If it had been white politicians promising that legal weed was going to make Black people rich, Kika Keith thinks she never would have believed them.
But throughout 2017, it was Black politicians, Black activists, and Black executives telling standing-room–only crowds in the historically Black neighborhoods of Los Angeles to start a marijuana business and create “generational wealth.” Keith attended dozens of cannabis events that year, trying to immerse herself in the city’s pot industry and learn everything she could.
On a sticky summer afternoon in September, she made her way to a Watts community center to hear from one of the most powerful people in Southern California: Herb Wesson, L.A.’s first Black City Council president. Wesson took the stage in a powder-blue suit and smiled. Looking out at rows of Black faces glistening in the heat, he opened by acknowledging a shared history of hardship: “Most of us grew up in houses that didn’t have air conditioning, so we can handle this,” he said. “We can handle this.” The room swelled with laughter and applause.
California was legalizing marijuana for anyone over 21, and Wesson declared that the Black and brown communities that had been disproportionately targeted for arrest when weed was illegal would now be given priority in running licensed cannabis businesses. “It’s very, very important that you participate,” he said, urging those present to seize this once-in-a-lifetime opportunity.
For Keith, Wesson seemed to represent a break from the city’s history of segregation and discrimination, offering a path to economic empowerment while standing before a mural of Black luminaries, including Sammy Davis Jr. and Kareem Abdul-Jabbar, at the center of the impoverished neighborhood where uprisings against police brutality erupted in 1965 and 1992.
“I’d never seen Black politicians speak directly to Black people and be like, ‘Black people, listen up!’” Keith told me years later. “‘This will be your only time in history! You have to get off your ass!’”
So she listened. At 45, she had three daughters and zero savings. As 2017 wore on, she and many other disadvantaged Angelenos became convinced that starting a pot company would bring them financial stability. “At every single one of these meetings, the people are like eating it up,” she remembered. “The people are like, ‘This is our saving grace! This is our redemptive moment!’”
Keith is the kind of L.A. person who uses “Blessings” as an email signoff but doesn’t go to church. She’s partial to gold bangles, knit beanies, and comfortable, oversize clothing in reds, oranges, and yellows. Her voice has a melodic softness to it, as though she speaks in lullabies, but this gentle exterior belies her tenacity. She has always been an entrepreneur. Several years before pursuing a cannabis business, when she and her girls spent a year in a homeless shelter, she used food stamps and pro bono legal assistance to start a company selling a raw green beverage, made with chlorophyll from alfalfa sprouts, at farmer’s markets around Los Angeles. It was her mother’s recipe, and as the company expanded, she refused to compromise on quality. She even sold a weed-infused version for a while, marveling at how much more she could charge for a healthy drink that got you high.
Soon the chlorophyll beverage was in Whole Foods across the West Coast, but Keith was still struggling to pay her bills. When she combed through her contract with the natural food distributor, she found fees and markdowns and lopsided provisions. She felt that, in her inexperience, she’d missed an opportunity to become a millionaire.
Cannabis was her chance to start over. Legal weed seemed like the perfect match between profit margins and plant medicine, between helping herself and helping other people heal. And this time, she wanted to involve her family. Her cousin had long grown her own weed. Just before California voted to legalize in November 2016, the two women said a prayer and made a pact over a single cannabis seed, vowing to learn the ins and outs of the industry, even if it got the cousin kicked out of her federally subsidized Section 8 housing. “We just made a plan that we were going to put all of our effort into this being a way that we could build a legacy for our whole entire family,” Keith said.
That September afternoon in Watts, Wesson positioned the future of legal pot in a similar fashion: a chance to close the wealth gap between Black and white families, to atone for the damage of the war on drugs, and maybe to provide some small recompense for the entire sordid history of racism in the United States. He described the plan as a product of Black unity, across politics and business, explaining that he was in “true partnership” with L.A.’s two other Black City Council members: “We. Work. Together. There is no competition between us.”
This spoke to Keith. She knew the harm caused by marijuana prohibition; her stepfather was once sentenced to seven years for selling $10 worth of weed. “So much of that blood that has been shed, so many families that have been destroyed, we’ve lived it every day, and so to think that someone is going to say, ‘Here goes a ticket out, and I’m going to give you special provisions because you did experience that?’”
Wesson said that the program was called social equity. For Keith, it was reparations by another name.
Back in 2017, Los Angeles was among the first places in the United States to legalize weed with social equity in mind. Today, social equity dominates the conversation about who should be allowed to sell legal pot, with programs planned or up and running in Michigan, Massachusetts, New York, New Jersey, Illinois, Connecticut, Virginia, Arizona, and more.
Each place defines social equity differently, but the term broadly refers to three initiatives: clearing past cannabis convictions from criminal records; reinvesting tax revenue to help communities of color; and prioritizing cannabis businesses run by “social equity applicants”—a euphemism for Black and Latino entrepreneurs, or whomever else the government defines as deserving a leg up.
In the past five years, the number of states allowing recreational cannabis shot from eight to 18; another 19 allow medical use. As customers transition from dealers to dispensaries, the $24.5 billion legal cannabis industry is poised to nearly double by 2025. With much of the existing marijuana market dominated by deep-pocketed, multibillion-dollar companies like Curaleaf and Green Thumb Industries, social equity began to seem like a simple and necessary corrective, an innovative way of accomplishing justice. Jay-Z created a $10 million fund for Black- and minority-owned cannabis businesses. Senate Majority Leader Chuck Schumer regularly tweets support for federal legislation to “invest in communities hurt by the War on Drugs.” Cannabis CEOs pledge to be part of the solution, issuing press releases filled with buzzwords about inclusion, criminal justice reform, and a historic debt to marginalized communities.
But behind the corporate rhetoric and the political promises are sobering numbers and widespread frustration with how social equity has harmed some of the exact people the programs are meant to help. In the five years since Wesson outlined a plan in Los Angeles, 1,629 people became verified as social equity applicants, but only about 35 retailers have opened. Other places have similar rates. In Massachusetts, which announced an equity program in 2017, there were only 16 equity businesses out of 194 cannabis businesses as of November 2021.
So far, marijuana legalization has been less a revolution and more a grim continuation of a deeply American form of inequality, in which prosperity and social mobility are technically possible but utterly unlikely. Equity applicants are, by definition, at a disadvantage, competing in the open marketplace against well-capitalized, politically connected companies on everything from zoning to pricing. Black entrepreneurs describe being sold on the illusion of easy riches, only to find that it takes money to make money, leading to predatory loans and partnerships that leave them feeling exploited. Governments struggling to oversee the programs are at their best too slow—and at their worst too close with those already in power to enforce both the letter and the spirit of the law.
For the past five years, Keith has thrown herself into achieving the goals of social equity: organizing her community, raising hundreds of thousands of dollars, and trying to hold Los Angeles accountable. But the closer she got to the inner circle of decision-makers, the more disillusioned she became. Starting a cannabis business is complicated and expensive. Everybody, it seemed, was out for themselves, no matter how they cloaked their intentions in the guise of social justice. It made her wonder whether anyone had even intended for equity to work, or whether the program was always meant as a gesture of appeasement or distraction.
“This is not just about really creating something historical and monumental,” she says now. “This shit is designed to fail.”
Keith comes from a long line of entrepreneurs whose attempts at generational wealth were thwarted by state-sanctioned exclusion and violence. Her great-great-grandparents owned land in Rappahannock County, Virginia, and operated a store. White neighbors did not want them there. “They were threatened to leave their land or be killed,” Keith’s mother, Shekinah Shakur, told me. “One of my relatives was killed in the doorway of the house.” The family fled to Pennsylvania, where Keith’s great-grandfather became a chauffeur.
Left out of what historian Ira Katznelson calls “white affirmative action”—the unions, social safety net, and federally subsidized mortgage loans created in the 1930s and ’40s—Keith’s grandparents still managed to establish a hotel and bar on the main drag of the only Lancaster, Pennsylvania, neighborhood where Black and Puerto Rican people were allowed to live. The business flourished until the 1960s, when the city used federal funding to cut down the neighborhood’s trees and destroy about 1,000 buildings, part of a nationwide push for “urban renewal”—a program James Baldwin referred to as “Negro removal,” because similar housing destruction in the name of slum clearance displaced tens of thousands of Black families across the country. Once again, Keith’s family left town, this time to Los Angeles.
As a kid, Keith loved to pore over the ledgers from her grandparents’ hotel, and in fourth grade she became obsessed with the stock market. Her parents were more interested in activism. Her father, Robert “Poppy” Keith, became a revolutionary at 10, when his mother brought him on a march to desegregate the local pool, and he saw his white classmates swimming where he wasn’t allowed. By 15, he was attending Black Power conferences. He co-founded a militant group in Lancaster called Black Rise, which protested police brutality, started a free heroin rehab clinic, and was committed to the same principles as the Panthers.
Keith’s mother, Shakur, used to walk past Keith’s father’s house and gaze up at him on the balcony, where he might be reading Malcolm X, Marcus Garvey, or George Padmore’s Pan-Africanism or Communism? Soon Shakur, too, became a Black radical, just as the civil rights momentum beget riots demanding an economic revolution, one that would take into account the intractable financial obstacles facing the Black underclass.
Instead, in 1968, Richard Nixon campaigned on something else: Black capitalism. Nixon promised “to get private enterprise into the ghetto and the ghetto into private enterprise,” but Keith’s father was convinced it was a red herring. By the time Nixon took office, the elder Keith was incarcerated for what he described as “a charge that they knew I didn’t commit.” After he got out, he saw that, as he had suspected, Black capitalism was not a real program but a “tactical political diversion,” as University of California Irvine law professor Mehrsa Baradaran writes in The Color of Money. Nixon created an Office of Minority Business Enterprise but did not fund it for two and a half years. Studies showed that 20 percent of grants went to white-owned firms using a person of color as a front.
Rejecting the pursuit of wealth, Keith’s father became a criminal defense attorney. Shakur worked in maternal and children’s health, and together they practiced community organizing and Rastafarianism.
Keith hated her childhood. She wasn’t allowed to watch cartoons, and after her father took a trip to Africa, he began dreading his hair and decided the family was going vegetarian. Her interest in business was a form of rebellion, a way of attaching herself to her mother’s parents, who still ate bacon and had once been the kind of people Keith wanted to be: “the socialite family, well-to-do”—the people her father disapprovingly called the “Black elites.” When she left for college, her parents divorced, and she felt free to do as she pleased: studying agricultural managerial economics, and later starting a clothing company and a youth orchestra, before deciding to package and sell her mother’s green drink recipe.
By 2007, Keith’s chlorophyll beverage business was taking off, and her godmother introduced her to a nephew, a charming Compton-born drug dealer turned medical dispensary owner named Virgil Grant. Grant was one of few Black people willing to take the risk of opening medical marijuana storefronts in Los Angeles. Despite popular conceptions of L.A. as a permissive pot paradise, commercial activity was never legal under the state’s 1996 medical marijuana law. Individuals could obtain a doctor’s recommendation to possess weed, but businesses were not allowed. Yet as the recession hit, the number of illegal pot shops in the city ballooned to over 800.
Grant and Keith teamed up on the cannabis-infused version of her chlorophyll drink, called Chronic Tonic. “I was on a good $10,000 a month, easily,” Keith recalled. She thought, “This is a lucrative-ass business”—not understanding that revenue was high because the operation was illicit: no taxes, no regulations, no fees to get licensed. She knew cannabis wasn’t quite legal, though, and when she signed a deal with Whole Foods, she gave up Chronic Tonic to protect her legitimate business.
It was good timing. The following year, Grant got hit with a federal charge of conspiracy to distribute marijuana. For years, he stewed in prison. By 2015, there were around 1,700 illegal dispensaries in L.A. The LAPD and U.S. Drug Enforcement Administration would raid the pot shops, seizing cash and product, but hardly anyone was ever incarcerated for selling medical weed, as Grant had been. When he got out, Grant became a prominent advocate for legalization, using his story of discrimination to gain the trust of Wesson, then the City Council president, and rallying illicit weed operators behind a ballot initiative that outlined a plan for social equity.
Keith didn’t know what had become of Grant when she showed up to her first cannabis networking event in March 2017, so she was surprised to see he was one of the featured speakers. “It was at that moment, I just knew, this is it,” she said. “I’m catching a wave right now.”
When the first states began to legalize cannabis, there was no such thing as social equity. A 2009 memo funded by the W.K. Kellogg Foundation and passed among marijuana policy activists advised: “DON’T lodge race, racism or racial disparities at the top of a communications.” Their research showed most Americans didn’t believe in systemic racism.
In 2013, Colorado and Washington were trying to figure out how to implement the first-of-their-kind recreational marijuana ballot initiatives that voters had passed the previous November. The goal was to get the DEA to leave legal cannabis alone, even though pot remains, to this day, illegal at the federal level. State and federal officials came up with a compromise, outlined in a Department of Justice memo: If the states created “strong and effective regulatory and enforcement systems” and did their best to keep out “criminal enterprises,” the DEA would lay off.
To exclude traffickers, the states set up complex and costly barriers to entry for the licensed marijuana industry, including precluding anyone with a drug felony from working at or owning a pot company. But all this did was keep out people who had been caught—disproportionately Black people—while anyone else with illicit cannabis experience was in demand.
Every state or municipality has its own idiosyncratic method of deciding who gets a marijuana business license, typically requiring a point-based evaluation of written responses, perhaps $2 million in startup capital, vague attributes such as “character,” and floor plans and zoning clearance for shops that don’t yet exist.
The public tends to distinguish among the places that have legalized pot by asking whether medical or recreational use is allowed, but the more salient question is: How many licenses are there, and how are they given out? Both Minnesota and Oklahoma have medical cannabis, for example, but in Oklahoma there are several thousand licensed marijuana companies, while Minnesota only has two.
But the legal cannabis market is never, in fact, the entire cannabis market. Today, even in the state with the strongest legal industry, Colorado, an estimated 30 percent of weed is still grown and sold illicitly, which means licensed businesses are competing not only with one another, but also with people who don’t pay taxes or install wheelchair-accessible entrances—and don’t have to pass those extra costs on to consumers.
So a cannabis license is not a ticket to automatic riches: A license is just the first hurdle. And the more money needed to get a license, acquire property, pay taxes, and adhere to regulations, the whiter the legal cannabis industry becomes. Bank loans are not an option, as most banks refuse to do business with an industry breaking federal law. State-licensed businesses rely mostly on private capital, something Black people often don’t have access to; in the nearly 160 years after the Emancipation Proclamation, Black families have gone from collectively controlling 0.5 percent of the nation’s wealth to controlling less than 2 percent.
The first attempt to increase the number of Black-owned cannabis shops came in the wake of the police shooting of 18-year-old Michael Brown in Ferguson. Attitudes toward systemic racism were beginning to change. In 2015, Maryland’s Legislative Black Caucus designed a medical cannabis licensing system that prioritized Black-owned businesses, but the initiative ran afoul of affirmative action case law, which does not allow race-based preference without documented discrimination. The Maryland attorney general, and later a judge in Ohio reviewing a similar law, asserted that disparities in cannabis arrests did not amount to disparities in the legal cannabis business, and struck down provisions meant to help Black entrepreneurs.
Then in 2016, Oakland designed the first program that used proxies for race to get around affirmative action. The plan was to offer half of the city’s licenses to people with a cannabis conviction, or who lived in areas with higher rates of cannabis arrests. Oakland also prioritized “general” applicants who “incubated” a social equity applicant by offering business advice and free operating space.
As more places chose to legalize, interest in social equity spread. Some programs include veterans and women, or people whose family members have been arrested for weed. Others ask for tax returns to show applicants are low-income. In 2019, Massachusetts reserved all delivery licenses for social equity applicants for three years. That same year, Evanston, Illinois, announced tax revenue from cannabis would be paid directly to select Black residents.
By the time George Floyd was murdered in May 2020, race was at the forefront of cannabis policy debates. Virginia passed a program in 2021 that will prioritize graduates of historically Black colleges and universities. New York pledged in 2021 that half of all cannabis business licenses would be given to equity applicants. Finally, it seemed, governments everywhere were going to fix something that felt very wrong to a lot of people for a long time.
At first, Keith saw her connection to Grant as divinely ordained. He charged some people thousands of dollars for his advice, but he eventually helped Keith for free, treating her like family and introducing her to key people.
Then, a year after she and her cousin resolved to join the green rush, Keith got her first inkling that Los Angeles might not deliver on its promises. The city announced that 191 pot shops—10 percent of the city’s existing illicit dispensaries—could become legal before the social equity program even began, thanks to a deal cut between a portion of existing medical shops and the city. Keith was caught off guard, but Grant was not: He owned three priority shops.
The grandfathering of medical shops has become one of the primary factors undermining social equity across the United States. Once a medical marijuana market opens to recreational use, the existing medical businesses often get dibs on licenses to sell pot to the public. With consumers eager to buy legal bud and politicians hungry for tax revenue, converting existing businesses—which already have weed on hand—seems like a no-brainer.
But once medical businesses gain permission to sell to anyone, they have an incentive to impede any additional businesses joining the market, which in many places means bogging down social equity. “If you allow the medical industry to start first, there is a perverse profit incentive for them to delay equity programs from happening, because it’s tremendous competition coming in,” explained Jason Ortiz, a cannabis advocate in Connecticut. “So many parts of the process are corrupted by that one thing. They’re making money, and they can use that money to push the program back.”
Existing medical marijuana businesses tend to be wealthier and whiter than the general population, having been licensed based on criteria developed between 2005 and 2015 or having survived waves of law enforcement raids and prosecutions. After Illinois passed adult-use legalization in 2019, medical shops were allowed to open to recreational customers before social equity got underway. A 2020 state report determined less than 2 percent of Illinois’s existing dispensary owners are Black or Latino. Three years after legalization, the state’s equity program has been mired in lawsuits, delays, and infighting; not a single social equity business has opened.
Grant was one of about six Black people in Los Angeles who owned priority dispensaries. But across a 16–square-mile stretch of South L.A., in the Black community where Keith’s parents and grandparents had moved in the 1970s, there were no priority shops—meaning that, when recreational sales began in California, those neighborhoods had no legal place to buy weed.
As adult-use legal sales approached, Keith noticed Grant and other equity advocates shifting their attention from talking about helping the community to paid consulting and developing their own businesses. Keith spent around four months working at a social equity incubator run by a Black woman with political connections and experience in getting government contracts. Then one day, an older Black man walked out of a meeting with her boss, shaking his head. He turned to Keith and said, “That’s a damn sharecropper deal!”
Keith realized, with a start, that she agreed, and quit the job. Recalling her father’s lifelong wariness about “the Black elite,” she started to consider how class divisions and political access were blurring the line between self-interest and community advocacy, exposing weaknesses in the “true partnership” among Black people that the City Council president had promised. “The people who are helping to design it are designing it so that they can get more extra stuff,” Keith said.
In Black on the Block, Northwestern University sociologist Mary Pattillo writes about the complicated, sometimes self-enriching role that Black advocates and elected officials come to play in city politics: as brokers “spanning the space between established centers of white economic and political power and the needs of a down but not out black neighborhood.” Pattillo calls these people “middlemen” and “middlewomen.”
“This incredible level of responsibility, my research shows that Black leaders really do take it to heart,” Pattillo told me. “They do the work because they want to improve the conditions for Black folks broadly, and then, you know, as with all politicians, you get in there, and you realize how dirty it is when the sausage gets made.”
Grant acknowledged the complexity of his role in pushing for both an equity program and priority licensing for the dispensaries he owns. “I worked my angles, too, and got what I got. I did mine for the industry. Not just for me personally, for all players,” he told me. “I did it for me, too, because I had three of them businesses, so I did that for me, too.”
Once L.A.’s priority dispensaries got approved, in the first months of 2018, Keith assumed the equity retail licenses would come next and would be processed just as quickly. Instead, the city didn’t fully fund the new department charged with managing licensing, and the time line for allowing social equity stores kept getting delayed.
Before allowing more pot shops to enter the market, Los Angeles shifted its attention to licensing the supply chain: weed growers and weed chocolate makers and weed distributors. According to city law, all of these businesses were supposed to be either owned by social equity applicants or incubating a social equity applicant by providing capital, operating space, and assistance.
Keith decided she would start a cannabis beverage company, similar to Chronic Tonic, and found an edibles company to incubate her. But as the due date for licensing applications approached in summer of 2018, the edibles company stopped replying to Keith’s emails. The due date came and went. Many businesses, including the edibles company, got licensed.
Four years later, the city has yet to check whether any of these businesses are following the social equity provisions of the law. “They have not enforced the social equity aspect of it yet,” confirmed Ryan Jennemann, founder of THC Design, which received 10 licenses in the supply chain round. Eventually, the city announced these companies could pay a fee instead of participating in social equity—but no one has ever come to collect that money. “They haven’t imposed it yet, because they just don’t have anything together there,” Jennemann said.
Keith was dumbfounded. She had no leverage to force these companies to follow the law. She began to see how she and other equity applicants were profoundly hindered by the exact economic and political inequalities that had prompted them to become equity applicants in the first place. Social equity pits people with very little wealth and clout against the plutocracy that runs the world, with billions of dollars at stake. It was never going to be a fair fight.
Starting any business costs money, meaning entrepreneurs like Keith must turn to incubators and investors to pay for things such as lawyers, security consultants, and rent—all before a single joint is sold. Keith watched investors screen dozens or hundreds of potential equity applicants at once, deciding in an opaque process through several rounds of interviews and trainings whom to fund and whom to abandon, leaving the applicants with little time to find another backer. Cannabis companies that incubate social equity applicants might provide loans at 12 to 17 percent interest rates, when the U.S. average is 3 to 7 percent; require the equity applicant to stock the incubating company’s product, purchased at locked-in rates above market value; or stipulate that the social equity applicant’s business can only ever be sold to the bigger company, for a predetermined amount. More cynical financiers might simply offer the equity applicant a $35,000 salary in exchange for total control over the business.
Some applicants embraced social equity as a form of passive income. Jahlil Stansell told me he felt good about lending his name to an investor who planned to list him as a 51 percent owner of a dispensary while only paying him 10 percent of the net profits, and even that only after the investor made back his initial outlay of $175,000.
“I wasn’t putting no money up, so it’s like I was just getting part of a business for nothing, just because I grew up in L.A., in the hood,” Stansell explained. According to the contract, he would be “a silent partner,” with “no voting rights” and no “control or influence over the day-to-day Cannabis Business operations.” Stansell felt he understood what he was getting into: “They was using Black people, because they know Black people don’t have the money and don’t have the knowledge.”
But Keith wanted to actually run and own her own business. That was the point, she thought, and the meaning of the word “equity.” She became determined to win a social equity dispensary license. Yet she felt she couldn’t trust any of the entities she would need to work with to make it happen: not the investors, not the incubators, and certainly not the city.
After the city declined to enforce the social equity provisions of the supply chain phase of licensing, Keith came to believe that politicians in Los Angeles were either incompetent or beholden to moneyed interests, whether through influence channels like lobbying and campaign donations or through more nefarious means. She learned that city law limited the number of pot shops in every district but allowed City Council members the authority to approve additional shops. Keith said she heard other weed entrepreneurs bragging that one City Council member or another had promised them a retail license through this provision, essentially as a political favor. These were not isolated observations. In the summer of 2020, U.S. Attorney Nick Hanna described “rampant corruption at City Hall” in L.A. as part of an FBI investigation that brought down two City Council members—one of whom, according to a lawsuit filed by a former staffer, “was engaged in conduct designed to extort applicants for cannabis permits within his Council District.” (The city settled the lawsuit for $150,000.)
Keith decided she needed to take matters into her own hands. She organized protests. She collected examples of predatory contracts, convincing the city to tighten its rules. She developed contacts with local radio, TV, and newspapers. She gathered social equity applicants to pool information and resources in a back room at an illegal dispensary in a Black neighborhood.
For months, Keith and a friend drove around looking for available properties with the right zoning where equity applicants could open pot shops, and then pairing those properties with people she knew. In this way, she met an investor who offered to bankroll both the rent of a retail space and her activism, in the hopes that her leadership would bring flattering press and help the business.
Now Keith, too, had become a middlewoman. But unlike the Black leaders she had observed, Keith didn’t ask other equity applicants for money or a portion of people’s businesses.
Instead, for the first time in years, she began speaking with her father on the phone every day, to consult on political strategy. It was the elder Keith who suggested signs at one protest read WE SHOULD #OwnOurOwn COMMUNITIES, a reference to Stokely Carmichael’s 1966 observation that “Everybody owns our own neighborhoods except us.” Somehow, in her attempt to get rich, she started to appreciate why her parents had chosen a different path. She began to see her childhood in a more favorable light.
In the summer of 2019, a year and a half after the priority dispensaries became licensed, L.A. finally allowed social equity applicants to register for the chance to get a retail license. Keith and her network of community organizers helped about 250 of the 1,629 people who became verified as having low-income status and a cannabis arrest or residency in a disproportionately policed neighborhood. By now, Keith and her investor had spent $150,000 renting the property where they hoped to operate. Several equity applicants told me they similarly had to spend or borrow six figures to secure a space in order to meet the application’s property requirement, all before knowing who would win the opportunity to open a business.
In the final days before applications became available, Keith’s investor told her many of the provisions outlined in their memorandum of understanding were no longer possible. “He added all that lopsided language where they get all the benefit, but it isn’t reciprocated on your side,” she said. “That’s the game, right?” Though she tried to push back where she could, Keith had little choice but to sign the contract.
At 10 a.m. on September 3, 2019, the city opened online applications for 100 social equity retail licenses, to be chosen on a first-come, first-served basis. After years of work, getting a license was going to come down to a race to submit applications. Keith’s investor was handling her application, but for the members of the community whom she worked with, she rented MacBooks, hired data entry professionals who could type 90 words per minute, and, for faster internet, convinced a cannabis company to lend her group a room in its downtown skyscraper offices.
She was worried about the system crashing, or bots filing applications in record time, since the website’s log-in had no CAPTCHA test, so she made sure that every MacBook was screen recording.
Then, 10 minutes before the city was supposed to begin accepting applications, one of the data entry professionals was checking the password of the applicant she was representing, Jumane Redway-Upshur, and found she was able to log in to the system early. She submitted his application at 9:51 a.m. “The room blew up,” Keith recalled. “It was like chaos.”
By 10:01 a.m., 547 applicants across the city had accessed the system. By 10:05 a.m., 437 applications were submitted. “Every second mattered,” recalled Adam Spiker, a cannabis lobbyist. After the first hour, there were over 650 complete applications for 100 spots.
Weeks later, when the city began releasing information about who had been fast enough to win a license, Redway-Upshur was listed as number one. Only 18 of the 100 social equity licensees were Black. Of those 18, 13 were affiliated with a Black investor who had employed a son of Wesson, the City Council president. Keith sent the screencast of Redway-Upshur’s application being submitted early to someone who worked with Grant, who posted the video to social media. Rumors and memes spread. Applicants turned on one another.
To quell the backlash, the city paused the equity program and conducted an audit, which found over 200 applicants had gotten into the system early. Outraged, Keith and a few others filed a lawsuit. The city proposed a settlement during the summer 2020 protests; suddenly, local leaders didn’t want to be seen as standing in the way of Black-owned businesses, and offered to license the next 100 applicants in line, a group that included Keith.
Now, Keith was accused of becoming exactly the kind of self-interested Black middlewoman that she had tried to distance herself from. “Kika’s about herself, and building herself up, not about putting in the work,” Grant later told me. But the activists who initiated the lawsuit owed their lawyers over $50,000, and didn’t think it was feasible to get the city to agree to any more licenses. So they settled.
Almost two years later, the majority of those 200 social equity retail licensees have yet to open. Some lost their properties after having to pay rent without operating for several years and are now searching for sympathetic landlords with the right zoning. Some cannot proceed because their investors pulled out, frustrated with the city’s volatile time lines. Some are unwilling to move forward until they find their way out of deals they don’t consider fair.
Los Angeles attorney Mike Mancini is trying to help several equity applicants get out of their contracts, which he describes as “some of the most predatory investment deals I’ve ever seen.” He explained that some investors are violating the social equity requirements in the Los Angeles Municipal Code, but once a contract is signed, the burden is on the equity applicants to find the money necessary to buy their investors out or take them to court: “These investors are not stupid. They know the social equity applicants are the perfect group to take advantage of because they can’t afford to do anything about it.”
Across the country, social equity licensing is often just as contentious and litigious as it has been in Los Angeles. Even when local governments provide scrupulous oversight, the investors are often two steps ahead, developing ways to shortchange the equity applicant. And of course, most governments do not provide scrupulous oversight. A cannabis policy consultant told me that he often finds himself explaining to elected officials why their equity program will prompt lawsuits that will stop it from working, only for the politicians to respond that they don’t care if the program doesn’t work, because “Our messaging is the right messaging.”
Many now see social equity as part of a long line of America’s nominal attempts to achieve justice and parity. “They did what they always did: create the illusion of inclusion,” said one applicant who wasn’t fast enough to get one of L.A.’s 200 social equity retail licenses. He told me he has no intention of closing his illegal dispensary: “I’mma trap till the wheels fall off. I ain’t asking for no permission to survive.”
Hundreds of illicit dispensaries and delivery services remain in Los Angeles, outnumbering legal shops. Some experts believe around 80 percent of California’s cannabis market is illegal and unlicensed. The city is slated to eventually give out more social equity retail licenses. But Nicole Elliott, director of the California Department of Cannabis Control, said she is concerned about how the artificial scarcity of licenses is affecting the people whom equity is meant to help. “If you have so many shops and demand for all of those shops,” she said, “then I think that merits the discussion at the L.A. level about whether or not that’s appropriate.”
Four years after she began pursuing social equity, Keith’s dispensary finally opened in August 2021. The space has a warm yellow ceiling, exposed brick, and a sign reading HARVEST A LEGACY. It is a family affair, just as she imagined: One of her daughters manages marketing and brand relations.
But at some point in the past few years, Keith stopped caring about the promise of generational wealth. It’s not about making money for herself and her family anymore. She is dismayed with how social equity has turned out, and determined to stop other cities and states from making the same mistakes. She recently turned 50, and now sees herself as the culmination of all that her parents and grandparents and great-great-grandparents were working toward.
“Out here, Black people be like, ‘If I was in slavery times, I would have done this, that, and the other,’” she told me. She thinks about this a lot. Even if her business fails, even if her friends never escape their predatory contracts, even if the feds legalize and corporations take over the marijuana business, undoing everything that social equity has sought to accomplish, she just wants to know that at least she tried. “If nothing else,” she said, “50 years from now, it could be said that people fought against being shut out of this industry.”
