Social Equity Retail Cannabis License Application Window Opens March 1, 2023

By Aaron Allen, The Seattle Medium           

The Washington State Liquor and Cannabis Board (LCB) recently announced that it will open the application window for approximately 44 social equity retail cannabis licenses March 1, 2023. The 30-day application window closes March 30, 2023 at 5:00 p.m.

 “Today’s announcement is the culmination of efforts by the LCB, the Social Equity in Cannabis Task Force (SECTF), and our partners to take the first steps available to us toward addressing the disproportionate harm caused to communities from the War on Drugs,” said Board Member Ollie Garrett and SECTF member.

State law caps the number of retail outlets at 556. Since 2020, the LCB has held in reserve retail licenses that were forfeited, cancelled, revoked or never issued that will be available in jurisdictions across the state. Thus far, 44 retail licenses have been reserved for the social equity program. 

A major concern to many since the inception of cannabis licensing in Washington state was why wasn’t the issue of social equity taken into account during the legalization process.

“During I-502 [a voter-passed initiative that legalized the sale and use of recreational marijuana in Washington state] social equity was not addressed,” says Becky Smith, Licensing Division Director for LCB.  “Being the first recreational program in the U.S., I’d say we didn’t know what we didn’t know. The purpose of the [social equity] program is to increase the number of cannabis retail licenses held by social equity applicants.”

“It’s important because it is for communities that were disproportionately impacted and to help reduce the harm inflicted on individuals, families, local areas,” added Smith. “It’s a start to righting the wrongs but it is just a start.”

To qualify for a social equity retail cannabis license, each applicant must have at least a 51% majority ownership interest, must be a person(s) who has resided in Washington State for six months prior to applying, and meets at least two of the following qualifications:

• The social equity applicant(s) have lived in a disproportionately impacted area (DIA) in Washington State for a minimum of five years between 1980 and 2010. 

• The social equity applicant or a family member of the applicant has been arrested or convicted of a cannabis offense.

• The social equity applicant’s household income in the year prior to submitting the application was less than the median household income within the state of Washington, which is $82,400.

“As an owner or applicant, one must be the majority stockholder of the business meaning one has to own 51 percent of the business,” Smith explained. “We want to keep social equity licenses with social equity applicants, so the first year you cannot sale your business. After that you do have an option to sale to other social equity applicants.”

The LCB recently posted maps online indicating Disproportionately Impacted Areas. The interactive maps are an essential tool for identifying whether an applicant meets one of the above three criteria to qualify for the program. Disproportionately Impacted Areas as defined by the state legislature include census tracts that meet the following criteria:

• High poverty rates;

• High rates of participation in income-based federal programs;

• High rates of unemployment; and

• High rates of convictions.

 “Through a task force we learned that there wasn’t enough information provided. One of the things that we did in order to help prepare folks is we created a website that provided information on “what can you do now”,” says Smith. “There is a social equity checklist. For example, what do I need to do to make sure that I qualify.”

“[There are] opportunities for those with criminal background,” added Smith. “We recognize that if you are a person of color that may have been arrested, more than likely you were convicted. Higher rate of folks in the data that we reviewed were convicted of a cannabis offense and that includes felons.”

Many have asked if this effort is too late? Many are also hesitant due to the difficulties of getting into the cannabis business. Has the opportunity for long-term growth been thwarted as those who positioned themselves years ago have monopolized the local industry?

“Getting into this business at any point is difficult,” says Smith. “The best place to get into the cannabis business is as a retailer. The 44 locations that are available some of them are great locations.”

“No, there are not a lot of licenses,” she added. “44 licenses is not a lot. And so, when I say its just the beginning, it is just the beginning. For those few that are in King County there are 8 licenses available in King County, but it can still be difficult to find a location.”

Another obstacle for those interested in getting into the cannabis industry is financing. According to LCB, when it comes to financing there are people out there that will need some sort of financing and they are very clear in that it is important for applicants to know who they’re going into business and investing with.

“There are financiers available within the industry,” says Smith. “There is financing within the state of Washington and outside of the state. The law no longer requires you to be a Washington state resident in order to finance a cannabis business.

According to Smith, the LCB website is the central source of information regarding the social equity program, and she encourages anyone interested in applying for a social equity retail cannabis license to begin their research there.

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