The Green Rush Is a Lie: Hard Truths From 3 Years as a Cannabis Equity Licensee
Supernova Women Vice President Whitney Beatty shares her experience as a social equity dispensary owner in Los Angeles, CA
I was ecstatic when I became a licensed cannabis operator. For years, we were told that the cannabis industry was a golden ticket to generational wealth, particularly for Black and Brown communities that bore the brunt of the war on drugs. Social equity programs were supposed to right those wrongs, creating pathways into an industry that had criminalized us. But for many of us pursuing social equity licenses, the reality has been something far harsher.
Here’s the truth: the “Green Rush” is a big fat lie.
I feel better getting that off my chest. The cannabis industry today is in crisis. Even the largest, most well-capitalized operators are struggling to survive. For small, independent dispensaries like mine, the challenges are overwhelming. Without significant financial runway, success feels almost impossible.
Permitting delays drag on for months—sometimes years—while costs like property holding fees, rent, and buildouts mount. These expenses don’t just threaten the business—they threaten you. Many of us are left with destroyed personal credit long before we can even open our doors. And even for those who manage to survive the launch phase, profitability is often two to three years away—if it’s attainable at all.
Raising money is another massive hurdle. This isn’t a case of poor financial management; it’s hard to mismanage a budget that barely exists in the first place. Banks won’t touch us, and venture capital tends to flow toward the same well-connected, well-resourced players who already dominate the space. Without startup capital or a financial cushion, it’s impossible to compete with larger operators who can lower prices until we’re forced out of business. They have the resources to hire lobbyists, ensuring regulations work in their favor, while small operators are left fighting for scraps.
And then there are the licensing fees. Even if you manage to scrape together enough to launch, excessive and ever-increasing licensing fees and audits, coupled with punitive late fees, eat away at what little profits operators are able to make. For many of us, it feels like the system is designed to keep us in the red.
Then there’s the relentless tax burden. Thanks to the infamous 280E provision, cannabis businesses are prohibited from deducting ordinary business expenses. That means we’re taxed on gross revenue, not net income. For mid-sized operators, this is devastating; for small operators, it often doesn’t matter because they’re not making a profit anyway.
But beyond these challenges, the industry itself has to get honest. Too many executives parade success in the press while being half a million dollars behind in taxes. The real stories—hidden in the comments, in closed-door conversations, and in the staggering number of business closures—tell a different tale. Legacy businesses are shutting down, owners are drowning in debt, and liens are stacking up. Word on the street is that the number of canceled, relinquished, or non-operational licenses exceeds the active ones by over 2,000. In California alone, 10,000 businesses have closed while only 8,000 remain open—and that number is dropping by more than 300 a month.
The industry is failing. Full stop.
Meanwhile, we watch operators flee from highly regulated cannabis into the free-for-all that intoxicating hemp provides. Why? Minimal regulation, interstate commerce, and increased access in places consumers already frequent—convenience stores, gas stations, even DoorDash. All because of a different designation for the same damn plant.
So how do we fight back? How do we preserve and protect social equity in cannabis while the industry crumbles? Unlike other states, California’s equity programs are not race-based, putting us in a slightly better position—but that’s not enough. The rallying cry must be clear: cannabis business is small business. Despite what MSOs want politicians to believe, 80% of cannabis businesses make less than $10 million a year.
That means solutions must be tailored to small operators. On the municipal level, we need technical assistance and mentorship for budding entrepreneurs. We need ecosystems that support group buying and collective leveraging of resources. We need space for the cottage industry to thrive under decreased regulation. And speaking of regulation, it must evolve with the industry. Laws may be rigid, but regulations should be malleable.
We should also be looking at taxation models that work. In New Jersey, for example, the local cannabis tax is capped at 2%, paired with a 6.625% sales tax. Compare that to Los Angeles, where the 37% tax burden drives consumers straight into the illicit market. Perhaps that’s why New Jersey’s cannabis market surpassed $1 billion in sales in 2024, marking a nearly 25% increase from the previous year.
Meanwhile, in California, legal cannabis sales hit $4 billion in 2020, while illegal sales were estimated to exceed $8 billion. The number of licensed cannabis growers and brands in California has plummeted by over 70% since legalization took effect.
This is the opposite of what legalization was supposed to achieve. Safe access to cannabis, especially for medical patients, is in jeopardy. A recent study found that 44% of cannabis consumers reported reducing or stopping their use of pharmaceutical drugs. That’s a public health issue—one we can’t afford to ignore.
Advocacy must also play a role. Organizations like the National Cannabis Industry Association (NCIA) and the Minority Cannabis Business Association (MCBA) fight for equity on a national level. Meanwhile, specialized groups like Origins Council, built upon the foundational work and approach of Mendocino Appellations Project and the CalGrowers Appellations Committee, pursue the development of legal geographic indication systems and standards-based appellation of origin designations for cannabis, which will be a powerful asset when the opportunity for interstate commerce arrives. My organization, Supernova Women, provides data-driven industry insights and thought leadership that offers support for local policy reform.
Newer organizations, like the Black Los Angeles Cannabis Council (BLACC), give Black operators a space to collaborate on economic development and advocacy. Another emerging force is Aligned Cannabis, a collective working toward a group-led effort to replace California’s failing Prop 64.
Let’s be clear: the failure of social equity operators isn’t about social equity programs themselves—it’s about the broader structural inequities within cannabis. But we can’t afford to let this industry collapse under the weight of poor policy and unchecked corporate greed.
To my fellow social equity applicants: this is not an easy road, but I urge you to meet this moment. Understand the challenges, strategize, innovate, and build partnerships. And to policymakers, regulators, and consumers: if we truly care about equity in cannabis, the time to act is now. We need regulatory reform, enforcement against illicit operators, and policies that support small businesses.
This isn’t just about cannabis. This is about justice, economic opportunity, and the future of our communities. If we don’t fight now, we risk losing everything equity was supposed to stand for. The question is: are we willing to let that happen?