Oakland Cannabis Amendment Sparks Controversy

A new stipulation that required permit applicants to prove three years of residency in the city was quickly overturned.

Most people agree that the effects of over-incarceration are wide-ranging and destructive. But an Oakland program that allows individuals who’ve been arrested or incarcerated for marijuana-related offenses to open cannabis enterprises now faces pushback.

A March 8 vote by the Oakland City Council  — meant to clarify points of a program established last May, but not yet fully implemented — was largely a success, but a last-minute amendment introduced by Councilmember Noel Gallo left some cannabis entrepreneurs concerned for the future of their businesses.

The program in question will make it easier for Oakland residents targeted for marijuana crimes during the past 20 years to get equal footing in the flourishing cannabis trade through priority access to permits and zero-interest loans. These “equity permits” are the brainchild of Oakland Councilmember Desley Brooks, who, along with her supporters, was able to stave off several drastic changes to the program. But a new rule from Gallo would requires program applicants be residents of Oakland for at least three years.

As it now stands, 50 percent of Oakland’s permits for medical marijuana and cannabis businesses are allocated to individuals who have been arrested or incarcerated for marijuana crimes. These equity permits will be issued in the first of what is now expected to be two phases, to ensure Oakland complies with state laws requiring regulation of the cannabis industry by 2018, when recreational marijuana will become available for sale in California.

The stipulations require applicants who apply for an equity permit have a current income below 80 percent of the city’s median. Applicants must also fulfill one of two criteria: They must have been convicted for a marijuana crime (dating back to 1996), or have been a resident for 10 of the past 20 years in one of the Oakland police beats where drug crime was most heavily prosecuted. That includes areas of East Oakland, West Oakland, and Fruitvale — all located in the city’s flatlands.

The eight dispensaries currently operating in Oakland will be grandfathered into the new regulations, but many other cannabis business owners in Oakland have expressed distress over the prospect of another residency requirement.

“These rushed decisions are really harming the Oakland industry overall,” says Sascha Stallworth, one of the founders of Kamala Cannabis Edibles.

Should the residency clause remain intact, she feels she might have to move her business to another city.

“They just keep putting in these little stipulations, and when you look at the big picture, they don’t make sense,” she says.

Part of the issue derives from $3.4 million in cannabis business-license tax revenue earmarked for equity permit recipients who want to open businesses of their own. Stallworth says that if businesses that cannot comply with the three-year residency stipulation are forced to leave Oakland, the majority of that $3.4 million may leave with them.

“Where do they think the funding is going to come from if we don’t have these permits?” she asks.

Another prominent Oakland cannabis-business owner, who requested to remain anonymous over concern of retribution echoed Stallworth’s worries.

“I’m struggling to see who this actually helps,” this individual says. “It not only doesn’t help the equity permits, it cuts off all funding before the program even starts. Many of the companies who are currently taxpaying citizens of the Oakland community will be forced into surrounding areas, where they will be still able to sell their products in Oakland, but without the city receiving the jobs, economic stimulus, and tax revenue that it needs. When those companies are forced to leave, the employees left behind will be unemployed, without income to put back into Oakland’s economy.”

On the other hand, activist Carroll Fife points to the importance of the equity program as a way for Oakland citizens to be given a chance to turn past hardships into future opportunities.

“I am pleased to see an approach by the City Council that prioritizes Oakland residents who’ve been impacted by the racialized War on Drugs,” Fife says. “This Oakland-first thrust shows a real commitment to lifting up our city from its base and can give Oakland’s Black community a chance at economic self-sufficiency.”

Oakland Department of Race and Equity Director Darlene Flynn provided statistics to the city council showing large disparities in the number of minority residents arrested for drug offenses, compared to their white peers. In fact, according to data presented by David DeBolt of the East Bay Times, the arrest rates for cannabis offenses in 2015 were 77 percent for African Americans, 15 percent for Latinos, four percent for whites, and two percent for Asian Americans.

In a statement provided to SF Weekly, Oakland Mayor Libby Schaaf expressed that she sees both sides.

“The data-driven equity analysis makes clear that there have been disparities in the past that we should look for innovative ways to rectify with this new policy,” she says. “My concern with the residency requirement in particular is that several parties have already threatened to file lawsuits that will have the unintended consequence of stifling this growing industry and equitable access to the opportunity it can bring.”

There is no question that Oakland’s equity program is both a groundbreaking and pivotal step in restoring power to those who have previously been victimized by biased, “War on Drugs” propaganda and racial profiling. The narrative of current business owners seems to indicate overwhelming support for the equity permit concept, but not the stipulation that businesses must prove three-year residency.

Thus the question remains: How can the city of Oakland implement its equity permit system in a way that doesn’t ostracize the business owners who are largely expected to fund it?

Zack Ruskin covers news, culture, and music for SF Weekly.

[Author’s Note: On March 21, Councilman Gallo (who had initially proposed the three-year residency amendment) moved to remove the requirement. During public comment, California Legalized noted that “Cannabis industry folks, mostly white, want residency requirement lifted. Everyone else, mostly black, do not.” The Oakland City Council then voted to eliminate the residency requirement. In order for this change to fully take effect, a second vote will take place on March 28.]


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