Senate passes bill promoting social equity in cannabis

SB 5080, expanding the Social Equity in Cannabis program, passed the Senate and is waiting to be scheduled in the House Regulated Substances & Gaming Committee. The policy was recommended by the Social Equity in Cannabis Task Force final report.

The bill would:

• Broaden and amend definitions of disproportionately impacted area, social equity applicant, and social equity plan in the law.
• Extend the program until July 1, 2032.
• Provide a one-time, one-license annual fee reimbursement to any current cannabis licensee who submits a social equity plan to the Liquor and Cannabis Board (LCB).
• Modify the time period when cannabis licensees must have been issued a cannabis license to qualify for a Social Equity Technical Assistance Grant from the Department of Commerce.
• Require the Joint Legislative Audit and Review Committee (JLARC) to review cannabis production against market demand and capacity by June 30, 2025.

AWC is encouraged that SB 5080 does not attempt to preempt local government’s authority to prohibit cannabis businesses. In fact, SB 5080 would specifically require the Liquor Cannabis Board to ensure geographic disbursement in new equity licenses and would allow for an opportunity for the local government to object to a new license.

Unfortunately, another bill, HB 1650, would limit local government authority by preventing local prohibitions of cannabis retail businesses in their jurisdiction after July 1, 2027 unless a majority of voters in the jurisdiction voting in a general election vote after July 1, 2023 to approve an ordinance prohibiting cannabis retailers. This means that even cities that had previously submitted the issue to voters would need to resubmit the ban to a vote. Currently about 80 cities out of 281 have some kind of prohibition on cannabis retail businesses.

The bill also establishes state preemption of the regulation of cannabis retail businesses except for existing zoning authority for siting, ordinances of general application, or the authorization for voter-approved bans. This regulatory preemption will likely impact cities that currently allow the siting of cannabis retailers forcing them to revise their requirements.

Finally, the bill tries to allocate cannabis excise tax revenues from certain new cannabis retail outlets located in jurisdictions that had prohibitions that were not reimposed by voter approval until July 1, 2032 to support substance abuse disorder prevention treatment services as well as cannabis research.

AWC testified in opposition to HB 1650 and several cities also expressed opposition due to the preemption issues as well as the confusion created by the redirection of cannabis revenues. AWC urges cities to reach out to their legislators with concerns.