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The demographic most disproportionately impacted by the red tape and high taxes surrounding the cannabis industry are Black business owners.
In 2017, Los Angeles politicians painted an optimistic picture of a social equity program aimed at creating opportunities for disadvantaged business owners in the cannabis space (race-based programs are illegal under California law). Local governments across the state have launched social equity programs, and the state’s Department of Cannabis Control has awarded nearly $100 million to local governments with social equity programs to help get cannabis business owners fully permitted. The city of Los Angeles was awarded $22.3 million, more than any other local government. However, even this state funding has become a local controversy.
Several Black business owners were present at the latest L.A. Cannabis Regulation Commission meeting to voice their concerns.
“I’m actually fighting back the tears because I actually believed in this program,” said Osajefu Oyadeye, a licensed business owner from Los Angeles, said at the meeting.
“I wanted this industry to thrive in this city where I’ve been a resident all my life. If the social equity program isn’t reparations for the war that was fought against me and those like me in my community, then what is it?” Oyadeye continued.
Asia Allen has been in business four years and while her dispensary makes $120,000 a month, after taxes, fees and payroll she is only left with a $2,000 profit. This is before purchasing product to stock the dispensary, she said.
“I’m so busy trying to keep up with taxes, and payroll and rent, and pay my people, I can’t survive like this. We can’t survive like this. We need your help,” Allen told the council.
As cannabis business owners California seek policy support from Sacramento to find a way forward, opposition to Haney’s bill continues to gather.
Organizations like Youth Forward, Child Action Inc.and Indigenous Justice say suspending the tax would break promises made to the Californians they represent who were ensured by policymakers that a portion of the money raised from the sale of marijuana would be invested into health and social programs.
Even Getting it Right from the Start— an organization that bills itself as being devoted to developing “optimal cannabis policy –opposes AB 564. That group argues that eliminating the tax would favor the cannabis industry over the needs of children.
“California’s cannabis taxes are far lower than states like Washington and fund critical services for kids, the environment, and public safety,” said Dr. Lynn Silver, a pediatrician and senior advisor at Getting it Right from the Start, in a press release. “Proposition 64 promised to invest in healthier communities. With a significant budget deficit and federal funding for children and environmental programs dwindling, now is the time to protect, not slash, these critical investments.”
Last week, AB 564 was ordered to a third reading in the Assembly Appropriations Committee after committee members voted 13-0 to approve it with amendments.
On May 5, the Assembly Revenue and Taxation Committee voted 6-0 to advance the bill with one member counted as a no-vote.
Oyadeye says the state and local governments benefit by supporting struggling marijuana dispensary business owners.
“You’re pushing the people who want to shop legally into the illicit market. The higher the taxes are, the more the customers will go to the illicit market,” he stated.
“]] California Black marijuana store owners support bill to suspend tax increase on cannabis, addressing economic and social challenges. Read More
