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Sacramento, CA will provide $3.8 million in no-interest loans to participants in the Cannabis Opportunity Reinvestment and Equity (CORE) program to fund start-up costs for cannabis businesses. The city received the funds on April 21, 2020 from a $30 million Equity Cannabis Grant Program developed through the Governor’s office and the Bureau of Cannabis Control.
Core participants or those who are eligible can receive up to $25,000 loan that can be used to pay for capital improvements, real estate, or regulatory expenses. The announcement of the loans is well-timed as the city is close to accepting applications for ten (10) new retail dispensary licenses that will only be available to CORE participants. The city will make five (5) of the licenses available in 2020 and an additional five (5) licenses available in 2021.
Sacramento’s city council met on May 5, 2020 to review the license permitting process, zoning, and eligibility requirements for CORE participants. Sacramento will require CORE participants that receive a retail store license to retail 51% ownership and 51% profit sharing in the entity for 10 years. These limitations are designed to deter flipping of retail store licenses to non-CORE entities.
Sacramento is one of 16 local jurisdictions that received funding from the state’s Cannabis Equity Grant Program. Seven jurisdictions including Oakland, Los Angeles, San Francisco, San Francisco, Long Beach, Humboldt County, and Mendocino County received almost $29 million dollars to provide investment funding to social equity participants.
California also provided an additional $1 million in grant funds to nine (9) additional municipalities for use in building social equity programs. These municipalities include Lake County, Monterey County, Nevada County, Palm Springs, San Jose, Santa Cruz, Clearlake, Coachella and Stockton
In addition to Sacramento, other cities that are receiving funds are gearing up to issue licenses to social equity participants including San Jose and Los Angeles. The newly developed social equity programs will be tested as challenges to the process are already being raised in Los Angeles. Sacramento and San Jose should review the lessons learned to avoid similar issues.