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Within shouting distance of the Oakland A\u2019s Coliseum and the newly vacant home of the Golden State Warriors sits a row of small greenhouses in a parking lot. The greenhouses are supposed to serve as cannabis grows, set up with fully automated cultivation systems in the 1,200 square foot space. But when Charles Byrd, a semi-retired family man with salt-and-pepper hair who grew up in San Francisco, shows me the small greenhouse that his nephew Jahful Price will soon start growing in, there\u2019s no cannabis to be found.<\/p>\n
This particular row of greenhouses belongs to\u00a0NUG<\/a>, an Oakland-based cannabis company that has been around since 2014. Under Oakland\u2019s cannabis equity program \u2014 the first program of its kind in the world \u2014 NUG is an \u201cincubator,\u201d agreeing to give rent-free space and security to people who qualify as equity applicants. Byrd and Price, together with Byrd\u2019s sister, hold an equity permit for their cannabis cultivation and delivery company\u00a0Cannabis On Fire<\/a>. The uncle and nephew duo are here at the East Oakland growing complex on a blustery spring day to explain what it has been like to participate in the equity program.<\/p>\n The space itself is shouting with symbolism about the consequences of racism and an equity program that has been slow to get off the ground. In its Oakland complex, NUG has about 30,000 square feet of its own cultivation space, spread across a few buildings. Its rooms are filled with state-of-the-art equipment and rows of frosty cannabis plants. Out in the parking lot, the greenhouses NUG has built for its equity partners are empty, save for construction equipment.<\/p>\n \u201cIt\u2019s been a long road,\u201d says Byrd. \u201cWhen we first started, we thought we\u2019d be growing by January 2018. Here we are, a year and three months later, and we\u2019re still another three or four months away from growing.\u201d<\/p>\n After two years, the world\u2019s first cannabis equity program is doing\u2026 all right. Since the spring of 2017, the City of Oakland, California has been trying to reverse the centuries of racism that have corrupted \u2014 as indefatigable original sins tend to do \u2014 the newly regulated cannabis industry. It has been slow work, like sweeping back crashing waves.<\/p>\n In two turbulent years, the City of Oakland has approved 572 temporary licenses and 24 permanent licenses to people who qualify for Oakland\u2019s \u201cCannabis Equity Program,\u201d according to the city\u2019s most recent data from March 2019.\u00a0In order to qualify for the equity program<\/a>, applicants must be residents that earn less than 80% of the city\u2019s median income. They also must have lived for 10 of the last 20 years in one of the city\u2019s neighborhoods that police have disproportionately targeted or been convicted for a cannabis crime in Oakland after 1996.<\/p>\n In a promising turnout, the number of applications for the equity program has steadily climbed since 2017. The number of applications for program incubators has also increased, up to 343.<\/p>\n But Oakland\u2019s cannabis equity program has also been plagued by delays: delays with fire department inspections, delays with issuing licenses, delays with the loan program that provides zero-interest loans to equity permit holders. And these delays have been costly, as they have only made it more difficult for equity applicants to compete in the developing legal cannabis market.<\/p>\n \u201cYou have to be patient. We\u2019re going to be okay, we have strong partners,\u201d Byrd says. \u201cIn our family, we don\u2019t own any real estate, so we don\u2019t have many assets to pass along. In order to get our piece of the American pie, this is our family\u2019s once-in-a-lifetime opportunity to be poor and to make it.\u201d<\/p>\n The City of Oakland doesn\u2019t keep data on how the equity applicants are faring compared to the general applicants, so it\u2019s hard to tell exactly how large the racial disparity currently is in the city\u2019s cannabis industry.<\/p>\n Greg Minor, the city administrator who oversees the cannabis equity program, says that he believes the cannabis companies that are doing well in Oakland today are the ones who got set up before adult-use legalization passed (under medical marijuana laws that had no equity considerations) and the ones who have institutional capital (which is\u00a0fraught<\/a>\u00a0with racist ramifications).<\/p>\n \u201cNothing happens in a vacuum,\u201d says Minor. \u201cThere are a multitude of forces of change operating in Oakland in the moment,\u201d he says, citing the\u00a0rising income inequality<\/a>\u00a0and\u00a0gentrification<\/a>\u00a0booming in the city. \u201cThis is influencing who is succeeding today in the cannabis industry.\u201d<\/p>\n Yes, Oakland today is certainly not a vacuum. In the stark contrast between NUG\u2019s crowded grow rooms and Cannabis On Fire\u2019s still-empty little greenhouse, there is a harsh reminder of how elusive true equity remains, and why it is so important to continue its pursuit.<\/p>\n Oakland is a small city, nicknamed \u201cThe Town\u201d in opposition to San Francisco\u2019s \u201cThe City.\u201d Just about half a million residents live tucked between the city\u2019s marshland and hillside. Thanks to activists \u2014 from\u00a0the Black Panthers<\/a>\u00a0to resident Alicia Garza\u2019s\u00a0co-founding of the Black Lives Matter movement<\/a>\u00a0\u2014 the city\u2019s population has routinely punched above its weight when it comes to leading the fight for racial justice. The city government has often followed its populace\u2019s progressive vision.<\/p>\n In anticipation of California\u2019s vote to legalize adult-use marijuana in 2016, Oakland city officials commissioned a study on race and cannabis in 2015, laying the groundwork for building racial justice measures \u2014 such as the first-of-its-kind equity program \u2014 into the cannabis legalization project.<\/p>\n Since Oakland began building its equity program, the conversation around cannabis legalization has increasingly become focused on the intersection between race and policy; on reparations, on expungements, on the role governments can play in giving a leg up to those it has historically pushed down. (In Oakland, for example,\u00a0an analysis<\/a>\u00a0from the city found that, from 1995 to 2015, 80% of cannabis arrests were of black people, who make up only 30% of the city\u2019s population.)<\/p>\n Since 2017, cities such as\u00a0San Francisco<\/a>,\u00a0Los Angeles<\/a>\u00a0and\u00a0Sacramento<\/a>\u00a0built their own cannabis equity programs. The entire state of California\u00a0passed a law<\/a>\u00a0to create a state-wide cannabis equity program, with input from Oakland officials.\u00a0So did Massachusetts<\/a>. Lawmakers and activists pushing for legalization in states\u00a0such as New York<\/a>\u00a0and\u00a0New Jersey<\/a>\u00a0have made equity a key point of consideration. In June 2019, the Illinois legislature\u00a0voted to legalize cannabis<\/a>\u00a0with a law that included a state-wide cannabis equity program, making it the first state to create such a program from the outset.<\/p>\n So, what can other jurisdictions learn from Oakland?<\/p>\n \u201cOrganizations move in the direction of the questions they ask,\u201d says Minor. \u201cWhen other states are considering cannabis legalization, they should be asking questions about who is going to benefit from legalization, about who has suffered from prohibition, and about what the city can do.\u201d \u00a0<\/p>\n The biggest win, in Byrd\u2019s opinion, is Oakland\u2019s equity loan program. Despite the fact it has been slow in the roll out, the program is now giving out zero-interest loans to equity permit holders, up to $100,000. As of March 2019, 15 of the 44 of the submitted loan applications have been funded and five have been approved.<\/p>\n \u201cWhere else can you qualify for a $100,000 loan where there isn\u2019t a credit check? I think the city got that right,\u201d Byrd says. \u201cIf they\u2019d done a background check, we wouldn\u2019t have qualified for the loan. Everyone who qualifies for the equity program is going to have bad credit.\u201d<\/p>\n But in terms of where the city can improve, Minor is quick to admit that there are tweaks that need to happen.<\/p>\n For one, the city\u2019s incentives to support equity applicants have not been effective across the board. For example, Oakland\u2019s plan for equity cultivators is to match them with incubators that provide 1,000 square feet of space, rent-free for at least three years. However, as California\u2019s market matures and cannabis grows move onto\u00a0massive scale operations<\/a>\u00a0in the Central Valley, that is nowhere near enough space to build a profitable company.<\/p>\n \u201cFrom the point of view of the cost of operations and the taxes, 1,000 square feet is just not big enough to justify the amount of money you\u2019re putting in to make it operational,\u201d Byrd says. Given this reality, Cannabis On Fire is working on building out their delivery business, which requires far less upfront investment money.<\/p>\n This choice reflects a trend playing out across the city. In a report sent to the city\u2019s finance committee in April, Minor wrote: \u201cDelivery and distribution operations have been the most common cannabis business types, particularly among equity applicants. This is not surprising considering these are the least capital-intensive operations and they generally require far less to comply with building and fire codes than cultivation and manufacturing operations. This trend is significant, as this signals that there is a need to provide additional assistance to equity applicants interested in producing products so that they can create brands and develop more substantial wealth-building opportunities.\u201d<\/p>\n But when it comes to creating brands, there\u2019s been another significant hurdle for equity cannabis brands: getting Oakland customers to buy their product.<\/p>\n \u201cWe\u2019ve really struggled conveying to consumers what sets the equity partners apart,\u201d says Ted Whitney, director of sales for NUG. \u201cYou have maybe 10 seconds to get someone\u2019s attention in a dispensary, and it\u2019s just not proving to be enough time. We\u2019re trying to find a more concise way to get the info out there about letting people know what they\u2019re supporting when they\u2019re buying from an equity partner.\u201d<\/p>\n Some dispensaries in San Francisco have set aside shelves just for equity products and products from women-owned companies, but there are no regulations in Oakland that require shelf space be set aside for equity products.<\/p>\n Oakland\u2019s equity program is also structured differently for dispensaries. The city has awarded 16 dispensary permits, eight to dispensaries that have been grandfathered in and eight to new establishments. Of those eight new permits, the city set aside four permits for equity applicants, which were chosen through a lottery system in February 2018. They also then awarded four other permits through a ranked application system, whereby equity applicants earned more points. Ultimately, six of the city\u2019s eight new dispensary permits went to equity applicants.<\/p>\n Only one of the equity applicants has opened their dispensary so far: Alphonso T. Blunt, Jr. His dispensary,\u00a0Blunts + Moore<\/a>, opened in November.<\/p>\n Dr. John Oram, NUG\u2019s CEO, came along with Byrd, Price and I to tour Cannabis On Fire\u2019s new greenhouse and brought his playful young dog along. While his dog bounded and barked with joy, Oram had the wan look of a man who wanted more to celebrate.<\/p>\n \u201cWorking with Charles [Byrd] and Jahful [Price] has been great, but, overall, the equity program and the cannabis business in California has been extremely challenging since regulations came on in 2018,\u201d Oram told me.<\/p>\n In Oram\u2019s view, understanding the shortcomings of the Oakland equity program requires understanding how difficult it has been for California to regulate its massive, legacy cannabis industry after the state voted to legalize adult-use cannabis in 2016.<\/p>\n \u201cI don\u2019t want to say no one predicted this, but no one admitted that California\u2019s market was going to constrict the way it has,\u201d he says. \u201cThe market from 2017 to 2018 restricted to a tenth of what it was, and then taxes went up to nearly 40%, and the illicit market has been reinvigorated. It\u2019s a perfect storm for making the cannabis industry very, very tough. It\u2019s been very tough for us to do the things we want to do as a company, like fund the equity program and get it going quickly.\u201d<\/p>\n Oram says NUG is doing what it can to go above the letter of Oakland\u2019s laws to provide more to its equity partners and wants to go even further. While the company is only required to provide 1,000 square feet of rent-free cultivation space and security to each of its equity partners, NUG has dedicated 9,000 square feet for a handful of equity greenhouses, which are set up as turn-key operations with a value of over $100,000, Oram and Byrd say.<\/p>\n They also provided trailers for separate office spaces and added trimming areas for the equity applicants. As Cannabis On Fire waits for its own cultivation set-up to get rolling, NUG has given them product to start packaging and selling under their own label. Cannabis On Fire will also send its own sales rep along with NUG\u2019s team to pitch to dispensaries, Byrd says.<\/p>\n The good news, Oram adds, is that other states should be able to set up cannabis equity programs without as many challenges as Oakland or other cities in California.<\/p>\n \u201cCalifornia is the largest cannabis market in the entire world, and it was even before legalization hit,\u201d he says. \u201cHow do you regulate something this big? Other states don\u2019t have this problem. They can start from the ground up and they can start the permitting and they don\u2019t have to worry about bringing existing people into compliance. They can just start the market. They can say, \u2018Here are the licenses and let\u2019s start the market.\u2019\u201d<\/p>\n Byrd says his advice to other cities and companies approaching equity is to be patient: \u201cWe learned that lesson the hard way.\u201d<\/p>\n TELL US,<\/strong>\u00a0do you know who grew your cannabis?<\/p>\n Originally published in Issue 38 of Cannabis Now.\u00a0LEARN MORE<\/a><\/em><\/p>\n The post Town Business: The Successes & Shortcomings of Oakland\u2019s Equity Program<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
Within shouting distance of the Oakland A\u2019s Coliseum and the newly vacant home of the Golden State Warriors sits a row of small greenhouses in a parking lot. The greenhouses are supposed to serve as cannabis grows, set up with fully automated cultivation systems in the 1,200 square foot space.Continue Reading<\/a><\/span><\/p>\n","protected":false},"author":32,"featured_media":38336,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4774,148,50,12525,85,12526,687,4552,8083,72,81,4166],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/38335"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=38335"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/38335\/revisions"}],"predecessor-version":[{"id":38337,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/38335\/revisions\/38337"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media\/38336"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=38335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=38335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=38335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/cannabiscultivatornews.com\/home\/wp-content\/uploads\/2019\/09\/Man-Inside-Greenhouse.jpg\")
Jahful Price is working as a cannabis cultivator for NUG.<\/figcaption><\/figure>\nA Piece of the American Pie<\/h4>\n
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<\/figure>\nThe Town Model<\/h4>\n
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Exporting Equity<\/h4>\n
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\nRead More: Town Business: The Successes & Shortcomings of Oakland\u2019s Equity Program<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"