Modesto launches program to help residents with cannabis convictions start businesses
Modesto has launched a program to support residents who’ve been arrested or convicted of a cannabis-related crime in starting their own businesses.
The Modesto Cannabis Equity Program offers local grants and educational resources, including technical guidance and help with regulatory compliance and obtaining startup capital. Its goal is to lower barriers to entry into the regulated cannabis sector.
The program, supported mostly by $350,000 in state grants and loans, aims to help people who’ve had trouble getting regular loans.
“Our goal is to give an opportunity for those who have been affected by cannabis to learn how to open their own cannabis business now the correct way, post-2016,” said Community and Economic Development Director Jessica Hill. That November, California voters approved Proposition 64, which legalized recreational cannabis for adults 21 and older.
A consultant will conduct a series of educational workshops for those participating in the program. These workshops, slated to start June 22, will cover crucial aspects of the cannabis industry, including market dynamics, financial management, regulatory compliance and operational strategies.
“A lot of individuals have trouble actually securing credits to help open their business. This was there to assist with that,” Hill said.
The grants are for dispensaries and anyone who wants to cultivate, manufacture, deliver or distribute cannabis.
The city allows up to 10 cannabis dispensaries and has no limit on the number of non-dispensary businesses.
The Modesto City Council decided not to allow more dispensaries in the city because there are already eight approved. However, Hill said this could change in the future.
Eligibility for the program is contingent upon meeting three criteria:
Proof of cannabis-related arrest or conviction of the applicant or a family member
Residency in designated ZIP codes (95355, 95354, 95350, 95351) prior to Nov. 8, 2016
An income level below 80% of the area median income.
The ZIP codes were selected because the residents of those areas experienced the greatest historical impacts of cannabis prohibition. They are where people and neighborhoods were disproportionately affected by past cannabis criminalization policies in Modesto.
Applications opened May 6 and will close June 17. Go to www.modestogov.com/2848/Cannabis-Equity-Program.
The six-week workshop series will culminate in the opening of grant applications from July 29 to Aug. 16, with the intention of awarding about four grants up to $70,000 each.
Hill acknowledged that additional funding may be required to adequately support entrepreneurs in establishing businesses. “$70,000 won’t open a business for you,” she said.
Modesto’s history of cannabis criminalization
The Brenda Davis Law Group conducted a report examining how cannabis criminalization and the war on drugs affected Modesto’s communities. It highlights the significant impact of these policies, within the city.
In the early 1980s, Modesto served as a key hub for cannabis cultivation transportation. These routes were largely dominated by Mexican drug-trafficking organizations.
In 1999, the Central Valley received a designation as a High Intensity Drug Trafficking Area (HIDTA) by the White House Office of National Drug Control Policy. Before this, Modesto was primarily known for its agriculture industry.
The HIDTA designation enabled the region to access up to $2.5 million in annual federal funding, along with extra law enforcement resources to combat drug-related issues.
According to the report, the additional funds from HIDTA positioned Modesto to disproportionately target communities of color, resulting in lengthier and more severe sentences.
“Because of the increase[d] criminalization and the mandatory minimum. I was never given a second chance on life, when I was released back into [the] community,” read a quote from one resident interviewed for the report. “The cannabis possession was a felony, and it was my identity that I was unable to escape. Every application I had to identify and check the box that I was previously convicted.”
From 2000 to 2016, Modesto experienced a surge of over 300% in cannabis-related arrests.
Additionally, the study revealed that arrest rates for cannabis and other drugs were disproportionately higher in Hispanic and Black communities compared to the general population.
In Modesto, Black individuals were three times more likely to be arrested for cannabis-related offenses compared to their white counterparts. Despite comprising less than 5% of the city’s population, they accounted for 29% of such arrests.
Similarly, within Stanislaus County, although Black residents constituted only 3.4% of the population in 2016, they represented 11% of marijuana-related convictions between 1980 and 2016 — more than three times their population share.
“The negative impact of criminalization on housing, employment, family stability, and access to supportive services is ongoing. We learned from community feedback that it continues to be amplified among Black and Hispanic populations in the 95350, 95351, and 95355 zip codes,” read the report.
This story was originally published June 13, 2024 at 12:00 PM.
