The following is a summary of the Mendocino County Grand Jury’s analysis of the Cannabis Grant Equity program:
In 2020 the State of California created the Cannabis Equity Grant (CEG) program to assist those harmed by the war on drugs in transitioning to becoming licensed and legal growers. Mendocino County was chosen in 2020 to receive up to $6 million and distribute 80 percent of the funds to eligible applicants. The funds were to be used for direct cash grants, cannabis fee waivers, paying county fees with state grant funds, or providing technical business assistance such as how to create a budget, meet insurance and health and safety/environmental requirements.
In the beginning, the Mendocino County Cannabis Department (MCD) had no process in place for implementing a grant program and had limited staff with a permit program in ongoing turmoil. The MCD developed an application and made it available in February 2021. Yet as of May 25, 2022, only five applicants had received a check to implement projects. Issues arose almost immediately with income limits that took several months to resolve. Most grant applications were for capital improvement projects, which required budgets and project estimates. The MCD also undertook assessment of application project details to compare them with permit information, which required adjustments to applications. An entire contract review process within county departments was unknown to the MCD until late in the grant approval process, and a last-minute decision by County Counsel to implement even more requirements into approvals continues to delay payments. These challenges and others point to the lack of experience with distributing grant money to individuals, the effects of county/state disconnect on permitting, the ongoing effects of insufficient experienced planners and perhaps holdover mistrust of cannabis operators.
The applicants for these grants are those who were in the medical or illegal market, suffered for it, and are now attempting to grow their businesses for the future in a legal environment. This grant money will not stop the decline of cannabis revenue, guarantee success for recipients, or fix complicated permitting issues. But it will help those who are trying to stay in the industry until market forces stabilize. The MCD priority should be given to completing the first and second round applications along with meeting the state’s deadlines for distribution of funds.
Finally, in the attempts to be stringent with grant project reviews, the MCD highlighted an inherent conflict between holding cultivators to tight environmental requirements including power and building standards and getting cash in their hands to try to make farms both compliant and profitable. With the Local Jurisdiction Assistance Grant (LJAG) also awarded in 2021, the county will receive an additional $10 million of direct grant funds to distribute in the next several years. A fair and efficient grant review process will benefit not only CEG recipients but others in the cannabis industry in the county.
While this GJ did not review the permitting process, it is apparent from reviewing the ordinance, listening to multiple community discussions, and reviewing statistics, that the permitting program is in disarray.