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SEED Program – San Diego’s Cannabis Equity Grant Ignites Economic Transformation

by Roger Tower on August 30, 2023
SEED Program – San Diego’s Cannabis Equity Grant Ignites Economic Transformation

The city of San Diego is on the cusp of a groundbreaking economic revolution with its Social Equity in Economic Development (SEED) Program. Recent updates presented during a pivotal planning commission meeting on July 13th have unveiled a comprehensive set of amendments that promise to revolutionize the local cannabis industry while addressing key challenges and concerns.

This comprehensive analysis delves into the critical aspects of these SEED Program updates, highlighting their potential to cultivate a wealth of opportunities for social equity entrepreneurs and the community at large.

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Cannabis Social Equity and Economic Development (“SEED”) Program Updates to the San Diego Municipal Code and the Local Coastal Program proposed code changes include:

  1. Codifying Equity Assessment Chapter 7 SEED applicant and ownership criteria in the LDC;
  2. Allowing 36 additional cannabis outlets for eligible SEED applicants and establishing a Cannabis
    Outlet SEED Overlay Zone (“COSEED OZ”) that includes a broad range of commercial zones within
    Transit Priority Areas (“TPAs”);
  3. Reducing some of the strict sensitive use restrictions and distance requirements for new SEED
    cannabis outlets and production facilities and allowing SEED cannabis outlets as a Limited Use;
  4. Allowing SEED applicants to qualify for the program prior to securing a location;
  5. Waiving or reducing licensing, permitting and inspection fees for SEED applicants;
  6. Expanding cannabis outlet hours of operation in conformance with the state rules; and,
  7. Establishing a Cannabis SEED Incubator Program.

Cannabis SEED Workshop Details: Read the full report to the planning commission

A Glimpse of Progress: New Licenses in COSEED OZ

In a strategic move to stimulate equitable growth within the cannabis industry, the SEED Program introduces a significant update: the establishment of 36 new social equity cannabis outlets, also known as storefront retail dispensary licenses, within the innovative Cannabis Outlet SEED Overlay Zone (COSEED OZ). This strategic zone encompasses an array of commercial zones within Transit Priority Areas (TPAs), ensuring convenient access for a diverse range of residents.

Zoning for Equitability: COSEED OZ Breakdown

Recognizing the importance of balanced distribution, the SEED Program’s revised approach subdivides the permits into three distinct COSEED zones, each corresponding to specific regions of the city. Zone 1 caters to the northern segment of the city, Zone 2 is made up of the central zone of San Diego and Zone 3 encompasses the southern districts of the city. Each of these three zones will have a distribution of licenses relative to population to ensure there is no undue concentration of licenses in any one zone.

Reshaping Parameters: Green Zone Updates

Addressing concerns and unlocking new avenues for growth, the SEED Program introduces a transformative amendment involving the reconfiguration of Green Zone sensitive use regulations. Removing population-based city parks, churches, libraries, and residential care facilities as sensitive uses opens up an extensive array of real estate opportunities.

This bold step aligns with state requirements and substantially reduces barriers faced by SEED candidates under existing regulations. The updated approach to measuring distances between sensitive uses and cannabis establishments, reducing the distance to 600 feet, streamlines the application process.

Possibly No Real Estate Requirement

A truly progressive change designed to empower a wider spectrum of entrepreneurs involves a proposal to eliminate the upfront real estate requirement during the application phase.

By enabling operators to initiate the application process without immediate real estate investments, the SEED Program fosters inclusivity and encourages a diverse pool of aspiring entrepreneurs by lowering the entry cost to apply.

Time for Growth: Extended Hours

The SEED Program’s commitment to harmonization with state regulations extends to operating hours for cannabis outlets. This move stretches the operating window from 7:00 a.m. to 9:00 p.m., to the state-approved 6:00 a.m. to 10:00 p.m. This harmonization ensures consistency in operations and flexibility to cater to a broader range of customer preferences.

Lower Barriers to Entry: Reduced Application Fees

Recognizing the financial challenges inherent in entrepreneurship, particularly in burgeoning industries, San Diego intends to waive or reduce licensing, permitting, and inspection fees for SEED applicants. This proactive move underscores the city’s commitment to fostering accessibility and supporting a diverse spectrum of business ventures.

Central to the SEED Program’s ethos is its equity criteria, charting a course toward inclusivity and empowerment. An applicant must fulfill the following stipulations to qualify:

  1. A record of personal involvement or immediate family ties with a cannabis-related conviction or arrest since January 1, 1980, forms the first criterion.
  2. Meeting two out of five conditions below forms the second criterion:
    • Five years of cumulative residency in specified community plan areas between 1980 and 2016: Barrio Logan, Linda Vista, Southeastern San Diego, Encanto Neighborhoods, Greater Golden Hill, Greater North Park, City Heights, College Area, Eastern Area, or San Ysidro.
    • A household income below 80% of the Area Median Income in San Diego County, aligned with U.S. Department of Housing and Urban Development standards.
    • Experience of housing loss in San Diego through eviction, foreclosure, or subsidy cancellation after 1994.
    • Minimum five-year attendance at schools in San Diego County between 1971 and 2016.
    • Time spent within San Diego County’s foster care system between 1971 and 2016.

Empowerment Through Ownership: The Equity Tiers

Another pivotal facet of the SEED Program revolves around equity ownership, divided into two tiers:

A. SEED Equity Tier 1 Applicant: A cannabis business securing the Conditional Use Permit must be wholly owned by one or more equity applicants.

B. SEED Equity Tier 2 Applicant: For this tier, one or more SEED equity applicants should hold no less than a 51% equity share in the cannabis business attaining the Conditional Use Permit. Notably, SEED Cultivators can hold a maximum of 49% equity share in the licensed business.

Transfer of SEED Equity Cannabis Outlet Conditional Use Permits

The innovative SEED Program fosters growth through the transfer of permits. By facilitating the conditional use permit amendment process, permits can transition to different equity applicants. This transferability empowers Equity Applicant Tier 1 to ascend to Tier 2 or engage in the cannabis outlet sphere. It also paves the way for strategic mergers among Tier 1 Applicants, fortifying their market presence.

Mapping the Journey: Next Steps

Community engagement remains a cornerstone as the SEED Program evolves further, with input from the Land Use and Housing Committee playing a pivotal role. With an eye toward the future, the SEED Program is set to present a revised code package in the upcoming fall, introducing a draft ordinance for consideration by the City Council. This measured approach showcases San Diego’s dedication to nurturing a flourishing and inclusive cannabis ecosystem.

A Flourishing Landscape Ahead in San Diego

The SEED Program’s recent updates herald a paradigm shift toward social equity, economic vitality, and community empowerment. By strategically addressing concerns, introducing adaptable real estate requirements, and fostering a supportive regulatory environment, San Diego is primed to unleash a wave of possibilities within the cannabis industry.

As the city forges ahead, it’s clear that the SEED Program is not only a catalyst for local business growth but also a vehicle for community pride and ownership. With implementation on the horizon, aspiring entrepreneurs and community members can anticipate a future teeming with promise and potential, as San Diego’s SEED Program flourishes into a beacon of opportunity in the region.

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