I want to applaud the Long Beach City Council for passing the item to increase the number of Social Equity Brick-and-Mortar retail licenses in Long Beach by unanimous vote.
I want to give credit to LBC Triple C and other equity groups for championing this issue. Brandon Bolton and Edgar Cruz and many others deserve recognition for their tireless pursuit on this issue. They fought extra hard to bring this item to Long Beach and see it through. I would be remiss if I did not mention Al Austin and Stacy Mungo, who deserve full credit for having the courage to bring this issue to the forefront against the special interest of the rest of the cannabis industry. Without them, the brick and mortar discussion would be stuck in committee for an inordinate amount of time.
Although the passage of the social equity brick and mortar items was a huge first step, the real work begins now. It starts with crafting good policy that works for all. We want to see good labor standards, creating true equity rather than just granting a title of ownership, funding from our tax dollars to a wide swath of social equity-related programs (when the city is healthy again), and continuing to engage community partners to optimize policies that will create a program for applicants to succeed.
We recommend that there is sufficient time for equity applicants and investors to meet and get comfortable with each other, so there are no issues later. Catalyst has six social equity licenses in Los Angeles and one of them is in a troublesome state due to a partnership being put together in a last-minute fashion. We would like to see third party consultants, legal professionals, and other ancillary services made available so social equity applicants are protected from predatory practices as well as being fully informed of the details of their operating agreements.
Catalyst is proud to have been the lone cannabis retail operator supporting more social equity brick-and-mortar in Long Beach and have been the early wind at the back of these inspiring individuals despite the criticism we have faced for taking this position. To take action on this issue, I began working with Carlos Zepeda in 2020 to try and assist him with a $200,000 grant to open a distribution business through the original equity program. It was an extremely limited amount considering costs, but we gave it our best go and tried some creative solutions to try and make it work.
In going through the social equity process, we were able to see the shortcomings of the current system. In response, Catalyst Cannabis Co. decided to embark on starting our own private sector equity delivery project by turning one of our awarded delivery licenses into a social equity location. To do so, we funded the buildout and inventory, and put a revenue structure in place to ensure the social equity applicant would receive all the profits. Carlos Zepeda and his team are in the process of the final stages of training and this pilot program should be up and running by May 2021. We are excited to launch this first-of-its-kind program and will look to recreate it in the other communities where Catalyst has a retail presence.
There needs to be more diversity ownership of the current retail dispensaries in Long Beach. That said, Catalyst believes that this is a small portion of the conversation. It is a great initial step but in the end, an exceedingly small number of equity applicants will end up getting these licenses. We would like to broaden the conversation to include job training, reentry programs, record clearing clinics, and anything else that can uplift the community. We are recommending, once the budget shortfall is no longer with us and COVID-19 recedes, that the city allocate money from our taxes towards the wider issue of cannabis equity. We think the conversation needs to be extremely broad and the local government needs to invest in the issue as well. I see this work as a private/public partnership.
The social equity question needs to continue to be addressed and improved. I think operators who have seen multiple jurisdictional processes who are well-intentioned have an advantage over city governments who have not had the benefit of going through the bumps and bruises of the industry all up and down the state. Catalyst continues to be committed to learning and dedicating itself to this process. We plan to continue our work all over the state and expand equity in every form.
The real heroes in this movement are the activists who have pushed this issue to the forefront in many cities and we hope to be a catalyst for change on this issue.
Elliot Lewis is the CEO of Catalyst Cannabis Co.