California cannabis retailers with social equity licenses have active license rates equal to or higher than other storefront retailers, according to a new analysis.
Sacramento, California-based consultancy Capitol Compliance Management analyzed all 1,653 storefront retail licenses in the California Department of Cannabis Control registry. Of those, 281 licenses were labeled as equity retailers, representing about 17% of the total.
How do social equity cannabis licenses compare over time?
The analysis of data pulled on Sept. 25 found that 81% of equity-labeled licenses were active, compared with 76% of licenses without the label.
Because equity licenses were younger on average, Capitol Compliance Management also compared licenses issued in the same year. Equity licenses had higher active rates than licenses without the label in each year from 2019 through 2022. The rates were slightly lower for equity licenses in 2023, equal in 2024 and lower again in 2025, at 91% compared with 97% for nonequity licenses.
The 2019 group showed a clear gap. Of 52 equity licenses issued that year, 41 remained active, or about 79%. Among nonequity licenses issued in 2019, 369 of 559 were active, or about 66%.
Of the 281 equity licenses, 156 were in Los Angeles County, accounting for more than half the statewide total. Sacramento County had 26, and San Francisco had 19. The counts include inactive licenses and don’t measure how many shops are open.
“What stood out to me was how many of these older equity licenses were still active,” report author Kevin McCarty, Capitol Compliance Management’s director of licensing and compliance, told the Law Review.
“That doesn’t tell us everything about how the businesses are doing, but it gives us a good reason to question the idea that equity retailers are less likely to stay licensed.”
McCarty is listed as an owner on two equity-labeled licenses in the dataset, according to the report’s disclosure.
What doesn’t the analysis reveal about social equity cannabis businesses?
Active license status doesn’t reflect a business’s sales, profit, debt or ownership changes, according to the report.
Registry records also may miss equity businesses that don’t have the state label, so the findings apply only to the licenses identified in the study.
