Oakland and the cannabis equity program

Oakland and the cannabis equity program

The Oakland cannabis equity program is based on restoring African-American minorities after decades of injustice in relation to marijuana

I remember when Oakland was one of those places where the police thought twice before entering. And the most curious thing is that most of the crimes were related to the sale of marijuana. Fortunately the situation has changed a lot since the legalization.

Linda Grant, a 50 years old woman who grew up in Oakland remembers those days. She began smoking and selling marijuana when she was 11. She was expelled from the school in the eighth grade for selling joints. She got arrested four times.

However, now she continues selling marijuana…but legally. She was one of the first persons who signed up when the City of Oakland created a “Cannabis Equity Program” in 2017 in order to help people like her get in the legal weed industry.

Linda, who never could enjoy vacations when she was a criminal, is now preparing a trip to Hawaii with her six children. She now co-owns three cannabis-related businesses and can afford paying a family vacation, doing the same thing for what she was arrested before: selling cannabis.

She doesn’t call it cannabis now. She calls it weed, she sells weed and she smokes weed.

Being possible the legalization of recreational cannabis in New York, the governor, the lawmakers and advocates want to be sure the law would provide what they call “social equity”. This includes erasing criminal records for cannabis convictions and setting aside tax revenue from marijuana sales to invest in communities that have been severely affected by too many years of war on drugs, as it happened in Oakland.

Lawmakers want people from these communities to have a place into the legal cannabis industry. As Gov. Andrew M. Cuomo said earlier this year, not only the richest corporations will get profits from the new industry. And that is what Oakland is trying to do.

Oakland’s leaders have decided that at least half of all the permits for cannabis businesses in Oakland must go to people who have been victims of the war on drugs. This is the case of low-income Oakland residents who had either cannabis-related conviction since November 1996 or have been living for 10 years of the last 20 in some of the city’s places known for having the highest numbers of cannabis-related arrests.

And the other half of the permits are meant for common applicants. But there are differences among these applicants too. Those who agree to be an especial help for the equity applicants by providing them with at least 1,000 square feet rent-free for three years and security measures, have preference.

In the late 1990s and early 2000s, medical marijuana became legal in California although it was not well-regulated. At that time Oakland was named “Oaksterdam” because its downtown was full of unlicensed medical cannabis clubs.

In 2004, Oakland started a process to give permits to dispensaries. When California began to contemplate legalizing recreational cannabis, Oakland officials began to consider the impact of that situation for a city of 400,000 people.

And then, the city new Department of Race and Equity began to study the cannabis-related issues. The study, based on 20 years of arrest records, found out that even though African Americans represented about 30 percent of the population, the number of arrests among them was up to 90 percent.

It also found that Oakland’s African Americans unemployment rate was twice higher than the rate among whites and the level of poverty was up to seven times higher too.

While white people were selling and smoking cannabis and even getting rich with the activity, African Americans were being arrested.

A place in the industry

Ebele Ifedigbo is a woman who grew up in Colorado and was a business student at Yale University when Colorado, Washington and Oregon legalized recreational cannabis. She realized that the average cannabis industry leaders were mostly middle-aged white men.

Just before the legalization of recreational cannabis in California, Ifedigbo began visiting the state and networking, because she knew that market was going to be enormous. Ifedigbo met Lanese Martin, a woman who also had an MBA and much experience in community organizing. Ifedigbo went to California and founded Hood Incubator with Lanese Martin in Oakland in 2017.

Hood Incubator helps people to move across the city’s equity program and promote monthly sessions in order to connect entrepreneurs and investors.

It also has begun programs to help people of color to start cannabis businesses. The organization received 40 applicants as soon as it started operating. They accepted 15 that were given 100 hours of instruction in business planning and the laws and rules necessary for the cannabis industry.

The program begins to work

Almost two years into Oakland’s equity program, more than 800 persons have applied to take part in it.

Most applicants get into the delivery and distribution businesses. That is something that requires less amount of money to begin than a cultivation business or dispensaries.

The city administrator’s assistant in charge of the permitting process, has said that we need more time to know if Oakland’s equity program is working.

In order to help with the initial costs of the new businesses, Oakland began a $3 million, no-interest revolving loan program for equity participants, which is funded by tax revenues.

Oakland is also contemplating the possibility of providing with kitchen space for equity applicants who wish to get involved into edibles and the city also wants to find a way to highlight equity businesses so that clients can decide where to buy their weed.

Although cannabis is legal in California, there is an important black market operating. Many people put the blame on the high taxes that increase about a 35 percent to the cost of the products.

These high taxes are harming the equity applicants, said Lanese Martin, from Hood Incubator and who is on Oakland’s Cannabis Commission too. Precisely the people who are being taken out are the people the equity program wants to help.

Anyway, Oakland’s equity program can be considered as a model for other communities in California and other countries too.

Linda Grant, the Oakland resident with whom we started this article that is now legally selling cannabis after have been illegally selling it for so many years, wants those people like her to profit from the legal business.

Her advice for New York in case this state begins an equity program is avoiding taking the first offer that comes and to create cooperatives and partnerships to begin businesses. She recommends not being shy when it comes to seek for money and investors.

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