Employees whose primary place of residence is within a fivemile radius of the Business Premises. Of those Employees, 30 percent shall be Social Equity Workers and 10 percent Transitional Workers.

Transitional Worker is defined in Section 104.12 (m).

Social Equity Worker is a Person who is:

1. 1. Low Income and has a prior California Cannabis conviction as defined in Section 104.20(b)
   2. Low Income and a minimum of five years cumulative residency in a Disproportionately Impacted Area.

At a minimum, a Licensee is required to contact local community-based organizations, City of Los Angeles Work Source Centers, and other such similar organizations to facilitate job outreach, development, and placement services.

A Licensee is required to provide a detailed semiannual report on the first business day of January and the first business day of July every year that provides evidence of its outreach efforts, including the number of persons interviewed, and details on who was hired to satisfy the good faith requirement.