Seattle City Council Committee on Finance and Housing, February 16, 2022

Thank you very much for joining the Finance and Housing Committee meeting.

I'm Teresa Mosqueda, Chair of the Finance and Housing Committee for Seattle City Council.

The meeting will come to order.

It is 9.31 a.m.

I'm Teresa Mosqueda, as I noted.

Please, Madam Clerk, would you please call the roll?

Madam Clerk, you are still on mute.

Sorry about that, Council Member Herbold.

Here.

Councilmember Peterson?

Here.

Councilmember Nelson?

Present.

Councilmember Lewis?

Present.

Madam Chair Mosqueda?

Present.

Madam Chair, that is five present, none absent.

Wonderful, thank you very much.

Colleagues, thanks again for joining us today.

We do have a full panel conversation for us a panel from representatives from across the nation to talk to us about cannabis equity policies that they have worked on and led on.

Very excited to hear from the local jurisdictions and the process that they went through.

We will also have a presentation from the Finance and Administrative Services Department, our very own department, who previewed some of the work that they're doing on cannabis equity and how to make sure that there's greater opportunities for small businesses, workers, and that we are looking at in the post-initiative world, how we can create greater equity across our region.

I'm excited to have our guests here today.

We are going to build on the committee meetings that we had last discussion, and hear also how Seattle is leading on a number of issues, especially with the Finance and Administrative Services Office.

We had the chance to hear directly from folks within the community last panel meeting, and in the upcoming meetings, we will have the chance to hear from additional small business owners, as well as community members.

I want to pause here to make sure that folks get a chance to look at the agenda.

If there's no objection, today's agenda will be adopted.

Hearing no objection, today's agenda will be adopted.

And I'm going to take a quick chair's prerogative to offer a chance for Gerald Hankerson and Devin, Alisa, excuse me.

Abdullah to say a few words to welcome us before we hear from public comment.

These are representatives from Mayor Harreld's office who have expressed some interest in sharing some words here today and some encouragement for the community and committee as we consider this conversation.

So please go ahead, Devin.

I see you off mute.

Take it away.

For the record, I'm Devin Abdallah from Mayor Harrell's office.

And basically just want to say Mayor Harrell is really excited to be partnering with Council Member Mosqueda on basically increasing the cannabis equity in our city and hopefully working on some legislation to improve it.

And I'll leave it over to Gerald.

Thank you very much, Devin.

Hello, Gerald.

Thank you, Council Member Mosqueda, Devin.

I'm Gerald Hankerson.

I'm the Labor Liaison for Mayor Harrell's office.

And like Devin said that we are absolutely excited to be here today to make some great legislation for the city of Seattle.

Wonderful.

Thank you very much for those opening comments.

And with that, we will go ahead and lead us into our public comment discussion here today.

And then we will hear more on the two topics related to cannabis equity after public comment.

Colleagues, at this time, I'd like to open up public comment.

We do offer the chance for people to provide public comment at the beginning of every meeting.

For those who are calling in for the first time, please note that you need to use the same number that you registered with to sign up for public comment.

You will hear an indication when it's your time to speak that you have been unmuted.

You'll hear that phrase, but that's also your indication that you need to hit star six on your own line to unmute yourself and make sure your phone's off of mute.

You'll have two minutes to provide public comment and we'll tee up that clock here momentarily.

And with that, we're gonna jump right into public comment.

Please note when you're done with your public comment, that is also the best way to continue listening is to hang up and dial in on the listen in line or you can watch on Seattle Channel who is broadcasting live right now.

The first three speakers are Cody Funderburk, Lynn Domingo, and Gabrielle Powell.

Good morning, Cody.

You have two minutes.

Please go ahead.

Hi, thank you.

Hello, everyone.

My name is Cody Funderburk.

I'm a Bud Funder and medical cannabis consultant at Ponder, which is a small dispensary in the Central District.

About nine months ago, we officially became a union store and we're now in the process of bargaining and negotiating our union contracts through USPW 21. Many of the challenges we face as industry workers stem from a lack of cannabis worker protection.

In particular, as a store that was recently robbed at gunpoint, we have an urgent need for workplace safety training, including modern techniques for minimizing cannabis reliance on cash.

For example by integrating cryptocurrency-based transactional payments and by requiring secure access entry points to licensed dispensaries we can prevent violent robbery without wasting more money on SPD's over-inflated budget.

Of equal importance our cannabis industry here in Seattle is falling behind and we're long overdue for cannabis equity policy revisions that bolster the success of cannabis workers.

We must be aware of the extensive legacy of the war on drugs and the war on cannabis in particular in perpetuating cycles of incarceration and disenfranchisement among predominantly Black and Brown communities.

These disparities persist today and clearly affect the demographic outcome of ownership in our cannabis industry.

Nearly all retail dispensaries in Seattle are owned by White men which is a symptom of generations of inequities that have culminated in modern worker exploitation.

At my dispensary in particular the owner has been threatening to close the business ever since we unionized and has put the property up for sale.

Our rights as workers to collectively bargain is undermined if we aren't able to strengthen successorship worker protections in the event of a business being sold.

I'm going to conclude my thoughts on this panel by urging local cannabis tax reform that addresses these issues and attempts to restoratively correct the racist legacy of the war on cannabis.

Thank you.

Thank you very much, Cody.

Good morning, Lynn.

Lynn will be followed by Gabrielle Paul.

Good morning.

Good morning Council Member Muscata and committee members.

My name is Lynn Domingo and I'm a resident of Seattle.

I'm here to comment on Seattle's equity policy on cannabis.

I am an advocate to end the prohibition on cannabis and strengthen the understanding and knowledge on the use of recreational medical marijuana.

I began using marijuana or cannabis as a healthier alternative to pain relievers, anti-anxiety, and other supplements.

My overall health has deteriorated because of a compromised immune system.

I have advocated for increased access to cannabis for several years, even before I was 502. and continue to advocate on the federal level as well.

It is important to end the prohibition on marijuana because it is safer than opioids, pain-relieving relievers, street drugs.

As I've come out of after a loss of a kidney and eye disorders, I have chosen not to use pain meds, but in the wider community, we have seen that other people have successfully beaten any addiction or have used other alternatives to pain relievers.

I care about my community and I care about the equity in the industry.

I live in North Seattle and I'm horrified to hear about the recent robberies at the cannabis shops.

I support safer and better working conditions for workers and much of the cannabis policy has left out the communities of color like me.

And the city of Seattle needs a policy to continue the movement for justice and in the industry.

I'm excited to be a part of this.

Thank you.

Thank you very much.

Next will be Gabriel Paul, followed by Dustin Lambrow.

Good morning, Gabriel.

Good morning, city council members.

My name is Gabriel Paul.

I'm the president of the Seattle Chapter of the Eighth Pillar of Rondo.

Our organization represents workers and community.

The workers in the cannabis industry have largely been left out of the economic boom in this industry since recreational cannabis became legal in Washington just 10 years ago.

Those disproportionately harmed by the war on drugs are not the ones who have profit the most from the industry.

Retail store owners are almost exclusive white men, while the workers they employ are overwhelmingly women, black, indigenous, and people of color.

Cannabis workers are demanding more training and additional career ladders within the industry.

Most workers in the industry do not make more than minimum wage, plus tip, and most don't have health insurance.

By ensuring everyone has a fair shot to succeed in the industry, we raise standards for all workers.

Community stakeholders have engaged in a long process to come up with ideas for how this work can be accomplished.

And we look forward to continuing to engage with each other of each of you as this process moves forward with urgency.

I would like to leave you with this historical fact.

12 million Africans were shipped in the bottom of ship.

Two million died on their way, only to be branded like cattle and commodities, then transported to pigs, cotton, and tobacco, which paved the way for many of the billionaires of today.

No compensation.

no reparation for their descendants.

Yet today, in this 21st century, you members of the council have a chance to change, to make it better with social and economic justice for workers and education for our young people.

Thank you very much for the time.

Thank you very much.

The next person is Dustin Lambrough.

Dustin will be followed by Trayana Holliday.

Good morning, Dustin.

Hi, good morning, Chair Mosqueda and members of the committee.

I'm Dustin Lambrough, second day here on the job as Political and Legislative Director at UFCW 21, encouraging you all today to take swift action to tackle cannabis reform.

Cannabis is a booming industry here in Seattle.

Just in our city alone, retailers sold more than $185 million in cannabis products in 2021. In Washington State, there are over 33,000 jobs in the industry, and we estimate that about half of those are here in Seattle.

And despite that boom, the people who grow, prepare, and sell cannabis products have not reaped many of those benefits.

I know you're going to hear today about some of the things that other cities have done to tackle reform.

But here in our city, the community has been meeting for a long time to come up with ideas for what would work here.

This is an equity issue prior to recreational legislation or legalization in 2012. The medical cannabis industry was both a generator of economic opportunity for both black and brown communities and a provider of medical-grade cannabis for cancer patients and people suffering from chronic pain.

Now, though, over 99% of the cannabis retail owners in Washington state are white, and BIPOC people have been largely excluded from ownership and high-quality employment in the cannabis industry.

A targeted effort here in Seattle would improve working conditions for the cannabis workforce through paid-for safety training and opportunities to build skills towards more highly paid positions within the industry to ensure that those are finally able to share in benefits of this booming industry.

And we look forward to working with you all in the mayor's office as we move forward in this process to develop policy for what that works for Seattle.

Thank you so much for giving me some time today.

Thank you very much Dustin.

Congratulations on your new position.

Triana Holiday, I see you listed as up to speak next, but not present, so we'll move on to Paul Thomas, followed by Paula Sardinas.

Good morning, Paul.

Can you hear me?

Thank you, Council.

Thank you, Council Members, for taking the time.

The workers in the cannabis industry have largely been left out of the economic boom in the industry since recreational cannabis became legal.

in Washington just 10 years ago.

Those disproportionately harmed by the war on drugs are not the ones who have profited the most from the industry.

Retail store owners are almost exclusively white men, while the workers they employ are overwhelmingly women and BIPOC community.

Cannabis workers are demanding more training and additional career ladders within the industry.

Most workers in the industry do not make more than minimum wage plus 10. and most don't have health insurance.

By ensuring everyone has a fair shot is the key in the industry that will raise standards for all workers.

Thank you for your time.

Wonderful, thanks for your time.

And I do see that Trayana Holiday is present, so we'll go back to Trayana, followed by Paola Sardinas, and then we'll conclude with Adan Espino Jr.

Good morning, Trayana.

Hi, good morning City Council.

Thank you so much Council Member Mosqueda.

I am here in support of worker solidarity in the cannabis industry.

I think it's very important that the council really consider everything that everyone is saying in regard to worker solidarity and support for cannabis workers.

Ultimately there is a strong effort here by not just cannabis workers and folks in the industry but also community members who understand the heavy impact that the war on drugs has had on displaced communities, those communities really of the black majority and brown majority.

So I think it's important that council do what they can to remedy these efforts by providing these opportunities for worker solidarity in the cannabis industry.

It's a step in the right direction towards eradicating the harmful effects of the war on drugs and different impacts in the city like weed and seed.

We've seen that in the black community in particular.

And the one thing that we can start to do right is ensuring that cannabis workers do have that sense of solidarity from the city council perspective.

So thank you so much for allowing me this time.

I really hope that you guys are listening to these workers and everybody who's on here to share with regard to cannabis worker solidarity.

Thank you.

Excellent.

Thank you very much.

And Paula Sardines, I see you listed as interested in speaking but not present.

So we'll come back to you before we conclude if you log in.

Again, remember to use the same number that you signed up for public testimony.

And our last speaker present is Adan Espino Jr.

Good morning, Adan.

Good morning.

Can you hear me?

Yes.

Thank you.

Good morning.

Thank you, Council Member Mosqueda.

So I am Adonis Fino, Executive Director to the Craft Cannabis Coalition, an association of over 50 cannabis retail stores and small business owners.

We just want to say we appreciate the continued conversation on the cannabis industry.

We look forward to the upcoming presentation.

We do have some initial concerns.

First and foremost, we see in the presentation slides that there have been two dozen stakeholder engagements 200 community members and city departments participating, yet none of our members, the cannabis retail stores, have been included in these conversations or have had really any input in the proposals that seem to be circulating.

We appreciate the committee and the chair's commitment to being inclusive going forward, and we look forward to working together.

Lastly, we want to note that it seems like other cities that have also engaged in this equity work for the cannabis industry spend a considerable amount of time studying both the cannabis market within their city and the broader issue of how social health and being cannabis can look.

And this was done with industry participation.

So we look forward to these ongoing conversations and working with the committee further.

Thank you so much.

Much for calling in today and just as a A quick update for colleagues and community.

I think that you'll see on the presentation some conversation that community partners have been having over the last year plus.

That's where that number comes from.

But as the council begins to engage in these discussions, We too will be pulling together various forms.

So I look forward to seeing more of the industry folks and hearing more about the proposals in front of us and getting some feedback.

I don't see Paola Sardinia present here with us today.

So colleagues, I am gonna go ahead and conclude public comment for today.

That does conclude our public comment and we are gonna go ahead and move on to the items of business on today's agenda.

Madam Clerk, could you please read in item number one?

Agenda item number one, National City Panel on Cannabis Policies and Programs for briefing and discussion.

Okay, excellent.

Well, I am thrilled.

We have a very robust panel here with us today.

And then after this first agenda item, we're going to hear from our Finance and Administrative Services Department as well, who reported in our December meeting that they were doing some work on cannabis equity as a general topic from their Race and Social Justice Initiative Task Force.

as one of the elements that they were looking into.

So that'll be our full agenda for today.

I'm glad that we're able to give this some robust time.

We have guests who are from across the country, and I will summarize who is going to speak, and then we'll just jump right into it.

But as a quick recap from our last meeting, we did have a chance to start this discussion in the Finance and Housing Committee with the nexus to looking at how much this industry is currently bringing in.

and what workers are experiencing on the front level, and how opportunity to open up small businesses is either being shared or not being shared, as the panelists mentioned with us, with folks who want to start their own opportunities for entrepreneur businesses, and looking at how we can right some historic wrongs as it relates to the war on drugs.

We heard loud and clear that reform is needed, but there was three R's, reform, redistribution, and restoration.

and the cannabis workers who presented were really from the front line within stores in Seattle who talked about wanting greater training, upward mobility, entrepreneurship opportunities, and job protection and safety.

In addition, we are going to have future meetings that will include some folks from the business community, community organizations, and additional workers to talk through some policy concepts that are going to stem from the discussions that we're having today.

And I look forward to meeting with anybody who is interested as well.

We've been reaching out to a handful of folks, but please do know if you're interested in meeting with us, we'd be happy to do that.

Colleagues, today we have in front of us a really esteemed panel, so let's get right into it.

We have a Boston City Council member, Linda Edwards, who is a champion on reform and licensing and within the city of Boston has been working to improve how the city approves and oversees local cannabis industry.

We're gonna hear from Assistant to the City Administrator of Oakland, Gregory Minor, who in Oakland has been working to help establish a Cannabis Regulatory Commission.

We will hear from Aubrey Borchers from the city and county of Denver, where Denver and the local county have created social equity applications.

We'll also hear from Sarah Woodson.

I see you, Sarah.

Looking forward to hearing from you.

Sarah is the CEO of the Color of Cannabis from Denver, whose organization is working with a wide swath of jurisdictions looking at removing stigma around social equity applications.

And the founder and CEO of VICO from Los Angeles, that's Tamika Drew, who is going to help bring a conclusion to this panel to talk about how jurisdictions have applied social equity licenses to small business owners.

Oh, excuse me, we do have one more, two more speakers.

Okay, we're gonna get to everybody here.

Larissa Wool Davina Smith from the City of Oakland, where Cannabis Opportunity Reinvestment and the City Corps Program help to assist individuals who are committed to facing barriers and addressing those barriers when trying to create their cannabis businesses.

Again, following this, we will have the opportunity to hear from the Finance and Administrative Department.

I also want to note, I'm going to ask colleagues to hold their questions on this panel until we get through this esteemed list of individuals who are here to speak with us today.

And before I do, Gerald or Devon, did you have anything else you'd like to add to open it up?

Thanks for your opening comments at the beginning of the meeting.

No, I don't have anything.

Thank you, Councilmember.

I think you covered everything.

Okay, wonderful.

Thanks for being here with us today.

And I know that there was a time crunch, so I wanted to make sure to see if Councilmember Edwards is here with us from the City of Boston, and we will start there.

And if not, then we will go ahead and go to the next person on the list.

Madam Clerk, is Councilmember Edwards here with us?

Okay.

Just a quick heads up for our IT crew.

If you do see Council Member Edwards, please go ahead and admit her and we'll come back to hearing from the Council Member at the top when she comes back in.

With that, the next person to speak is Assistant to the City Administrator of Oakland, Gregory Minor.

Gregory, are you here with us?

Good morning, Gregory.

Thanks for joining us virtually from the city of Oakland.

I'm actually gonna be speaking with some folks from Oakland right after today's meeting.

So it's a West Coast, day for us.

Thanks for joining from Oakland.

Please go ahead.

No problem.

Good morning.

Can you hear me OK?

Yes.

Thank you.

So happy to be here.

Happy to share whatever insights that we've gathered implementing the cannabis equity program since 2017. I can just share kind of some big picture I guess lessons if you will in like one to two minutes and then I'm available for any questions or any details that come up.

So I guess some of the things I'll share should be seemingly obvious, but I think are kind of understated.

I had the kind of good fortune of kind of doing things the wrong way, if you will, and then kind of doing things in a better approach in terms of legalizing the cannabis industry in Oakland.

Just a quick background.

I've overseen the permitting of cannabis businesses in the city of Oakland since 2014. And then in 2017, I had the good fortune of collaborating with, I think, a former City of Seattle colleague of yours, Darlene Flynn, who was at the time a one-person Department of Race and Equity here.

And we co-authored what became the nation's first race and equity analysis, the Cannabis Industry and Cannabis Program.

And what was key is we actually passed the initial version, well, taking a step back to 2015, Everyone anticipated recreational cannabis being legal and legalized in 2016 with a proposition that was going to be on the ballot in a presidential election.

And we essentially looked to copy and paste what had been done in maybe Colorado and perhaps Washington of sort of legalizing the status quo.

but former council member Desley Brooks essentially asked, who is it that's gonna benefit from the legalization of cannabis?

And that set us on a whole nother trajection.

Actually our interim director of race and equity had a quote that I like to steal, which is organizations move in the direction of the questions they ask.

And I think by asking that question, that set us on a completely different direction We had some political will, we actually passed an initial version of our cannabis equity program in 2016, but there was no analysis behind it.

And so as soon as it was passed, there were efforts to kind of repeal it.

Our council was very divided.

One wanted to double down and one wanted to essentially allow for permanent to commence and at some point down the road, maybe do something to address the war on drugs.

So it culminated with the council directing Darlene Flynn and I to draft a race and equity analysis.

And it seems really simple, but actually having and identifying a goal up front was a game changer.

Once we got our city council members to collectively agree on what we offered as a goal, which was to promote business ownership and employment opportunities for those disproportionately impacted by the war on drugs, with our cannabis program.

And then we laid out some relevant data looking at, you know, demographics within the city of Oakland, police data, arrests for cannabis, poverty data, things like that.

And then we identified the main barriers towards achieving the goal that we identified, which, and I'm happy to share this analysis and other cities have done it.

They're not going to be major surprises, probably, you know, access to capital, access to real estate, technical assistance, things like that.

And then from there, we identified, you know, strategies to overcome and address that, those different barriers.

And the program sort of developed from there.

And then anyone who wanted to modify that had to clarify how what they would propose would achieve the goal that we all agreed upon.

Whereas in 2016, we had a lot of people jumping to solutions or being lobbied by different interests within the industry.

So once we identified that goal and had an analysis, that really drove our program.

It doesn't mean our program was perfect.

We're constantly monitoring through stakeholder engagement, like it sounds like you're doing.

We've had a cannabis commission for more than a decade in the city of Oakland.

So we have an opportunity to engage with stakeholders, make adjustments.

And then we were fortunate that after Oakland created a program, other cities in California created a program, and the state of California has made funding available.

And we've been fortunate enough to receive grants in the last couple of years, which has allowed us to not just do things like permitting priority and create a revolving loan program through cannabis tax revenue and provide technical assistance.

but provide grants, help a team of equity applicants purchase a property, and fund shared manufacturing facilities and workforce development programs, all of which we need to continue to monitor and improve.

So I guess in a nutshell, I would just encourage you all to do what it sounds like you're all doing.

Ask critical questions.

Try to have a clear goal up front.

And then also take advantage of some of the unique opportunities you have in the cannabis space from a government perspective.

Typically you have some sort of permitting authority, more so than you might in another context.

And you have a source of revenue, a new source of revenue.

Although in the case of Washington or California at this point, it's not new, but it is a source of revenue that's specific to this industry.

So I'm happy to share our equity analysis from 2017 recent staff reports and answer any follow-up questions.

And thank you for the opportunity to share some insights.

Well, thank you very much.

And I do definitely have some questions.

I'd love to know more about the Cannabis Equity Regulatory Commission, but I'm going to hold those questions because I asked my colleagues to do that.

So, colleagues, remember to please hold your questions and we'll come right back to conclude those.

Thank you very much, Mr. Minor.

Next, I believe that we are going to hear from Abby Borchers from the City and County of Denver.

And Abby, I understand, I believe that you have a presentation, perhaps that's...

Hi, Abby.

I'll let you go ahead and introduce yourself.

Thanks again for being here with us today.

And if you could share your title for the record and your name, that'd be great.

Thank you so much.

My name is Abby Borchers.

I'm a policy analyst with Denver's Department of Excise and Licenses, which is the department that issues marijuana business licenses for the city of Denver.

I'm going to go ahead and share my screen.

I just have a quick presentation to hopefully guide the discussion.

Excellent.

It looks like it's teeing up right here, and we do, for the viewing public, have these presentations from Denver and Sacramento also linked on today's agenda.

So first, I just want to quickly set the stage, because I know that this works differently in different states and different cities.

But the way that it works in Colorado is the state licensing authority issues marijuana business licenses, as well as individual employee and owner licenses.

And then they regulate matters of statewide concerns, so things like packaging, labeling, testing, production management, et cetera.

Denver's Department of Excise and Licenses issues the corresponding local marijuana business licenses.

We do not issue individual employee or owner licenses, but we do regulate the time, place and manner of marijuana businesses.

And then we regulate other matters of local concerns.

So things like public hearing requirements for certain marijuana business types and location requirements, how far they can be from schools and childcare facilities and things like that.

Just to give you a sense of how many marijuana business licenses we have here in Denver, we have about 943 active marijuana business licenses.

Keep in mind, we have both medical and retail marijuana licenses, and so the real number of locations is there on the right-hand column.

So looking at around 200 cultivation facilities, 200 stores, 100 manufacturing facilities, and then some other license types in smaller numbers like testing facilities, transporters, research and development facilities, and then we have a new marijuana hospitality license, which is a cannabis consumption lounge.

type of license.

So we have one of those licensed currently, and then three more of those are in the application stages and going through their hearings here shortly.

So I wanted to address where we've started with approaching equity in the marijuana industry and kind of where we are now.

So where we started was in 2019. we commissioned a study by a third party group, I think it was called Analytic Insight, and they put together this evaluation of the cannabis industry in Denver as a whole, looking at employment and ownership opportunities and the racial and ethnic makeup of owners and employees in the industry.

And what they found was That kind of confirmed what we already suspected and what we had already been told, but we wanted to have the data to back it up before we moved any further along and showed us that, you know.

proportional to the way that these groups are represented in Denver.

Hispanic and Latino groups are underrepresented in both ownership and employment in the industry.

Same with Black and African American individuals, Asian and Asian Indian individuals.

And so having armed with this data, we felt confident in moving forward with a process to come up with a social equity proposal for Denver's cannabis industry.

And I can share the full report once I'm done in the chat, because there's lots of other data in that report that was very useful.

But this is just sort of the main data, the highlight that I wanted to share.

So from, actually, I'll go back.

So from there, we took this information that we had and we put together a work group of diverse stakeholders from just different interest groups.

So we had industry representatives, public health experts, social equity advocates, youth prevention of marijuana use advocates, all serve on this marijuana licensing work group and the purpose of the work group was to inform a full overhaul of Denver's marijuana licensing code, but also the development of a social equity policy proposal within that overhaul.

And so we put together that group in 2020, met virtually, five times throughout 2020. And then of course, met with lots of different people just individually one on one to get feedback on these proposals.

And so with the input of that work group, we've developed a social equity policy proposal.

And city council passed that overhaul of the marijuana code as well as the social equity program in 2021. So who qualifies as a social equity applicant?

We actually decided to just adopt the state's definition of a social equity applicant for ease of the applicants not having to go through multiple eligibility processes and just to respect the work that was done at the state level to develop this proposal in the legislature.

So only Colorado residents can qualify.

It doesn't matter how long they've been a Colorado resident, but they do have to be one at the time of application.

And then they have to meet one of three criteria.

So the first criteria is that the applicant resided in an opportunity zone or a disproportionate impacted area for at least 15 years between 1980 and 2010. or the applicant or their immediate family member was arrested, convicted, or suffered a civil asset forfeiture due to a marijuana offense.

And the third criteria is that the applicant's household income did not exceed 50% of the state median income.

So they only have to meet one of those three criteria to qualify as a social equity applicant and the social equity applicant has to own at least 51% of the marijuana business license being granted a non social equity applicant business partner could own the other 49%.

And then in Denver.

I'll talk a little bit more about this on the next slide, but we decided to exclusively issue most of our licenses to social equity applicants for the next six years.

So something that we were concerned about, and that actually Sarah Woodson brought to our attention during the legislative process, was that somebody could qualify as a social equity applicant, obtain a marijuana license, and then turn around and sell it to a non-social equity applicant.

And a non-social equity applicant could pay someone to do that.

And so that would really undermine the intent of the program, which is to increase racial and ethnic representation in the industry and also just give opportunities to people who have previously not had those opportunities in this industry.

In Denver, any license granted to a social equity applicant has to continue to be owned 51% or more by a social equity applicant until July 1st of 2027, which is the end of the period in which we'll be exclusively issuing licenses to social equity applicants.

So they can sell the license to somebody else, but the buyer has to be 51% owned by social equity applicants.

So like I said, most of our licenses will be exclusively issued to social equity applicants until July 1 of 2027. That includes store licenses, transporter licenses, which can do business-to-business transport, as well as home delivery of marijuana, cultivation facilities, manufacturing facilities, and then the new hospitality business licenses.

So that includes the lounge model where people bring their own to consume on site, a sales model where you can sell small amounts of marijuana, sort of like a bar, and then mobile hospitality, which is the tour buses and shuttles that people can consume marijuana on.

Social equity applicants also have exclusive ability to do delivery on behalf of stores until July 1st of 2024. And then we're offering waived application fees and reduced licensing fees for our existing license types.

And then lower than normal application and license fees for those new license types, which are hospitality businesses and home delivery permits.

And finally, just wanted to talk about.

Again, this was in the 2019 study that that we did and it's linked to there on the slide.

But it just looked at what are the other barriers to ownership because licensing is only one piece of the puzzle.

The other pieces are, you know, what they found is access to startup capital.

And that's something that we're working on.

Just recently, our city council approved for 1% of marijuana tax revenue to be dedicated to a fund for small business investment.

And what's unique about that program is that marijuana businesses can actually access it.

So most of our city grant programs and loan programs can't be accessed by marijuana businesses because They are at least in part federally funded, but this fund will be specifically funded by marijuana tax revenue.

And so while any type of small business could access it, marijuana businesses could too.

And so that fund will be funded up to $50 million.

Um, other pieces are, um, complexity of regulations.

We've been working on some education and outreach around that, um, the cap on the number of available licenses.

Uh, so there used to be a cap on the number of storing cultivation licenses in Denver, and that resulted in, um, you know, high prices of licenses to be sold.

It cost a lot of money to get into the industry because you had to buy a license.

Um, so we removed that cap, um, What else?

Just all these different things like skills and knowledge required to run a business, difficulty obtaining a location.

We're working on putting together a technical assistance program through our Office of Economic Development to really provide some one-on-one support to social equity applicants and help them overcome those challenges and getting into the industry so really trying to take a multi pronged approach to what's a very complex and difficult problem.

And I think, you know, we're feeling optimistic about it.

I don't think anyone has found the magic solution to this issue, but we're seeing slow but steady progress in getting licenses issued to social equity applicants.

And it just, you know, it takes time to see those licenses get issued, but we're fortunate to not be tied up in lawsuits or anything like that.

So we're very happy with the progress that we're making, so.

Thank you again for having us here.

I'm very excited to hear from our other panelists.

Well, thank you very much, Abby.

And we're gonna continue on with the theme of Denver and stay with our friend, Sarah Woodson.

Thanks for being here, Sarah, CEO of The Color of Cannabis Denver.

And I have some questions from the previous presentation, so I'll look forward to adding to those with the presentation here from Sarah.

Welcome, Woodson.

Thank you.

Thank you all for having me and Abby.

That was perfect.

That was a wonderful setup.

So I kind of want to follow what you threw out you said reform redistribution and restoration.

And I think what Abby just did was talk about all the work that we did through reform and so I don't want to spend too much time there but I just want to recap because I've worked on city and state policy.

So the Color of Cannabis, the organization was founded in 2019 and we've spearheaded essentially all the social equity policy.

So I have had the honor and opportunity to work closely with Denver Excise and License along with the state.

In 2019, a group of gentlemen that I admire and respect, they created an accelerator program on a state level.

And essentially, what they wanted to do was say, existing industry, you have the means, you have the bandwidth, let's partner with folks.

and get them into the cannabis industry.

Their focus was more of small business versus people that have been negatively impacted by the war on drugs.

So I think that that was really the start of social equity policy.

During 2019 and 2020, I think social equity really started to become more so of something that was rising to the top when you think about concerns in cannabis and just equity in general.

And so we were able to run a state bill in 2020, which defined what it would mean to be a social equity applicant.

And Abby went over those three things.

Essentially, where have you lived?

Have you ever had a cannabis arrest or conviction?

And that could be you, your brother, your sister, your parents, or your legal guardian.

And then income.

I want to stop there and just say, if you think about those criteria, though, they are race neutral.

And as I go into that restoration piece, I'll circle back and touch on that.

So race neutral criteria is to avoid any kind of discrimination lawsuits.

And I don't want to go too big into the weeds.

And I would love to share this all with you because when we were implementing local policy in different jurisdictions, we had to essentially talk about why the policy was race neutral, because that was a concern.

So race neutral policy, we have these definitions.

Now we're implementing in Denver.

In 2021, we ran a bill to essentially get about $4 million in funding on a state level.

Now, that's the reform piece.

Also, when you think about criminal justice reform, there's people that are running expungement bills.

Give me one second.

I'm so sorry.

It's the life of Zoom.

No problem.

Appreciate all of the colleagues holding your questions till the end and we're going to have a great chance to hear from colleagues and then we're also going to hear from FAS.

We can also hear from FAS and then ask questions all together as another option as well.

All right, I am so sorry.

We filibustered.

You're good.

You're good.

Thank you.

Thank you.

OK, so now we move on to 2021 and we run this bill.

We get $4 million and I think that is all about the reform piece.

So now there's this redistribution, which I also like to call implementation, and I think that's what really matters.

Does all the work that you're doing on paper translate to helping people and communities that have been negatively impacted by the war on drugs?

And so what we found is in Colorado, we're doing a great job.

But as you all know, as policymakers, policy is incremental.

It takes time.

Um, you, you fix something, then you figure out that it doesn't work, then you go back and fix it.

And so for the social equity applicant, that's boots on the ground, and that's been waiting 10 years for this opportunity.

They don't want to hear about that.

They're like, this is not working.

Um, because one, you know, there are a lot of performative allies in the industry.

And I think when we talk about restoration, there has to be ways to hold people accountable.

We have a whole new license type, which is delivery.

Abby just showed you the numbers.

207 dispensaries in Denver.

You have 19 that have signed up to participate in delivery and we can infer specifically because they can't deliver their own product.

So you have 19 people that have went out and you know, paid thousands of dollars on licensing and they will be out of business if the dispensary will not allow them to participate.

Then we have the caps removed in Denver.

But the issue is for the last 10 years, there have been a lot of excuse me, the issue is for the last 10 years, there has been a clear landscape rollout of I'm so sorry, guys.

Once I was talking to somebody about child care and the urgency of having flexibility around child care, and my child care called to say that our daughter had thrown up.

And I was like, I got to end this presentation because I got to take this call and I have to go get her.

So I totally get it.

There's no worries here.

And Madam Clerk, I just want to double check as well as we have a quick pause here.

Council Member Edwards, get a chance to join us and feel free to drop in the chat if she gets dropped into the Zoom here, anybody from IT as well.

I don't see her in here yet.

Okay, no problem.

And a quick reminder of our next speakers.

We'll have Tamika Drew, the founder and CEO of Beko from Los Angeles.

And then we'll conclude with Larissa Wohl and Davina Smith from the city of Sacramento, who also have a PowerPoint presentation.

So you're welcome to take a quick peek at that.

And then we'll have the members from the Finance and Administrative Services Department.

Okay.

And I'll just take a quick moment as well with Sheriff's prerogative here.

I see Gerald Hankerson from the Mayor's Office of Labor Relations on the line here.

Gerald, the other day we were talking about, you know, how do we define equity?

What does social equity look like?

And I just think that this presentation already so far has been so illuminating on what equity means in this sector.

Did you have any thoughts about that?

Because I kept thinking about that question.

I got a bunch of notes, but some of my questions haven't been asked, but I got a bunch of notes for afterwards, though.

Good call.

That's, that's excellent.

Great, great, great.

We'll give it one more minute and then good morning back to you, Sarah.

I am so sorry, guys.

It's OK.

I was mentioning that I had to jump off of a presentation once because my child care fell in the middle of it, and the presentation was about child care, so don't worry.

I bought a new little German Shepherd puppy, and he's been outside, and he's just like running amok.

And the neighbor's like, hey, your dog.

So I'm so sorry.

Don't worry.

OK.

That was adorable.

All right.

Thank you, though.

I'm going to bring it.

I'm going to finish this real strong for you that I promise.

Okay.

So now you have this boots on the ground and things just aren't clicking.

People are not being able to find locations because for over 10 years, our market is saturated probably like yours.

So all of the available locations, they're not available.

So things aren't working.

And so where we are now is we gotta go back to that reform.

And I think it's a constant cycle with social equity.

And what I noticed around the country is once you have the first couple of things done and they don't work, then everybody's up in roars and they're like, it's not working, but it's small little changes.

So now in Denver and in the state, we need to go back, we need to tighten up our criteria.

to make sure that people that we were seeking to help actually get assistance, as opposed to what we see now, where you have people with 39 stores qualifying for social equity under the pretense of having an arrest.

Clearly, this program is not for you.

You have 39 stores.

And then we need to really work with our city council so that they can make some changes around zoning restrictions.

So when you guys are implementing your policies, one of the things that I would say is really think about the landscape, all the people that are already out there, and figure out, you know, how are new people going to fit into a saturated market?

And the other thing, just through different policy conversations that I've been a part of, people are really starting to realize that while race does not need to be the only criteria, some type of minority designation needs to be in there.

And of course, it's gonna take a lot of thinking and a lot of smart people to figure out how you avoid lawsuits, but there's no way that we can acknowledge that black and brown people were discriminated against and negatively impacted based on the war on drugs.

And then we create policy and we say, well, we can't use race at all.

So, you know, that's one of the things I think that is extremely important.

And then finally, like that restoration piece is the accountability.

If you guys do delivery and you choose to do delivery the way that we did, which I would say that it's not the best way, and we're constantly going to work on changing that, delivery people should be able to deliver their own product.

They should not be at the mercy of the store.

So if you implement delivery where they're delivering their own product, that's one thing.

If you implement it where they have to use a store, I think it's very important to hold stores accountable and also just the industry in general.

I understand that it's private sector, but all of these are public programs.

And so we have to be able to find a way to work together and help people and make sure that it doesn't only look good on paper, but that the actual implementation is strong.

So that's pretty much my take overall on it.

Thank you very much, Sarah.

And yes, strong finish.

I appreciate your presentation, and I'm sure there will be some questions.

Good morning, Tameka.

Thank you very much for joining us as well.

Tameka Drew is the founder and CEO of BICO Los Angeles.

And if I'm not saying BICO right, please let me know what that stands for.

And feel free to introduce yourself as you get into your presentation.

Thanks again, Sarah.

Thank you, thank you so much for having me today.

Can you hear me okay?

Okay, wonderful.

I will actually tell you what Biko means.

Biko means please in the Igbo language.

And I found out that I was Nigerian recently, so I wanted to celebrate that with my brand.

So first I would just like to really thank the members of the city council today and the Seattle community for allowing me to share my experiences as a cannabis licensee benefiting from the social equity licensing program here in Los Angeles, California.

A little bit about myself.

I'm currently a manufacturing license holder and a retail storefront licensee that I'm working to operationalize.

And I recently applied for a cultivation processing license as well.

I am a board member of CERA, which is the Cannabis Equity Retailers Association, and the Equity Trade Certification Leadership Coalition and Policy Committee, as well as the Social Equity Owners and Workers Association.

If you would just hold on one moment.

Okay, let's try that.

Can you still hear me?

Oh yeah, we can hear you well.

Okay, wonderful.

I was getting some feedback on my headset, so I'm going to try again here.

I am also the mother of four children that I was able to have after becoming a medical cannabis patient and being able to heal my body from suffering from Crohn's disease for several years.

And I really just plan today to give you a glimpse into my licensing journey as a business owner in Los Angeles.

So just a little bit of background on the LA process that is administered by the LA Department of Cannabis Regulations.

LA has gone through three licensing phases.

Phase one, which was previously for licensed medical dispensaries, some of which were micro businesses with a combination of operating, cultivation, manufacturing, distribution, and retail licenses.

They were kind of the first ones that were able to get up and running.

Next was round two, which was designed for medical operators who were social equity qualified and our qualifications really are very much in line with the Denver qualifications that were just covered.

And they had to be able to prove that they ran some kind of previously compliant business.

And I was able to obtain a non-volatile manufacturing license as a part of this phase two process.

And phase two did require proof of compliant real estate to be able to apply for that license.

Now phase three is the phase that we're currently in, and that was designed for social equity qualified individuals to obtain retail storefront licenses, and those were exclusively now set aside for social equity licensees.

Phase three also did require compliant real estate in order to apply, but after the application day came and went, it was really clear the process was marred with several issues.

There was evidence that certain applicants were able to access the application before the portal was open for others, which got in the way of the original kind of first come first awarded outcomes.

Further, we found that individuals who were submitting their applications from disproportionately impacted areas actually were affected by slower internet speeds.

And because of that, they were not able to be able to get in as fast as some other people, which also affected that first come first rewarded outcomes.

An audit of that process and a lawsuit that was brought by the Social Equity Owners and Workers Association led to a change in our LA ordinance that expanded the number of licensees through phase three round one from 100 retail licenses to 200 retail licenses.

And because of this change, I was able to be awarded a retail storefront license.

I was actually 234 or something like that on the list.

So I barely kind of skirted in.

But the problem with this entire process was that the whole process was halted for every single person that was a part of it as these changes were being made.

So that made many of these even original 100 licensees lose their partners and lose their compliant property.

So like most of the second hundred licensees, I actually lost my original partner and the real estate I had originally applied with.

And tight rules around where storefront retailers can be located makes it difficult to find compliant property even now.

And moratoriums on evictions due to COVID have made it even further difficult.

and several real estate owners know that their properties are needed for cannabis licenses which within these communities and they either refuse to lease to cannabis operators or they charge astronomical rents and deposits that make it really impossible to find investors or partners willing to help cover those costs before the business has become profitable.

Now, unfortunately, it's not just challenging for the phase three retail licensees.

It's also really challenging for phase two operators who are working to make their manufacturing, their cultivation, and their distribution licenses work within the city because they don't have enough local retailers to be able to do business with.

So that is actually pushing their original plans for profitability back and creating a lack of expected returns for their investors.

So because of this, as a phase two operator, I created my own cannabis brand, Beko.

But the only way that we can continue to survive as a social equity cannabis brand is to be able to have statewide sales and distribution.

So if I really just had to rely on my city alone to be able to survive, I couldn't within the industry because of the way that retail licensing has happened in the city.

One of the most powerful tools that I have found that we have in our communities are people who already know how to run these businesses and that they can connect to less experienced business owners to help them network and to help share their resources to really supercharge them.

I came into the industry as a grassroots organizer myself, and when I created the nonprofit accelerator, our academy with my partner Hillary you.

We wanted to be able to harness the power of community and the sharing of resources in order to give smaller less experienced social equity operators.

a chance to not only survive but also to thrive within this industry.

And I think that challenging businesses and major corporations to share their resources and support these small social equity businesses is really essential.

I'm wrapping up here, only a couple of small, more things to share here.

While considerations like grant money and the suspension of fees for social equity licensees in LA has been really important, access to real estate and helping secure that real estate, as well as taxes that don't cripple our businesses, legal compliance and operational support are just as critical, if not more critical, to ensure our ongoing success.

And then resource lists and service providers that are vetted or provide discounted services to social equity operators would also be helpful.

And actually a loan program in Los Angeles would have been extremely detrimental for us considering the difficulty licensees have had in getting their businesses off the ground and could have resulted in retail licensees defaulting on the loans and losing their licenses altogether.

Additionally, community reinvestment or restoration, as we have been talking about it on this call today, has not been considered in a real way in LA or California in general and continues to be ignored when it is actually the driving force behind standing up social equity licensing and businesses in general.

And the last thing I'll talk about is just one major problem licensees have been going through in the LA licensing process has been partners taking advantage of looming deadlines and creating situations where social equity qualified individuals are forced into partnerships in order to not lose their opportunities.

So potential partners don't mind if these social equity qualified individuals lose the opportunities for licenses because they feel that it may free up more general applicant retail licenses in the future.

So it's actually might be in their best interest to make it so that no social equity, you know, licensees want to take any deals with partners and those licenses kind of go back into the pot.

The Department of Cannabis Regulations has requested a series of modifications to the City Council through a motion.

One of which would allow licensees like me to relocate anywhere within the city that I can find compliant real estate rather than just the small community plan area I originally applied in.

But those changes probably will not come soon enough for qualified individuals because we have to get our state licenses in next month.

So it really does put quite a time crunch on what we're trying to do.

I have found the Department of Cannabis Regulations licensing application workshops to be highly effective in helping licensees learn about the process and also their resources for helping workers learn about how they can build their career and apply for jobs has also been incredibly helpful.

And an easy and fair process where applicants are supported at each step of the way is really essential for ongoing support.

And I just really thank you for your time today.

And I'm always happy to answer any questions or be of service in any way I can.

And you can always reach out to me afterwards at tamikadrew at gmail.com.

Thank you.

Thank you very much.

Thanks for sharing your story and the journey and also some good lessons learned.

I think that there will be some questions for you as well and we will get to the last section here.

Very excited to have with us the city of Sacramento and then I think we can take some questions and we'll go to our Finance and Administrative Services Department to wrap us up so that we can ask questions of them as well.

Larissa Wohl and Davina Smith from the City of Sacramento are here with us.

Welcome to you both.

Thank you so much for being here.

And I know that there was a scheduled conflict for Council Member Edwards from Boston, but if the Council Member is able to join us, we will circle back to her as well.

Larissa and Davina, thank you, and please go ahead and introduce yourself.

And again, they are teeing up the PowerPoint presentation that is linked on today's agenda.

Thank you very much.

We're very happy to be here and we appreciate the invitation.

I think that, you know, it's good for us to kind of get in this sort of environment to learn from other people.

We found that to be very helpful.

And so we appreciate the opportunity that you've afforded here for many of us to come together and discuss this.

My name is Davina Smith and I am the cannabis manager for the city of Sacramento.

My background is as an attorney advising counties in Sacramento and California on cannabis code enforcement and land use.

And I joined the city of Sacramento in my current capacity right before the pandemic in 2020. So it's been a very interesting last two years.

And my colleague, Larissa Wall, is with me.

Larissa, do you want to go and introduce yourself?

Sure.

I'm Larissa Wall.

I'm an administrative analyst with the Office of Cannabis Management, and I'm the primary liaison to the four social equity programs.

Thank you.

So we're going to go ahead and move forward with our PowerPoint.

We're each going to be sharing on some of the duties here.

So you'll get to hear from both of us.

So as far as where the money comes from, we do have a city tax that's 4% on all cannabis businesses, gross receipts.

We don't differentiate between businesses at this time.

And that revenue is not earmarked for any particular purpose.

It goes into our general fund.

This has been in place for, gosh, maybe three years now.

And so we're looking at whether this is still useful for us.

One of the things that we know in cannabis is that, you know, we're always pivoting, we're looking, things change quickly and often, so you need to be prepared for that.

As far as permit fees, we do collect those from non-equity businesses.

Equity businesses, we do not charge business operating permit fees.

And with the permit fees that we take in, we're able to fund the Office of Cannabis Management, as well as our partners who are doing work on those permits in planning, building, police department, code enforcement, things like that.

We do collect those fees when a business operating permit is submitted, not when it's issued.

I think it's important to know that our equity program, the core program, does not currently have a permanent funding source.

We had a two-year funding source.

And then when we went back for authorization, unfortunately, it was in the midst of the pandemic.

And so all funding was pretty much frozen at that point.

So that's something we're working on in the next six months is getting that permanent long-term funding source.

Next slide, please.

So our equity program, the core program, first kind of came around in 2017. At that point, the city council directed staff to start working on this.

Our equity study is based on police arrest data in the city of Sacramento and also looking at areas in the city of Sacramento where these arrests occurred.

So both location and individuals.

And so out of that information between census data, arrest data, And then we took that raw data, we worked with community members, you know, to really kind of, you know, and I think what community really brought to the table was the idea that it's not just the person who's arrested, for example, for the cannabis crime that's impacted, it's the entire family, it's the entire community, right, as children maybe have to go to other family members to be raised, or, you know, there's the lack of a father generally, sometimes a mother, an uncle, an aunt, you know, grandparents, And then, you know, just the impact that people living in this community see as, you know, their schoolmates are frisked on the way to school, they're frisked on the way to school.

You know, people disappear because they're in jail or juvie.

And so, you know, with all these community impacts, we realized that we couldn't just concentrate on an individual, right?

So we widened our criteria to include family members of those who had been arrested or who had lived in these impacted areas, which I think helps create a program that really does look at the full impact of the war on drugs.

In 2018, we did adopt our equity resolution for the program, and we've been using that ever since.

Participants in our program, they do receive cannabis business development resources, small business training and education.

We do offer some financial and technical assistance, and we try to do some mentoring and support services.

we are in an interesting point as we move forward.

That's for sure.

As far as our numbers, we have over 300 people who have become eligible for core membership.

And, you know, one of our metrics that we're always looking at is we have over 300 people eligible, but we only have 24 operating cannabis equity businesses.

Unlike some of our colleagues, we don't allow people to operate prior to getting a full build out, full sign off by fire, full sign off by by PD.

You know, all of these things have to be in place.

Those health safety things have to be addressed before we will allow a business to operate in Sacramento.

So for a lot of our applicants, it is a tough road.

So one of the things that we're really been working on is looking at those financial assistance that can really help people get through sort of the desert of permitting and then emerge on the other side.

So for our numbers here, just so people kind of understand our shorthand, when we say for cultivation, that's six permits have been issued to core members out of 93 non-equity permits that have issued, and we have four pending equity applications.

So that's what our little shorthand means.

So as you can see, one of the things that Sacramento did, and I think honestly, if we were going to go back in time, we would probably change this metric.

We kind of let it be open.

We said, if you want to come in and operate a cannabis business here, as long as you go through our permitting process and you get your conditional use permit, you know, so that your environmental impacts are dealt with and you get your building permits and you get your business operating permit, you can operate here.

And so we didn't hold any permits apart for our equity members.

And we just sort of let the let it move forward.

So I think looking back, that's definitely something that we would probably do differently, because this is a number, you know, I will say in the two years I've been here, the number of business operating permits that we've issued has has gone up significantly.

But it's still it's a it's a road.

And we acknowledge that.

All right, can we go on to the next slide, please?

And I think this is Larissa.

Thank you, Davina.

So our current core program benefits and resources, we wanted just to give you kind of an oversight and an overview of some of the things that are offered to social equity members once they become verified.

So for grant funding, all of our grant funding at this moment comes from state funding.

So every year they have an equity grant application that we applied for.

So in 2020, we had $1.2 million in state funding for fiscal year 19 that we dispersed as $25,000 reimbursement grants for permit application.

So that was before I came on board, and I believe they were finishing that up.

before moving on to the next year of funding when I came on board.

And this year, for the FY21 funding, we received $1.6 million.

And this was really, of course, a stakeholder-driven process.

I actually came on in July of last year.

At the beginning of this, we developed a series of, we heard from the stakeholder community and some of the stakeholder organizations that this is that they wanted to be involved in the process.

So we did a series of we meet monthly with our core stakeholders, we did a series of surveys to really try to hone in on what they were looking for, understanding that we weren't going to appease everybody, we tried to do it sort of democratically.

And at the end of the day, what the community decided on was a first come first serve grant process, Grants up to 125,000 dollars for those only with least or own locations.

Which at the end of the day, we double check with folks because we knew that was a lot of money.

We also explained that that would only really amount to.

a small number of recipients.

But at the end of the day, that is what most of the folks wanted.

And we took the feedback after the process.

It was a little bit of a struggle, to be honest.

A lot of folks had issues with the application process.

We tried to be as transparent as possible.

But again, I think there is, especially with first come, first serve, there are going to be some issues there.

So we're taking the things that we learned from that process and developing our program going forward for this next grant year.

So for this fiscal year for 2022, we received $4.35 million in state funding, which is significantly more.

So we're really looking at a combination of small and large grants and really trying to maximize that impact across the board.

We're also looking at setting aside a significant amount of that for a competitive process.

We do know that there are some potential business owners who are looking to build out larger projects that might help support what our core stakeholders are calling the ecosystem.

So building larger campuses, potentially shared use facilities, things like that, that would have a benefit beyond just them as business owners.

So we are currently developing that project and that grant program and hoping to launch that in the coming months.

We also have our core capital loan program, which in 2021, we received $3.7 million in state grant funding, which allowed us to establish the zero interest loan program.

And initially, we had been dispersing $25,000 and $50,000 grants, and it depended on whether folks had a location or not.

We wanted to make sure that even if people hadn't secured a location, they could use loan funding to help them do that.

As they went to business owners, they could show them that they had funding to be able to put a down payment on this location.

And the goal was that once all of those funds were dispersed, that it would move into a revolving loan fund, which it now has.

We've now dispersed all of that funding.

And I know there were some other panelists had mentioned some of the issues with with loan funds, which I think are very real.

We initially, I believe, thought that there would be a delayed payment plan and there isn't.

We know for some people that loans are better than for others, but we know that it has helped a lot of businesses in opening and maintaining their business.

We also offer educational opportunities and direct technical support through our third party facilitators.

So for the first two years of the core social equity program, we contracted with two local organizations.

We released an RFP and received these two bids from the Sacramento Asian Pacific Chamber of Commerce and the Greater Sacramento Urban League, which were at the time operating two different programs.

So those facilitators provided and Sacramento Asian continues to provide the verification of eligibility for the core program.

So the baseline eligibility Some direct technical assistance prior to COVID, they did have in-person classes, but all of those have transitioned to online.

Like I said, workshops and classes, one-on-one support and mentorship, and then access to industry professionals for legal support and other things.

Not always free resources, but potentially contracted at a lower rate.

And we've heard from many core members that their needs are not being met by this current current offering.

So I'm going to talk a little bit about actually what's next and some things that we're looking to change.

So first, in things that we're currently working on, we have a core media and community outreach campaign, which we actually just signed that contract with a local firm, we're very excited to be moving forward with them.

And the goal for this is really to highlight our core program in a lot of different ways.

So from equipping consumers with the knowledge they need to make informed decisions when they go to retailers.

So if they're starting, you know, to ask for local equity brands and those retailers don't have it, they might choose to make different decisions.

You know, just like there are potentially stickers in windows or ways to identify Black-owned or women-owned businesses.

That's kind of what we're looking to do.

And also just to raise the awareness in the greater Sacramento community of the CORE program, as well as highlighting the stories and sharing the stories widely of businesses and owners, because we know that storytelling is very impactful and can make a major difference in the industry.

We are currently working on a new technical assistance and education RFP, again, recognizing and hearing the feedback from core members that what they're currently being offered is not enough to support them in opening a business.

So we are currently developing that scope.

And you can see some of the services that we're looking to include.

So we are looking at different options beyond what we had already established.

And back last year, we launched a cannabis industry wide study with the firm EPS, Economic and Planning Services, who I know has done a lot of work for the city before.

So this was requested by the city council to revisit the impact of cannabis, the cannabis industry citywide.

So this is not just about social equity.

They were interested in land use and regulation, ownership, taxes, economic and fiscal impact.

There are a few policies that are expiring soon that they wanted to have hard data to be able to inform policy decisions.

So that is, we're hoping, will be publicly made available next week.

We've been waiting for it for a little while.

So when that is publicly released, there will be a series of workshops in our law and legislation committee, hopefully informing policy to bring to city council.

But, and I would add for the next item, we knew going into this that the industry-wide study was really just going to be an overview and go into a little bit of a deeper dive in some areas, but not others.

So we knew at the outset that there would be areas that we would want to do a deeper dive in.

cannabis equity is one of those areas.

So we recently launched an RFP and are currently accepting bids for this follow-on study to really dive deeper into the cannabis equity in Sacramento.

Sounds similar potentially to some of the things that Denver had learned already.

I think we're really looking at better understanding One, looking back at the first couple of years of the equity program, learning good takeaways from that, but really understanding going forward how we can mitigate additional barriers, how we can give people better resources.

And we really want to make sure that it's informing public policy in addition to the industry-wide study, because we know some of those things that were listed in the scope there are impacted by social equity and racial equity.

So we're excited for that.

I know it's going to be a large task for whoever takes it on, but I think it's going to give us some really important information as we move forward.

And Larissa, I might ask you to conclude with this last slide on the what's next, and then we can maybe integrate some of the challenges into the questions so we can get to some questions if that's OK.

Yeah, of course.

And just the last thing I would mention is we're working on workforce development.

We really do understand that supporting the cannabis industry is from all sides, both supporting business owners and getting their businesses open, but also making sure that we are taking advantage of the opportunities of all of the jobs that are being created, which in Sacramento are good paying.

They're good paying jobs and offer a lot of people with different skill set and ability to participate.

Thank you for the time.

We appreciate it.

Well, thank you both very much.

And I think that actually tees up some of the questions that I did have for the panelists here today.

But first, can you all please join me in thanking the esteemed panelists for being here with us today.

And I really want to thank Aretha Basu, who is in my office, who worked to do the outreach to all of the different jurisdictions and representatives here today.

So thank you, Aretha, for joining.

She is in the Zoom with us here today.

I just want to say thank you.

I do see some colleagues on screen, so happy to open it up to hear some questions first.

Vice Chair Herbold, and by way of introduction, Vice Chair Herbold, longtime champion on equity issues, especially in trying to rectify some of the harms of the war on drugs, but also Chair of Public Safety and Human Services.

Please go ahead, Council Member.

Thank you.

I just want to really express my appreciation for all the really incredible, groundbreaking work folks are doing in other jurisdictions across the country.

And thank you for taking time out from all of your busy days to share your lessons learned with us here in Seattle.

I also want to just share a comment from a high road person of color, a cannabis business that I've somebody watching this presentation right now who's really excited about all this work, who wanted to thank everybody for their continued support through these social changes, nationally, globally, and locally, and really wants to remind us all how important, as we heard from Lynn Domingo in public comment today, how important the social normalization that we've seen in cannabis is so important, but we really must have federal reform as well.

And just a reminder that hopefully we're all looking at that federal reform as well so that these businesses can do business like any other accepted business in our community.

And in doing so, have also a safer workplace.

And also by being able to do business that way, I think it also reduces some barriers that folks have entering into this industry, and just their big support for the equity efforts that we're all working on here.

My question is kind of a sequencing question.

In 2020 and 2021, I, with the support of the council, worked with the Office of Intergovernmental Relations to add support for some legislation on the state level to address the lack of equity in cannabis licenses.

And there was a law passed in 2020 and another passed in 2021 that expanded the eligibility for licenses and also created a state grant program.

It's only $1.1 million.

We recognize that it's not sufficient.

That's the number of funds for the entire state per year.

But just focusing on the issue of social equity licenses themselves, we know that Seattle will receive two social equity licenses from the state and King County Equity now in the Black Excellence in Cannabis Project have demanded that the city ask for 30 social equity licenses.

Currently, there are only 38 available statewide.

And FAS has reported that even to use the two equity licenses that we have available to us, our zoning is a barrier.

And so stakeholders have asked us to expand more of Seattle's land use to allow for social equity retail licenses.

So I'm really interested to learn from the other jurisdictions whether or not their zoning and land use restrictions make it difficult to use their social equity licenses.

And if so, Do you recommend, how do you recommend sequencing the necessary change?

Do you work on increasing the number of licenses first and then expand the zoning?

Or do you recommend that we do it the other way around, change the zoning, and then advocate for more social equity licenses?

Thank you.

Great question.

I see two hands in response so far.

Please go ahead, Greg.

And then Davina is next.

Sure.

And I just want to say thank you to all the panelists.

Some folks like Davina unfortunately have to deal with me and we talk, but others it was very interesting to hear from other jurisdictions.

I'll just share how we've approached it here.

So kind of one assumption in the question, it sounds like there's a limit on the number of licenses.

So that might be defined by state law or local law, or you may have flexibility.

So we have flexibility in California.

And so at the local level, in Oakland, we've taken the approach of having no numeric limit on the number of licenses other than for brick-and-mortar retail.

So I kind of see the pros and cons of both approaches.

So not having a limit on the number allows for fluid process, people can apply it anytime, if there's some sort of defect in their application, they can cure it, no big deal.

It also kind of lowers barriers and opens the opportunities for everyone, but it's also kind of, some people would say it's like a race to the bottom, because you could have competition from the whole world.

And then on the retail side, where we have a limit, we see the pros and cons of that approach, which is you have to have a set process and application window.

And then if somebody doesn't do well or misses a deadline, you can't cure it.

You can't redo the race.

However, having a limit on the number can create more of a demand.

And so people with capital might be more incentivized to partner with an equity business for the purpose of opening a more limited and more exclusive business type.

And then with respect to real estate, the approach we've taken is we've allowed, in the retail process, we select the applicant.

And so we've had a process where equity applicants are selected through a lottery.

for half, and then the other half is competitive and it favors those that promote equity.

And then they have a window of time to find real estate.

So they don't have to secure real estate, pay rent on the off chance that they're selected, and then for months and months wait for that all to play out.

And it sounds like jurisdictions, obviously you need a place to do business at some point.

But I think requiring real estate up front in a competitive process can lead to some really unfortunate outcomes, and it creates a big barrier.

So I don't know if that was helpful at all, but I just wanted to kind of share some of how we've approached just the limit or not having a limit on licenses and real estate.

Very helpful.

I see Davina and then Sarah in response to the question.

Thank you.

In Sacramento, we have what I call fear-based zoning that came about, I think, back in 2018. And it really was the idea that cannabis businesses would be very impactful on the surrounding community, drag down real estate values, things like that.

And so most of our cannabis businesses were zoned into manufacturing and industrial areas with a lot of sensitive uses that they have to be a certain distance from.

And what we found, actually, is that, over the last several years, is that those impacts did not necessarily occur.

You know, that these businesses, because they're so highly regulated, they're often the cleanest one on the block, right?

They're the ones that pick up the trash.

They sweep their thing.

They're trying to be the good neighbors.

And we've actually found that real estate values in the area have gone up because in the areas surrounding these cannabis businesses, which is pretty interesting.

I think that having available space for businesses to go, especially equity businesses, is important.

Because the other thing is what we found in 2018 was that there was a green rush, right?

So all of a sudden you had the price per square foot for commercial real estate in areas where cannabis could go, go up pretty high.

And so that impacted not only the ability of equity businesses to afford to go there and to be able to go there, but also non-cannabis businesses who may have wanted that warehouse space or that industrial space.

All of a sudden, a lot of people were priced out and you have landlords who are actually willing to keep a space vacant in hopes of getting that big fish, someone who could afford to pay $3 to $7 more per square foot because it is a place where a cannabis business could go.

So I think by having a variety of places where people can actually go in I think that would prevent the equity operator from being squeezed like that because, okay, if this person's going to be, if this landlord is going to be charging a crazy amount, well, they'll go over here or over there.

They have those options.

And I think that's really important for them to have.

A thumbs up.

Thank you, Davina.

And Sarah, please go ahead.

Yes, and don't worry, I won't stop this time.

Thank you guys again for your patience with that.

But yes, Councilwoman, zoning is extremely critical and I believe that they can be done at the same time because the process does take a while.

In Denver, again, we have this really great program and people are being stopped because not only do we have sensitive use, which I do think that there is good public policy when it comes to that.

You don't want to have a lot of over concentration and a lot of overcrowding, but we essentially already have that.

And so like the thousand foot buffer from store to store, neighborhoods of undue concentration, which is essentially all the predominant black and brown neighborhoods, you no longer can open stores and cultivations in there.

And, you know, so those type of things are really stopping our social equity people from being able to progress.

And it's extremely discouraging.

And so when you guys implement your policy, the one thing that I will say is that the old rules cannot apply.

I do like what we've done in Denver, where we have this exclusivity period.

So we're giving it a time to see how it cultivates and grows.

And then, you know, it's sunsets and it's done.

But the zoning is extremely important.

And I would absolutely recommend working on it at the same time, because if not, the social equity person can now apply, but now there's no open stores.

And so now they're losing all the momentum that they've been gaining and trying to build up for this period of time coming into the application process.

So again, yes, zoning is important, and I would recommend doing it simultaneously with the licenses.

Thank you so much.

Very helpful, thank you all.

One of the questions that I have as finance chair is related to the social equity funds.

Some of your jurisdictions have mentioned a 1% tax, some have mentioned a 4% tax.

I thought that I heard, might've been in Denver, I thought I heard $50 million a year for an equity fund, but I could have heard that wrong, so I wanna make sure I understand more.

If there is a fund that is being created in your jurisdictions, could you remind us what the total amount is that comes in each year?

Because you mentioned a multi-prong approach, which is what we've been hearing is needed, both for making sure that they're citing and support, standing up new entrepreneurs, supporting workers in the industry, as well as the creation of what did we call it in Oakland, the Cannabis Equity Commission and some of these other commissions and boards.

So I'm wondering if you could, if you know the numbers offhand, if the jurisdictions might be able to comment on, if you have an equity fund, how much is it that comes in each year?

And then looking forward to hearing more about, you know, how maybe that's in addition to your state funds.

And I see Abby's hand up and Sarah, Sarah, I just, I see your hand up first.

I want to make sure it was your hand up as a carryover.

carry over.

Okay, no problem.

Please go ahead, Abby.

Thanks for popping in.

Sure.

Thanks for the question.

So the in 2021, Denver City Council decided to allocate 1% of existing marijuana tax revenue to a small business investment fund.

So it's not an additional tax on marijuana.

It's just reallocating 1% of our current revenue.

And then that fund can be funded up to $50 million, but the projected for 2022 is I think I'd have to double check and I can let you know what the exact number is, but I think it's around $4 million for 2022. So that fund can be accessed by all sorts of different small businesses, but also by cannabis businesses.

And then $500,000 of marijuana tax revenue is being used to fund our technical assistance program that we're in the process of reviewing proposals for as we speak.

Thank you so very much.

Anybody else comments on an equity fund that their jurisdiction might be pulling from.

Please go ahead Sarah.

And then in Colorado, on a state level, we have a $4 million fund.

It's the Cannabis Business Office.

And that came from Marijuana Tax Cash Fund.

Right now, it's just a pilot program.

So if it's successful, we'll be able to go back to our Joint Budget Committee and ask for additional funds.

And basically, there's a $25,000 grant and a $50,000 grant.

There's different qualifications.

And you have to be actively seeking a social equity license.

So it is a competitive process.

There's a scoring rubric.

And I can share that with you guys offline if you're interested in seeing that.

But those are the two categories that it falls into.

And we're probably anticipating about 100 people applying.

But because it's competitive, I don't know how many of those people will actually be awarded funds.

Okay, wonderful.

Yes, I'd love that information.

Appreciate it.

And for any of the panelists as well, if you have any additional information to send us, please feel free to.

I think I'll ask one more concluding comment, and then we'll get to the Finance and Administrative Services presentation, which will go into a little bit more of the analysis and conversations that have been happening here locally in Seattle.

And I want to make sure that we hear from Gerald.

Gerald, did you have a question that you'd like to tee up for the panelists?

Oh, just on mute.

So sorry, Gerald.

I do that all the time.

Thank you, Council Member Mosqueda.

First of all, let me just say to all of you, you've been very informative for me in helping to understand this as far as how you're doing in the jurisdictions.

But I got a couple of questions, and one particularly when we're talking about social equity.

Now, as a person that only heard of social equity a few years ago, I looked it up in a research and it said it refers to justice with fairness of social equity policy, and it includes race, gender, sex, and sexuality.

That's what the social gender definition is, that's according to Wikipedia.

But some in the community would say all of these were not targeted by the war on drugs.

So my question is, how do you target communities most impacted by the war on drugs when the social equity definition includes others who were not targeted by war on drugs?

Great, I see Greg with his hand up.

Please go ahead, Greg.

Yeah, to me, it all depends, again, on your goal.

If you don't have a clear, if you have a clear goal, then you can design a program that all aligns and builds towards that.

And you can, in each jurisdiction, you have an opportunity to define what your goal is.

But I think it sounds like from some of the speakers, I mean, there are, yeah, every jurisdiction's kind of chosen different approaches, but I think That's what I would encourage.

First and foremost, it sounds really obvious and simple.

It's not actually necessarily simple, but I just and it's not easy to do.

But I think defining a goal is critical to ensure that you actually have the outcomes that you're seeking.

So that's kind of what comes to my mind.

And I see Sarah and Davina.

So Gerald, for us, it was about who's been negatively impacted by the war on drugs.

And there was a lot of contention around it, because there were people that wanted cannabis moms in the definition.

There were people that wanted veterans in the definition.

There were all these different things.

But what we really started saying, OK, what does it mean to be negatively impacted by the war on drugs?

And so then we said, well, how long did the war on drugs last?

And of course, people were like, it's still going on right now.

We're like, OK, can we come up with one timeline?

So we came up with that 1980 to 2010. And then we said, OK, well, what would be the variables that would determine if a community was negatively impacted?

So high marijuana arrest, you know, high crime, low high school rates for completion.

We also looked at public housing uh...

school lunches basically places where people are living in poverty essentially and of course where black and brown neighborhoods consist of so that was like the first thing and everyone was in agreement on that uh...

the one that's really hard is that income because people can slide through income, make their income what they want it to be and not be negatively impacted.

So we really try to look at what are the actual outcomes that people experience when they've been negatively impacted.

And then, of course, to me, the most important is, have you had a cannabis conviction or felony and not necessarily arrest?

Because in our program, we've allowed arrests through and tons of people have been arrested for marijuana.

It doesn't mean you've been negatively impacted.

So the things that really make the most impact that are long lasting is what we looked at.

Thank you.

Great.

And then to wrap us up, Davina, I see your hand up.

That's a big ask, but I'll do it again.

I think one of the things that's interesting, and you've probably heard a lot of that here, is that it is, I think it can be a very localized determination Because I think there are communities, I worked for years in Humboldt County, which is overwhelmingly white, but very much a cannabis producing area.

And their decision on what they decided equity should be included people who are sex trafficked as part of the cannabis industry, right?

People who, I mean, when you're on farms that are hours away on dirt roads from, you know, any paved road, you know, it's pretty hard to escape in that situation.

Domestic violence as a result of the cannabis industry, as well as those who were legacy farmers, right, who operated under the threat of arrest for a number of years.

And so I see that as being a very different criteria than what we did in Sacramento, and it sounds like what Denver and Oakland did.

But I think it just kind of determined decides you have to decide what makes sense for your community.

How were people impacted?

What were they?

I mean, here it was, we really saw a ripple effect, right?

The individual, the family, sort of the greater family community, right?

With the aunties and the uncles.

And then, and then just the general community of like people missing, right?

You have, you have the disappeared almost, right?

Who ended up in prison for cannabis for years and years, potentially.

So that was our determination here in Sacramento.

But I think it can be a really localized determination.

And that's one of the kind of neat things about it.

You get to really make it most impactful for your jurisdiction.

Well, thank you.

And I think that's actually a really good segue.

We can have a few more questions after FAS, but our finance and administrative services department has been looking into this question through the equity lens from the race and social justice initiative task force that's within the department.

So I think I will transition over there.

As we transition, please join me in giving another round of applause to our panelists here today.

And we'll spend the next 20 to 30 minutes, if folks have some flexibility with their time, hearing from Finance and Administrative Services who are on the line.

I see applauses, yay, thank you.

So thanks to the panelists.

Madam Clerk, could you please read item number two into the record and we will conclude with FAS.

Agenda item number two, Department of Finance and Administrative Services, cannabis equity for briefing and discussion.

Well, thank you, members from the Finance and Administrative Services team.

I see with us Lachin Cherina.

Lachin Chernia.

Thank you.

Lachin Chernia, I appreciate you being here.

And Rick Demmer from Department of Finance and Administrative Services, thanks for being here.

I hope that you found that presentation informative.

Yes, I'll turn it right over to you so we can get straight into it.

Really appreciate the continuation from our December meeting and for your willingness to be here.

Great, thank you so much.

I'm gonna share my screen here.

There we go, okay.

So hello everyone, Council Chairperson Mosqueda and members of the committee.

My name is Laken Chernia, and I'm the new Strategic Advisor for Cannabis Licensing in the Consumer Protection Division.

And I'll be continuing the cannabis equity work for CPD moving forward.

And I'm also here with my colleague, Rick Dimmer, Rick.

Hi, good morning everyone.

Thank you for this opportunity to speak to you all.

My name is Rick Dimmer, I'm the Field Enforcement Representative for labor equity and also the culture around this.

And we're here today to share a brief history of FAS's cannabis equity work and our findings of the Cannabis Racial Equity Toolkit, and also to provide an overview of our next steps to continue moving this work forward.

And so I'm going to turn it over to Rick to just give us some brief background.

Rick?

Oh, did we lose you?

OK, there you are.

Good morning, everyone.

So basically, let's start off with how we got here.

And the city and the state passed a cannabis license ordinance without considering social equity in the licensing.

And as a result, Black business owners and community were and continue to be harmed.

And before moving forward, I would just like to say thank you to the community and the owners for sharing their history, their concerns, and also their trauma.

The city recognized this and took action by creating RET, which is a racial equity toolkit, to first take accountability and also look into the blind spots on how we can right these wrongs.

Not just for the owners, I mean, that's how we started out, but once listening to community, as I believe Davina had mentioned, We're talking the whole family being impacted.

We're talking about a whole community being impacted.

And so we had to shift that RET to adhere to the words of community.

And I'll send it back over to Lakin to kick us off for his presentation.

Thank you, Rick.

So as many of you likely know, in 2012, Washington and Colorado were the first states to legalize recreational cannabis.

Due to the complex state licensing process and the lack of outreach to community, only those with wealth or capital were able to obtain licenses.

Importantly, none of Seattle's existing Black-owned medical operators were able to obtain licenses to continue operating in Seattle after recreational cannabis was legalized.

In 2020, lawmakers developed a state social equity and cannabis licensing program and further expanded the scope of that program in 2021. State program is scheduled to begin accepting applications for social equity licenses this year in 2022. And as I believe you're aware, there was legislation at the state level this year that would have greatly expanded the number of retail and producer processor licenses available across the state to social equity applicants.

However, that legislation has died.

And so as Council Member Herbold just mentioned, that means that currently the initial statewide license issue will be for the 38 unused existing licenses, 22 of which are actually designated for jurisdictions with bans, license caps, or moratoriums.

And per that existing statewide framework, Seattle will only receive two social equity licenses.

So the city and state have also acted to undo harm in other ways.

For example, criminal history can impact cannabis business ownership.

And so in 2018, the city attorney's office and the mayor's office filed a motion with the Seattle Municipal Court to vacate convictions and dismiss charges for misdemeanor cannabis possession.

In 2019, the state also allowed people to submit a pardon request to remove records with one cannabis conviction and to vacate all their cannabis misdemeanors if they were 21 or older when they were charged.

So in 2018, FAS began a racial equity toolkit, or RET, on the cannabis industry.

And in addition to FAS, the RET team included the Office of Economic Development, the Seattle Department of Construction and Inspections, and the Office for Civil Rights.

When this RET started, it was focused exclusively on business licensing.

However, based on community feedback, the RET outcomes were revised to building a new systemic structure and centering black communities through access to licenses and capital, business education and mentorship, affordable housing, healthcare, education and re-entry support, business plan support and flexibility in the process, reinvesting proceeds into the black community and rebuilding generational wealth.

The team engaged nearly two dozen stakeholder engagements reaching over 200 community members and city departments.

And the RET team also hosted a community forum in February of 2020. The themes that the city heard from community were that the communities most impacted by prior marijuana laws should be the ones to receive assistance from equity efforts.

That accurate data collection should be based on where the impacted communities currently reside.

Financial support in the form of access to banking, startup money, and business training.

Include the medical marijuana patient community since they're often not acknowledged or counted in the data.

And that the racial equity program needs to be viable given laws against preference based on race.

And so now I'm going to hand it back to Rick, who will share additional feedback from stakeholders, our proposed timeline, and the key policy changes and next steps.

Rick.

Thank you, Leigh.

And let me know if you guys are getting feedback from this presentation.

So stakeholders and additional recommendations go, such as dedicating $1 million for the next 10 years to fund the Seattle Economic Recovery Program.

I filed a motion with King County Superior Court to vacate convictions and dismiss charges for felony conviction possessions.

Also, this work is to address the disparity of the black community receiving felonies for the same crime that their white counterparts receive misdemeanors for.

This is also to double down on the Mayor and Pete Holmes' previous work where they vacated misdemeanors.

Looking at some proposed timelines, these are not cement, these are just timelines here.

We would like to kick off 2022 with requesting to dedicate $1 million to the Seattle Cannabis Equity Program.

Looking at 2023 and 2024 to get into the implementation, launching in the support of the Seattle Cannabis Equity Program through the Office of Economic Development.

And that's also where we're going to look to seek additional cannabis retail licenses for Seattle in 2023 and then 2024, partnering with other city departments to implement a grant program for those most impacted by the war on drugs in Seattle.

Also, when we did the stakeholder engagement with city departments, I believe we had 22 plus departments or something that reached out to participate because the city is so big, we didn't want to We didn't want to take all the resources from this fund when there's other city departments who are doing some of the city similar work that folks may need a resource from.

So Office of Department of Neighborhoods who might have funding for housing where folks who are convicted would need housing or something like that.

So we wanted to be very, very mindful.

Some key policy changes.

Based on the extensive work and community engagement of the Cannabis RIT, FAS leadership team approved the following recommendations from community.

Building an alliance with the incoming mayor to dedicate $1 million in physical resources to fund equity in cannabis social equity program within the cannabis industry.

Some of those examples include equity in cannabis licensing, including lowering fees for social equity applicants, Reducing buffering, which some of you, some of the folks on the panel talked about earlier.

Disbursement requirements, and we've been working with SDCI to figure that out as well.

Providing grants or loans and technical assistance, and that's going to be through the Office of Economic Development.

Workforce investment, mentorship, and business planning.

A lot of folks talked about the need for that.

That's going to be through the Office of Economic Development as well.

And then lastly, investing, investment in communities most impacted.

through grants for community projects, business development and support also will be led by Office of Economic Development.

So we just want to say thank you guys all for this opportunity to speak with you and we're happy to take any questions.

This is phenomenal.

Thank you very much.

I know that the race and social equity toolkit that was presented in December, this was just one slide, maybe even just a bullet among many in the presentation on RSGI, and it piqued my interest because I knew that these conversations were happening around looking at what other jurisdictions were doing for social equity.

in relation to the cannabis industry.

So really thankful that this was all happening and that this got flagged as part of our RSGI presentation.

I see with us still Gerald Hankerson, and I wanna make sure that we got a chance to get to all of your questions as well.

And I wanna make sure that if there's council members here who have questions, please feel free to jump in and ask those of FAS.

Wonderful, Council Member Nelson, please go ahead.

and as Council Member Nelson is coming off of mute, I'll note Council Member Herbold next, and I do see Sarah Woodson, if you have a question, of course we'd love that, but I think it might be a carryover hand, so I just want to double check.

Okay, great.

Council Member Nelson and then Council Member Herbold.

Well, first I want to thank all of the panelists for coming today and talking about what your jurisdictions have done in this area of equity in the cannabis industry, because I fully support the goals.

And also I just learned today that Council Member Herbold was, you have long engagement in this issue and I'm gathering that you helped form this team.

this interdepartmental team that eventually turned into RET.

And so thank you very much for putting that together, because I think this is a very the toolkit is extremely important.

And I just want to note that I fully support the implementation of the of the five key policy change recommendations.

I understand that there is, that the city of Seattle does receive about $1.4 million from the state excise tax.

And, you know, what is, this is a question for offline, but that is a good source of funding to get this off the ground.

And I don't know where, what that money is being used on currently, but I support allocating it in part or all of it to moving forward on this.

So what I really like about this framework that FAS is presenting is that it is consistent with the work that the LCB's Cannabis Social Equity Task Force or task force on social equity and cannabis anyway, is doing already because, and I just want to highlight some of the groundbreaking work that Washington has done for people that don't know.

It's called the Social Equity and Cannabis Task Force, by the way.

In 2020, HB 2870 authorized LCB to issue a limited number of cannabis retail licenses to social equity applicants.

And they are defined as very similar, someone who lives in a disproportionately impacted area, has been convicted of a cannabis offense, has a family member that's been impacted by a cannabis offense, et cetera.

So the fact that it's in line with what the state is already doing is positive for me and it makes our work easier.

The presentation mentioned, this is a question, the data collection.

that FAS is going to do.

So by that, do you mean a collection of or an analysis of the status of equity in Seattle's retail stores when it comes to employees that are already working at these stores?

Because I think that if that hasn't been done, I think that would be a great avenue just to survey how many people working in these stores already could already represent some of these criteria.

That would be really helpful information for us going forward.

So in preparation for this discussion, I did reach out to Ollie Garrett, who is a member of the LCCB and also president of Tabor 100, which advocates for black businesses in the region.

And she, when we're talking about a social equity fund and a potential tax, because I think this might be where this conversation is going, Based on UFC W's presentation and also kind of the what was said in the previous committee She mentioned that it would be that she's concerned about that because it could really negatively impact our shops here.

And she mentioned that sales is not a good indication of the cost to operate these businesses.

And it would likely hurt, usually, as always, when we're talking about small businesses, those owned by people who lack capital, whose sales are lower, who don't have multiple locations, etc.

So that is one thing going forward I think that we should engage with Ms. Garrett on some of these issues.

So, you know, I have other questions but I really appreciate this and I'm going to let Council Member Herbold talk because she'll probably answer them.

Thanks.

Thank you.

And I think some of those questions maybe are teething up for future discussion too among the committee here.

But Council Member Herbold, I see your hand up.

Please feel free.

And I know FAS may have some comments as well.

So let's get your questions in there and then they can answer them together.

Thank you so much.

And just for the record, I mentioned earlier that in 2020 and 2021, I worked with OIR to lobby for the state legislation.

I had nothing to do with FAS setting up special social equity effort and all credit goes to them, responding to, I think, a lot of what they heard at the social equity forum that the city hosted to talk about exactly this issue in 2020. I apologize for not giving credit where credit is due.

I'm sorry.

Thank you.

I wasn't trying to give you a hard time for that.

I was just trying to say, I don't get any credit for it.

I get it.

But thank you.

And I appreciate Council Member Nelson, your reference to other tax climate for small business and specifically this business.

We know that the state sales tax, I think as compared to some other jurisdictions might be small, it's a 6.5 percent, but the state has an excise tax that is a very large excise tax, and then Seattle has a flat regulatory fee.

A few years ago, we raised, and I actually was a co-sponsor of that increased along with former council member Burgess, we raised that regulatory fee because the goal is to recapture the costs associated with the regulation, which includes significant annual inspections.

And so right now, the regulatory fee is about $3,500 a year.

And I've been working with FAS sort of on and off again to So a commitment I made when I took that position with that fee, which is to look at the areas in which the FAS, the city inspections associated with the FAS regulatory fee are duplicative of state inspections, and also to look at the issue of equity and some of the smaller operations.

And I know FAS does have a proposal they were anticipating we would make an adjustment consistent with that proposal in last year's, I'm sorry, the 2021 proposed budget that would take into account factors such as reduced staff time necessary to support the program because of changes from a annual inspection to a twice, once every two years inspection.

So I know from FAS, they've informed me that the previous administration actually didn't support that proposal.

And I really am looking forward to an update on sort of the nitty gritty on what that proposal is.

And if we're talking about some sort of an additional tax to support an equity fund here locally in Seattle.

I really want to fulfill the commitment I made to the industry to take a look at these regulatory fees at the same time and look at increasing them as well.

That's not a question, it's more of a statement.

I do have a question as relates to some of the recommendations from stakeholders on slide 7. And that's specifically, I appreciate you lifting up the work that former city attorney Holmes did to get vacated over 500 misdemeanor convictions.

As it relates to dismissing felony convictions, does a city have the authority to file this motion, or does another jurisdiction have to file the motion?

And then secondly, in our last discussion, and I didn't see it, I know we're all working with different groups of stakeholders, and there may be some overlap, but the recommendations we heard in council member mosqueda's last panel discussion in our previous meeting from local folks was not just um demands for vacating sentences but actually for expungements and i'm wondering um the A small amount of research I've done in this area is that state law prohibits expungements.

But I'm wondering if perhaps they could be legislated on a city level, even if banned by state law, because we're talking about expungements for things that are no longer crimes.

And just interested to know whether or not you've taken a look at that issue at all.

Thanks.

Thank you.

Some great questions and great comments.

In terms of does the city have authority, we spoke with some folks, I believe, yesterday or the day before.

The city doesn't have the authority to do that, but what could be helpful is having council and mayors backing to the folks who need to make those decisions.

And I love the fact of the expungement versus vacate, because when we talk about the impact to the individuals who have felony convictions, their livelihood is impacted gravely when they're talking about access to housing, access to jobs.

So we would love to look at how that is done.

And these are, you know, when community has asked, we don't know what the, what it's going to take to get it done, but that's where we work on, on that together.

And then with your support and thank you to the FAS leadership for supporting everything that community has asked for.

And so now we're here for council and mayor support to figure out how do we get that done?

We don't know exactly also where the funding's gonna come from, whether it's a percentage of excise tax, B&O is also funding that's there as well, which is in tune of 600 to $800,000 in a fund where we could redirect dollars.

We don't know where the money's gonna come from.

We're just saying in 2022, can we put our heads together and figure this out for community at large.

Also, I do support the Budtenders.

We did not.

I believe that was asked previously.

Did we speak to Budtenders?

We did not go into stores to speak to Budtenders.

I don't even know what that would have looked like if owners would have seen the city come into their stores and say, hey, I want to actually have a conversation with your Budtender.

We did reach out during our our forum that we had at Langston Hughes to community at large, and we had business owners there.

We knew that there were business owners there because we know some of the business owners, but we were not sure if we had budtenders in that space.

But with all the work and all the different folks who were a part of this engagement or who just have been impacted, I think adding budtenders to this who need support versus like not doing this at all, and then just focusing on.

But I think anybody who's impacted, which was what this is all about, was the most harmed.

If they are included in the most harm, then together we can get this done.

Because what we don't want to see is communities separated.

And we don't want to start an oppression Olympics.

We want to bring everybody together, create something that is going to serve the folks who are most harmed, whoever that may be.

Thank you so much.

Council Member Herbold, did you have additional follow-up, or Lyshan, did you have anything to add?

No, I think Rick covered it.

Yeah, no, I think that's good.

Thank you.

Okay, I guess I do just have one more question.

Going back to the question I asked the previous panel for FAS, what are your thoughts about the land use question?

You know, if we have two equity licenses right now that we don't have the zoning capacity to site because of the restrictions, should we get working on that?

1,000% Council Member Herbold.

So we are, that's why we had, one of our partners was SEIC, the folks who actually look at permitting and zoning.

They were hand in hand with us in this.

They were part of our work.

And so we were looking at, what was it?

It was the reducing buffering exemptions from dispersion and opening up some of the districts like Stadium District and Pioneer Square.

some services that we are not able to get into right now.

So working with you all to do that.

Also thinking about, there was over 400, I think it was mayor's office or city council that gave that report out.

We lost 450 businesses during COVID in the downtown corridor.

If we had two licenses, somewhere in there with working with SDCI, can we pinpoint where the two licenses could go?

Some folks talked about real estate and retail space, If you look around, if you guys drive around the downtown area, you're gonna see people who have just been, those doors have been closed for a very long time.

And I'm sure that they would be welcome to at least two people somewhere within that corridor so that we can help revitalize the owners there too.

Thank you very much and appreciate the questions.

I know there's a lot of interconnectedness here with other committees and so I look forward to working with all of our council members as we think about the various policy prongs here.

I want to again thank the folks from the other jurisdictions who shared their journey to get to some of the equity principles and policies in front of them and I think As you can tell, there's been much work done.

And as we think about the opportunities as outlined here by our presenters from FAS, there's much in the works already.

So how do we sort of channel some of the shared interest in doing something relatively quickly so that we can create a more equitable recovery in the wake of COVID here?

Rick, I see your hand up.

Please go ahead and you can, oh, go ahead.

Yeah.

Yes.

I just wanted to say thank you because within those two years we reached out to several cities.

We hired a intern, so thank you again to FAS, because they gave us funding to hire an intern to speak to.

Before we got started, we wanted to speak to all these other cities who had been doing this work.

And so I just wanted to shout them out and thank them for their support in Seattle's work at this, Los Angeles, Sacramento, San Francisco, Portland, Oakland, Detroit, Illinois, Massachusetts, Michigan, and Denver.

So just thank all of you guys for helping us with this work.

Sorry, my mute button was moving on me.

Thank you very much for those comments, and thanks again for your presentation.

I see two more hands.

Please go ahead.

Labor lead is on, Hankerson, and then we'll have Council Member Nelson.

Thank you, Council Member.

I just wanted to reiterate that Mayor Harrell is definitely in support of equity in cannabis, and we're definitely looking forward to work with you, Council Member Dominguez-Scada, to get this good policy done.

Really appreciate that, and thank you again for your participation throughout the meeting here today.

The mayor's office has been very much a leader in this effort as well with community, so thank you.

And specifically to you, Gerald, for the work that you've done in the past and you're currently doing.

Council Member Nelson.

Oh, this is a question for Rick.

Is the work that you've done to, or your intern did to look at other cities, if that's available in a report form or just individual files or something, I'd really be interested to know what your research found.

Thanks.

can drop a link to that in the chat right now, actually.

Thank you, Lincoln.

Yes, we'll get that right over to you.

Excellent.

Great question.

Thank you for the resources there.

It gives me a lot of ideas for a subsequent conversation that I'd love to have in our next committee meeting.

So we'll stay in touch with the council members.

I'll reach out back out to finance and administrative services as well as the mayor's office.

And we'll keep you all updated as this conversation progresses for what the next agenda item could include Also on our next agenda, which would be march 16th Wow, we're already in march.

Yes.

So mid-march mark 16th at 9 30 a.m We'll have a few housing-related items on our agenda, including the possibility of having the Finney Ridge land transfer legislation, El Centro land transfer legislation, and the Office of Housing, Staffing, and Appropriation Changes legislation.

With that, this is, again, early in the conversation, but as you heard from our panelists, and I believe underscored by the FAS presentation, There's a huge sense of urgency around this, especially as we think about a more equitable recovery.

So thank you all for your extra time today.

We're about 15 minutes over, but it was really robust discussion.

So thanks everyone, and we will see you on March 16th.

With that, the meeting is adjourned.

Thank you all.

Bye bye.

Thank you.

Recording stopped.