Committee backs ordinance to strengthen cannabis equity, shorten transfer limits and preserve equity ownership

The Public Safety & Neighborhood Services Committee on Sept. 23 voted unanimously to recommend an ordinance to the Board of Supervisors that would revise San Francisco's cannabis permitting rules to prioritize and preserve social-equity applicants.

Director Marissa Rodriguez of the Office of Cannabis told the committee the ordinance has three components: enacting the mayor's initiative to further prioritize equity applicants (including first priority for 100% equity sole proprietors and a second priority for temporary-permit holders who share manufacturing space with equity applicants), formalizing equity-preservation policies for when equity ownership drops below thresholds, and a set of administrative revisions. Rodriguez said incubation support would be permitted during the build-out phase rather than only after permit issuance, which she described as the most capital-intensive period.

Rodriguez outlined equity-preservation commitments: if an equity applicant's verified ownership drops below 20%, the business would be required to contribute the equivalent of 1% of gross revenues to community organizations, purchase equity products, commit to workforce or mentoring programs, or incubate equity businesses by providing access to real estate or capital. She also explained administrative changes including shortening the period during which a cannabis business cannot be sold from 10 years to 5 years and exempting transfers triggered by an owner's death.

Rodriguez provided approximate pipeline numbers: "about 50" existing medical licenses in tier 4, "approximately 126" temporary licenses, about 30 applicants in build-out, "approximately 70+" in planning, and 10'15 navigating early permitting steps. Multiple public callers who identified as equity applicants and advocates (including Lance Williams, Damien Posey, Connor Johnson, Mitchell Salazar, Johnny Delaplane and others) spoke in support, praising equity preservation and the 5-year transfer change; some callers asked for an even shorter transfer restriction.

The committee adopted a non-substantive amendment (removing a Planning Commission-related finding) and then voted 3-0 to recommend the ordinance as amended to the full Board (Stephanie: aye; Haney: aye; Marr: aye).

Next steps: the ordinance, as amended, will be forwarded to the Board of Supervisors for consideration.