Thank You, Governor Newsom: San Diego Awarded Nearly $900K To Promote Equity In Cannabis Industry

California Governor Gavin Newsom’s Office of Business and Economic Development granted more than $880,000 on Thursday to support equity in San Deigo’s marijuana industry.

"Receiving this critical funding source is vital to jump-starting our Cannabis Equity Program," said Lara Gates, the deputy director of San Diego's Cannabis Business Division reported KPBS. "These dollars will provide a solid foundation for our initial cannabis equity applicants to get a strong foothold in the legal cannabis market."

The newly approved funds of nearly $900,000 are aimed at helping those who want to enter the regulated weed market in the city by covering their permit and license fees, and related property expenses, among others.

This is not the first time San Diego has obtained financial backup to further develop the local cannabis industry. Last year, the California Department of Cannabis Control granted gave the city $764,00 to "develop online the tools necessary to help businesses navigate and comply with local and state laws and streamline permit processes."

San Diego was one of 16 cities and counties to receive a combined $15 million, financed via tax revenue collected from adult-use marijuana sales across the state.

Lower Tax Rates

The news comes on the heels of San Diego’s Board of Supervisors approving lower tax rates for cannabis stores in the county to allow businesses to compete with those in neighboring cities.

“As we set these dollars that are collected, I do think they should be benefiting the communities that they’re in,” said Jim Desmond, one of the supervisors. “County code allows for consumption or smoking and tasting rooms on site. If people are getting high and driving on winding roads (that are) dimly lit in the unincorporated area, that’s a bigger problem.”

Board chair Nora Vargas proposed taxing crops by square footage rather than revenue, which she said would be a more predictable cost for cannabis business owners. 

On February 28, the board will vote on whether or not to authorize the cannabis tax ordinance. If approved, the tax will go into effect on April 1, with the first payments due in July.

In 2022, Newsom signed Assembly Bill 195 to eliminate the state marijuana cultivation tax. A study conducted in 2022 highlighted the impact an immediate elimination of the cultivation tax would have on critical issues facing the state's legal cannabis market from seed to sale. The state could increase legal cannabis sales and earn 123% more in total monthly cannabis-related tax revenue by 2024 by eliminating its cultivation tax, according to the study.

Photo: Benzinga edit; Source: Shutterstock