As anyone with a small business knows, staying afloat isn’t always easy. For those with a small-scale cannabis business, navigating the technical world, securing capital, and staying on top of regulatory compliance add even more complexities. Fortunately, equity grants have made life a little easier for some California growers—here’s how. 

But First, What Are Equity Grants?

Equity grants are state government grants. In California, they’re awarded by The Governor’s Office of Business and Economic Development and designed to support cannabis businesses operated by individuals who were disproportionately or negatively affected when cannabis was illegal. 

The funds are distributed to cities and counties, where they can serve several different purposes. They can be used to assess cannabis equity in a region and, if needed, create a cannabis equity program—or support one that already exists. 

They can also be used to directly support equity applicants and licensees by:

• Funding technical assistance

• Permitting reduced or waived fees

• Providing low or no-interest loans and grants

• Funding a business location

• Providing assistance for recruiting, training, and retaining a diverse workforce

• Funding business resilience and enabling emergency preparedness. 

The idea behind the equity grants is to level the playing field a little for those harmed by prohibition and reduce—or completely eliminate—the illicit cannabis market by making it easier for more people to access the legal marketplace. 

So far, California has awarded more than $40 million in equity grants. 

Mendocino County’s Equity Grants

In 2020, Mendocino County was awarded $2.2 million, just shy of another Emerald Triangle county, Humboldt, which received $2.4 million. Additionally, the Mendocino Board of Supervisors allocated an additional $100.000, with a specific aim to “provide funding and services for those hardest hit by the War on Drugs.”

Facilitated by Elevate Impact, those eligible for the Local Equity Entrepreneur Program (LEEP) can receive direct grants up to $50,000, fee and permit waiver grants of up to $7,000, or technical assistance grants of up to $2,000. As anyone in the craft cannabis world knows, this funding can be a life-changer for a small business owner. 

Craft Cannabis Needs Continued Support

As federal legalization may set the stage for a cannabis monopoly, small business grants like these are one way to prevent smaller producers from getting wiped out by cannabis robber barons. The landscape for cannabis is changing, and if it follows in the footsteps of food, pharmaceuticals, and tobacco, we could eventually see Big Marijuana—and an industry that leaves little room for small businesses.  

The craft cannabis industry can learn from the craft beer industry in many ways, especially how it remains one of the least concentrated industries with the big brands amassing “just” 75% of the market. Without antitrust protection that could stop the power grab for the multibillion-dollar industry, cannabis may suffer a different fate, where just three or four large firms control up to 90% of the market.

That’s why equity grants and small business grants are key for keeping smaller players afloat. It’s also why collaboration is crucial, and why co-ops are one of the ways small local farmers can thrive in today’s legal industry. 

Craft cannabis and local businesses have survived many obstacles, and with the support of buyers looking for SIMPLY CLEAN cannabis that goes far beyond the status quo, we can continue to do so. Play a role in strengthening the small-scale cannabis industry before it disappears by creating a Wholesale Account today.