Social Equity in Cannabis: The Fresno Model Debuts

By Fresno City Councilman Clint Olivier

Fresno made its official entry into the post-Prop. 64 world in November of last year when voters overwhelmingly approved Measure A, the city’s cannabis tax, with a whopping 71 percent of the vote. In December, the city council approved regulations for licensed cannabis outlets, meaning California’s fifth-largest city is finally coming online.

One of the emerging topics for elected officials, industry players, and activists in Fresno is the topic of social equity in cannabis, and the role it should play in the new industry. Social equity is the term that describes policies that attempt to offset the injustices done to individuals throughout the decades of the War on Drugs – the majority of those adversely affected being People of Color and those of limited economic means. Four California cities have already adopted social equity programs: Oakland, San Francisco, Sacramento and Los Angeles.

The spirit and purpose of social equity, according to Marijuana Business Daily, is “to bring more minorities and economically disadvantaged individuals into the state’s cannabis industry.” MBD continues: “The new initiatives are generating high hopes among supporters – and harsh criticism from marijuana industry insiders who believe the programs have unleashed more problems than remedies.”

In Fresno, a city with a population of nearly 530,000, a small but dedicated group of people, doing double-duty as pro-cannabis advocates as well as equity-in-cannabis activists, have put in long hours to keep pressure on city hall to include some kind of social equity element as part of any policy. The regulations have been adopted, but they’re waiting to find out what happens next.

At least one councilmember has already called for the city to do more to expand equity opportunities, hinting that a more robust, or onerous (depending on how one views social equity), policy may be on its way in 2019.

However, Fresno may have found the sweet spot that might equally satisfy and frustrate those on each side of the issue. Without specifically using the term per se, Fresno has taken three major steps to provide for social equity:

First, the city’s new regulations eliminate barriers to entry for anyone with prior cannabis convictions. The city council believes it’s important that people with previous cannabis criminal convictions be allowed to participate in the new industry. Those individuals will be allowed to hold any positions within the industry in Fresno, ranging from front desk clerk to owner.

Second, the city’s cannabis tax measure provides for the creation of a “Community Benefit Fund,” which allocates 10% of all tax revenue for neighborhood revitalization in and around locations where cannabis companies of all types are operating. What’s more, the fund will be overseen by a panel of appointees from the neighborhoods themselves. The idea is to use the money to mitigate any effects the businesses may have in the communities in which they are located, and encourage public participation and dialogue about cannabis in Fresno.

Lastly, the regulations require each prospective licensee to provide its own social equity element as part of the application. Nothing specific is called for. Applicants will be encouraged to be creative in formulating their equity pieces. Fresno is a diverse city with many different constituencies living in dozens of unique neighborhoods. It is hoped that by requiring each applicant to furnish its own equity plan, a variety of strategies as diverse as the city’s neighborhoods will be submitted. For example, an applicant may sponsor a employment training program for at-risk youth, while another may hire a fixed percentage of employees from disadvantaged neighborhoods. Funding an anti-drug education and interdiction program for kids could be another idea. The possibilities are endless. In the end, social equity could make the difference between competing proposals, when Fresno’s applications are being scored.

Fresno’s strategy provides a comprehensive way forward to mitigating any effects licensed cannabis businesses may have in neighborhoods. It will engage constituencies and will attempt to right at least some of the injustices of the failed War on Cannabis. The regulations are now in the hands of the city manager, who will spend the first half of the New Year transitioning America’s 34th largest city from a place where the illicit market thrives under prohibition, to a regulated market that will serve as a model for other cities in California and beyond. Stay tuned.

Fresno city council member Clint Olivier is the preeminent municipal Cannabis policy authority in California’s conservative Central Valley. Olivier began his advocacy in the post-Prop 64 environment with the challenges of both a city administration and council majority publicly opposed to cannabis licensing. Through coalition building and media outreach, Olivier changed hearts and minds, securing a unanimous 2017 vote to license retail outlets in Fresno, California’s fifth-largest city.