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Supervisors propose changes to SF’s cannabis equity program

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More than 100 applications to The City’s cannabis equity program are still pending approval. (Jessica Christian/2017 S.F. Examiner)

Nearly a year after cannabis regulations were adopted by the Board of Supervisors, debate has resumed over proposed changes to the equity permit program, where more than 100 applications sit pending approval.

The equity program is meant to provide reparations for those impacted by the policing practices of past decades that disproportionately impacted people of color in low-income neighborhoods through enforcement of drug laws.

In regulations passed late last year, the board allowed existing medical cannabis dispensaries to start selling recreational cannabis and agreed to permit new locations if they were “equity applicants” who meet certain criteria, such as having been arrested for selling cannabis between 1971 to 2016. To date, no equity applications have been approved by The City, but 109 are under review.

Now, some supervisors want to limit how many storefront locations each equity applicant can apply for — some have sought as many as seven, according to one city supervisor. Others are seeking to expand program eligibility criteria to include past stays in homeless shelters and mandate an income requirement.

The changes are being considered as part of a larger proposal introduced by Mayor London Breed and co-sponsored by supervisors Rafael Mandelman and Malia Cohen, which was heard by the board’s Rules Committee Wednesday.

The legislation would make a host of changes to the regulations, but on Wednesday the committee only forwarded to the full board four provisions related to the duration of temporary permits, including allowing medical marijuana dispensaries to continue to sell retail cannabis using a temporary permit for another year. The temporary permits are set to expire Jan. 1. This would give The City more time to hammer out regulations and process permit applications.

Among the proposed changes held back by the committee for further debate is an amendment by Supervisor Jane Kim that broadens the housing criteria to qualify for the equity program.

An equity applicant must satisfy at least three of six criteria. Among the six is if they “lost housing in San Francisco after 1995 through eviction, foreclosure or subsidy cancellation.”

Kim’s amendment broadens the housing criteria to include someone who has lived in permanent supportive housing, a city-funded single-room occupancy hotel or stayed in a Navigation Center or homeless shelter.

Supervisor Malia Cohen criticized the amendment. “The purpose of the equity program is not to help all disadvantaged communities of San Francisco,” Cohen said. She said the program is meant to help those communities impacted by the war on drugs, pointing to the Bayview.

“It’s a little bit out of scope for the spirit of why the program was created,” she said.

But Kim said, “The very narrow definition of defining housing insecurity as only eviction or foreclosure or revocation of housing subsidy doesn’t really meet the spirit of what I consider housing insecurity.”

Committee members said that Supervisor Aaron Peskin also intends to seek a limit on the number of storefronts an equity applicant can apply for.

Kim signaled her support of that change. “Hearing that there are equity applicants that have as many as seven applications, I think that that should be limited,” Kim said. “On a certain level, once you get an application approved you are no longer an equity applicant.”

Supervisor Ahsha Safai said he wants to make area median income a required qualification for an equity applicant.

Among the six criteria is to have a household income below 80 percent of the average median income in San Francisco for 2017, which for a one-person household is $64,550. Safai wants to raise the income eligibility to 100 percent area median income and make this a requirement. The applicant would then have to meet two of the other five eligibility criteria.

“It’s a social equity program,” Safai said. “I think it’s important that at the time of application that the applicant themselves must be someone that is in need of trying to get a foothold in this industry.” He said the “financially stable” shouldn’t benefit from the program.

Another point of contention is what stake outside investors can have in a permit holder’s business. The proposal allows up to 49 percent. The board is also weighing whether to grandfather in more medical dispensaries who were initially cut off since their applications were still in the approval pipeline. Safai, who opposes the change, said up to 10 more could be allowed to sell retail than initially proposed, although the Office of Cannabis couldn’t confirm that number.

Editor’s Note: This story has been updated to clarify the action the committee took.

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