Why are cannabis equity programs failing people of color? Here’s a Black, female business owner’s perspective
Marlo Richardson is proof that Los Angeles’s cannabis equity program isn’t void of success stories. She’s one of the few social equity licensees to own and operate a vertically integrated cannabis business in California. Now, her success has made her reflect on why the programs aren’t working for so many others.
If you live in The Golden State, you may recognize her work. Richardson is the owner and founder of the cannabis delivery company Just Mary, along with various brands such as Laze, Tremendo Trees, Urbane Grind, and Homeschool. Her products are sold in over 200 dispensaries throughout California.
On top of working in a cutting-edge industry, Richardson acts as a business advisor, speaking to companies and universities on her journey to success and sharing tips for entrepreneurs on her podcast “Business Bullish.”
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Richardson applied to Los Angeles’ social equity program, an initiative designed to fund and support those disproportionately impacted by cannabis prohibition who wish to obtain a cannabis license, when she first dipped her toe in the industry. She credits it with giving her the ability to take ownership of all aspects of her business, since several forms of cannabis licensure in Los Angeles are only open to equity applicants until 2025.
“Having a social equity license meant I could receive licenses that were not open to other applicants at the time,” Richardson told GreenState. “Without being a social equity applicant, I would not have been able to receive my distribution, cultivation, manufacturing or retail licenses. Of those, only the distribution licenses are open to the public.”
But Richardson was quick to add that her story is “definitely not every other social equity story” to come out of Los Angeles’s program.
The program has become notorious in recent years for the extensive red tape it reportedly puts on applicants, a system glitch that allowed applications to be submitted by computer bots and its slow processing time for cannabis licenses.
The issues have led some to file lawsuits against the city, and one of the program’s designers has even admitted that it is nearly impossible for equity licensees in Los Angeles to open businesses.
Los Angeles’ equity program isn’t the only one struggling to carry out its promises. Though almost every state where cannabis is legal has an equity program, there are still very few minority-owned cannabis businesses in the U.S.
The latest data on the subject shows only ten percent of cannabis business-owners identified as African American/Black or Hispanic/Latino.
Richardson believes the failures of Los Angeles’s program, and many others around the country, may stem from a lack of training. While many of the more successful social equity programs around the country (Oakland, for example) offer training programs for licensees in subjects such as cannabis law and business management, Los Angeles provides no such resources.
“Many people applying (for a cannabis license) through these programs have never owned or operated a business,” Richardson said. “And there is little support to show new business owners how to structure and set up a business, or how to sell products and or services. I think social equity programs could be improved with business training, and sales and marketing training.”
GreenState reached out four times to the Los Angeles Department of Cannabis Regulation, calling twice, leaving one voicemail and sending two emails, and after 68 hours, the agency has not responded. This article will be updated as necessary.
Richardson said she benefitted from watching a friend apply for a cannabis license, and learned about the industry from them. When the opportunity finally came to apply for a cannabis retail license through the social equity program in Los Angeles, she was “ready and waiting.”
She said, “once you understand branding, marketing and visibility, sourcing products to bring to market becomes second nature.”
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“Getting the license is just the first step,” Richardson said. “Everything that comes next is how to operate and grow a business.”
Another issue she sees is that the cost is “unaffordable” for most working-class families. Cannabis is already an expensive industry, and ironically, licensure requirements pose their own financial burdens on equity applicants.
In Los Angeles, for instance, applicants are required to already own real estate for their cannabis business. This forces applicants to begin paying rent for retail space, with the possibility of never seeing a return on investment if their application is turned down.
And even if they do receive a retail license, the process can take so long that they are forced into debt.
Richardson’s advice to social equity applicants is to have an emergency fund ready.
“(You should) know what you want to do and create a budget for it,” Richardson said. “Then, be prepared to go over the budget. The cannabis industry is filled with regulations and they are still constantly changing. Being flexible is the key right now to succeeding.”
There are other factors to consider, too. Equity programs are being co-opted by big brands around the country, and high taxes on cannabis products make the industry extremely expensive for entrepreneurs.
On top of that, cannabis is still federally illegal, so these businesses are competing with a thriving black market and facing roadblocks to testing products for safety.
Executives of California’s major cannabis businesses sent a letter to Governor Gavin Newsom on the challenges of the industry just weeks ago, writing, “The opportunity to create a robust legal market has been squandered as a result of excessive taxation. 75% of cannabis in the state is consumed in the illicit market and is untested and unsafe.”
With 20/20 hindsight, Richardson says she sees herself more as an anomaly of a broken system than as a testament to its success.
“I’m grateful to have been able to be a part of the program in Los Angeles,” Richardson said. “But, if I answer honestly, it is definitely not set up for the success of those truly impacted by the war on drugs.”
Elissa Esher is an editor at GreenState. Her work has also appeared in The San Francisco Chronicle, The Boston Guardian, Brooklyn Paper, Religion Unplugged, and Iridescent Women. Send inquiries and tips to elli.esher@greenstate.com.