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This month, Oakland’s City Council unanimously approved a program giving people with former marijuana convictions a leg-up when it comes to entering Oakland’s growing legal cannabis industry—a move the City Council sees as a step towards reparations for the drug wars that, in part, led to a boom in America’s prison population since the 1970s and targeted people of color.
While many states and districts actively ban people with past criminal convictions from participating as owners or employees in the country’s increasingly legal billion-dollar marijuana industry, Oakland’s new priority licenses program, called Oakland’s Equity Program, reserves half of its marijuana business licenses for the recently incarcerated and people living in neighborhood directly impacted by the drug war.
For the last 18 months, Oakland’s City Council has been in conversation with Oakland’s Cannabis Regulatory Commission about what regulation and licensing should look like on the municipal level. The city’s new regulations follow California Gov. Jerry Brown’s 2014 announcement that the state would begin regulating and licensing its medical marijuana industry—which previously operated in an unregulated legal grey-area—tracking the business from seed to sale. The legislation provides state licenses for business, but leaves the power and discretion of licensing mostly in the hands of municipalities.
City Council Member Desley Brooks, who did not respond to request for comment, added a last-minute equity amendment to the licensing regulation that could set a precedent for future cannabis regulation. The amendment states the opportunity and profits from Oakland’s medical marijuana business should be routed to the communities directly impacted and disproportionately affected by the drug wars, meaning communities in East Oakland comprised of people of color who deal with low-incomes, high unemployment rates, and, often, past criminal records.
In Oakland, arrests for marijuana possession or distribution have fallen since 2004, but African-American and Latinos still accounted for 85 percent of the city’s marijuana-arrests in 2011 and 2013. Of the city’s eight dispensaries, only one is black-owned.
“When you look at cannabis industry across nation,” Brooks told NBC Bay Area on Wednesday, “it’s dominated by people who are white and they make money. And the people who go to jail are black and brown. I wanted some parity. There needs to be equity in this industry.”
The language of the amendment specifically points to the connection between incarceration and high unemployment:
Above, a screenshot from City Council Member Desley Brooks’ amendment for Oakland’s Equity Program via
Joe DeVries, an Oakland city administrator and staff contact for the Cannabis Regulatory Commission, told VICE over the phone that Brooks brought up the issue of equity while drafting the license and regulation laws last summer. At the time, the commission had included a local hiring ordinance in the bill, but had not considered creating pathways to business ownership for people of color.
“We want to make sure the industry is open to everybody,” DeVries said. “It really is ironic and sick that for decades young men of color went to jail for something white men are now posed to make millions off.”
The Equity Program seeks to address this racial imbalance. Since California state law bans governmental programs from considering gender, race, or religion as eligibility criteria when it comes to issuing public contracts, education, and employment, the council used arrest data as proxies to create eligibility criteria for the equity program applicants.
They came up with six police beats that had the highest marijuana arrests in 2013, and decided that 50 percent of all legal marijuana business licenses are to be granted to someone who’s lived in one of these zones for at least two years, or has served time for a marijuana-related conviction that originated within the city of Oakland.
DeVries said the equity licenses’ had two goals: to put victims of the drug war at the front of the line when it came to reaping the benefits of California’s green rush, and to help bring already-established businesses out of the shadows and into compliance with the law.
Unlike the statewide licensing laws, the amendment explicitly bans the regulatory board from considering an applicant’s marijuana-related criminal background when granting licenses.
“We want to create a pipeline for jobs,” said DeVries, noting the police beats chosen also mapped to census tracts that were mostly low-income communities of color where unemployment is high.
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Matt Hummel, chairman of Oakland’s Cannabis Regulatory Commission, said it’s not just about legalizing pot.
“When drafting these ordinances, we have to consider how pot was used as a weapon against black people,” Hummel told Vice over the phone. “That’s a harder job.”
Hummel sees the equity permits aimed to get people of color and Oakland residents with criminal convictions into ownership roles in the marijuana industry as just the tip of the iceberg.
“Now that we have our marching orders, we’re inspired,” Hummel said. The city will be hammering out what the application process looks like over the next month and part of that conversation will focus on expanding who qualifies. “I know of at least 15 police beats that should be included.”
Lynne Lyman, state director of the Drug Policy Alliance’s California chapter, notes that Oakland’s Equity Program can serve as a model as other counties around the state figure out what their cannabis business licensing application system.
“Primarily, white men get places first,” Lyman told VICE. “Giving women and people of color priority when it comes to licensing helps level the playing field.”
Many local activists commend the Equity Program for taking the idea of reparations for the drug war seriously, but wish the legislation was more expansive.
“The idea and intent behind Oakland’s new regulation is incredible,” Endria Richardson, a legal fellow at Essie Justice Group, a Bay Area non-profit working with incarcerated people and their families, told VICE. She argues that that eligibility requirement for receiving cannabis business licenses should be expanded to include any conviction anywhere in California.
“The drug war meant you could be arrested for any crime anywhere in California,” Richardson said. “Not just for marijuana in your own community.”
DeVries said the task force is open to expanding eligibility criteria, but cautions that cannabis legislation and regulation is just one piece of a much larger puzzle.
“That’s getting into a much larger debate about restorative justice versus punitive justice,” DeVries said.
Alex Zavell, a policy analyst working with San Francisco firm Robert Raich, wonders if the amendment’s limited scope might have unintended negative consequences.
“We need to dispose of the notion that the bias was an unintended consequence of the war on drugs,” Zavell told VICE, referencing the recent reveal by a Nixon’s aide that the administration explicitly used drug laws to criminalize black power organizations and left-wing activists. “We have to be equally intentional when it comes to to legalization and ending prohibition.”
Right now, Zavell argues, the equity program provides no affirmative economic benefits.
“It just gives people’s licenses,” Zavell said. “Licenses that come with restrictions.”
The amendment requires that holders of the equity licenses maintain a 51 percent ownership in the business. Zavell warns that this restriction could prevent a business owner from offering up business shares in exchange for capital.
“The amendment does nothing to help the business succeed,” Zavell said. “It does nothing to give these businesses a leg-up.”
Zavell, along with the Bay Area collective Supernova, an advocacy organization representing people of color in the cannabis industry, wrote a letter with recommendations for how Equity Permits could include more positive economic benefits for equity license recipients. The letter argues the program does not address start-up capital, one of the biggest barriers to entry.
According to the subjects interviewed for this article, preparing a competitive application for a brick-and-mortar medical marijuana dispensary license can cost upwards of $8,000. Plus, applicants have to prove they have the money to keep the business running, which in Oakland could mean at least half a million dollars—in other words, directly excluding low-income communities in the city.
Hummel of the Cannabis Regulatory Commission countered that the Equity Program ideally would create partnerships between people with equity licenses and people seeking marijuana business licenses, but he’s also open to criticism.
“I want to make sure these licenses are help not a hindrance to the people who receive them,” Hummel said, noting the kinks in the amendment will be ironed out in the coming month. “I know our target is right, but are we doing it wrong?”
Supernova and Zavell’s recommendations include waiving the five percent city-tax imposed on cannabis businesses for businesses with an equity license.
“Such an exemption would provide a significant financial advantage for qualifying businesses,” the letter states, “addressing the barrier to entry created by capital constraints.”
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Across the Bay, Daisy Ozim is watching Oakland’s Equity Program with interest. The only person of color on the task force advising San Francisco’s cannabis regulations, she plans to recommend the city implement similar priority-licensing as Oakland for communities impacted by the drug wars.
“No policy is perfect, especially working with a broken system,” Ozim told VICE. “The equity licenses are a really good step.”
She said her task force is recommending community-benefit-agreements, similar to ones it worked out with the tech industry, where cannabis businesses are subject to route a certain percent of profits back into community programs.
Over the phone, Zavell ticked off other ideas for policies and programs that would lower barriers to entry and help create a more just and equitable cannabis industry: waiving the license application fees, creating seed programs to fund cannabis businesses started by people of color, or routing the tax revenues from cannabis business into communities directly impacted by the drug war.
Richardson agrees with Zavell and Supernova that reparations should address the economic disenfranchisement of black and Latino communities created by the drug wars.
“You can call it reparations, you can call it reinvestment,” Richardson said, “but if you’re going for fairness and justice than any policy needs to recognize there is emotional and psychological trauma, yes, but there was very real economic harm done to black and brown communities [by the drug war]. So whatever reparations looks like, it should come in an economic form. It should be money.”
Zavell notes that, despite his hesitancies about the program, it is still a historic measure.
“Look, in other counties and states, we’re fighting against measures that seek to bar people with criminal convictions from participating in the cannabis industry at all,” Zavell said. “The symbolic significance of Oakland’s equity program is great. It’s just the technicalities that worry me.”
California votes on a statewide recreational use bill this fall. The proposed Adult Use of Marijuana Act gives counties discretion when considering a licensing applicant’s criminal background, as does the state’s current Medical Marijuana Regulations and Safety Act.
As marijuana legalization moves forward, Zavell and other activists hope local and state governments take more active steps towards addressing barriers to entry faced by people of color and victims of the drug war in the cannabis industry, as well as help to create a just and equitable legal cannabis industry on the ground floor.
“Any just legalization or reform should not just be addressing the present moment and future,” Richardson said, “but should be addressing the past, as well.”
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