Amid growing concern about racial inequity in the cannabis industry, the City of Oakland is attempting to create what is possibly the world’s first drug war reparations program. Under its “equity permits” system, applicants with marijuana convictions will go to the head of the line for new medical cannabis licenses in certain neighborhoods. It’s a bold and controversial program, and it comes up for another debate tonight during a meeting of the Oakland City Council’s Public Safety Committee.
The City Council made national waves back in May when it originally approved the program. That vote was part of an expansion of the city’s legal medical cannabis industry — with new licenses for bakers, farms, hash-makers and delivery services. Under the terms of the equity program, every other new license must go to a qualified Equity Permit Program applicant. To qualify, the applying canna-business must be majority-owned by a drug war victim — specifically, residents of a handful of police beats in some of Oakland’s roughest neighborhoods, or marijuana sellers convicted in Oakland within the last ten years.
Oakland city councilmember Desley Brooks represents many in those police beats. She sponsored the amendment that created the equity program. The city’s own Cannabis Regulatory Commission howled in protest, saying Brooks steamrolled 18 months of research and public input. Critics of the program say it will bottleneck Oakland’s medical cannabis expansion and cripple its competitiveness statewide.
But almost no one knows what it’ll actually do, because it’s never been tried. According to insiders, it’s not clear when or where applicants start lining up for the potentially lucrative program. Potential market distortions will take months or years to become clear.
“Oakland is the first jurisdiction in the world to recognize the disproportionate harms of cannabis prohibition by building it into their regulations,” says Amanda Reiman, the marijuana law and policy manager for the Drug Policy Alliance. “There is a wide recognition of these disparities, but Oakland is the first to take on institutionalizing a response.”
Too many in prison, too few in business
Compared to whites, people of color are vastly over-represented in America’s jails and prisons, while vastly under-represented among legal cannabis businesses. As medical and recreational legalization grows into an estimated $40 billion industry by 2020, a bitter truth has emerged: Black market players are largely barred from going legitimate. Most state rules refuse licenses to drug felons, for reasons of public safety.
Even amidst decriminalization, large racial disparities exist among those who get ticketed. Blacks are about four times as likely as whites to get a cannabis possession ticket in California, new research shows.
“Policies in the U.S. have been designed to allow certain people to flourish and others to perish,” says Reiman. “In any other industry, those with the capital and privilege to begin with are often the ones who succeed, save for the folks who are plucked out of their communities for being unique or special in some way. In America, involvement with the criminal justice system is typically a barrier to success too high for most to see over, let alone climb over. The American public knows this, and regards this with disdain, but is complacent. We have a chance with the newly legal cannabis industry to flip the script, not only by providing opportunities specifically to those most often denied them, but by showing the world that people are not their pasts.”
Elsewhere in the country, similar efforts are growing. Cities like Portland, Oregon are championing expungement clinics to wipe records clean. In 2017, Oregon convictions for serious cannabis felonies, like manufacturing, that are at least ten years old can also be sealed.
When the City of Berkeley issued a dispensary permit to entrepreneur Sue Taylor earlier this year, she became one of only a handful of African-American dispensary owners in the United States. Berkeley councilmembers selected Taylor not only for her winning application, but to increase diversity among providers in the famously progressive city.
Would Prop 64 change things?
California’s Proposition 64, the California Adult Use of Marijuana Act, would build on recent efforts to reduce burdens on the formerly incarcerated. The proposal includes a provision for record expungement, and re-sentencing for those in prison.
But what Oakland is doing is the boldest move seen thus far. Law enforcement officials routinely ask lawmakers to bar people with past felonies from the legal cannabis industry. They usually argue that the prohibition is necessary to prevent criminals from infiltrating the legal regulated industry. Now, Oakland will explicitly let them in.
There may still be obstacles to the program’s implementation. It’s possible that denied license applicants could sue the city, claiming unequal opportunity. Many people have been harmed by the drug war who don’t live in the select police beats, or who pled out to a lesser charge. The minority female marijuana owner interest group Supernova Women argued as much at City Hall.
Oakland lawmakers have promised to keep tweaking the Equity Program and lead the discussion on ending America’s mass incarceration epidemic. Earlier this summer the Council approved a resolution asking state legislators to expunge cannabis-related criminal records, and to remove restrictions excluding individuals with cannabis-related offenses from participating in the cannabis industry.
Lori Ajax, California’s medical marijuana regulator, appears to be aware of the equity issue. Her spokesperson has said that state license applicants will not be automatically barred for a past conviction. Under state law they “may” be, but Ajax’s Bureau of Medical Marijuana Regulation plans to decide on a case-by-case basis, and “evaluate the seriousness of the crime at that point,” she told the Los Angeles Times.
A good model to copy, with revisions
Other cities should mimic Oakland’s new program in some form, said Dr. James E Sulton Jr., one of the nation’s rare African-American cannabis entrepreneurs. Sulton, a former Howard University faculty member, co-owns A Bud & Leaf, a retail cannabis store in Olympia, Washington.
“Slowly abolishing marijuana prohibition will eventually shrink a racially biased legal system, but more needs to be done to change the economic dynamics that favor one race over another,” he told Leafly. “Only by promoting economic access can we correct the discrimination of a failed legal system. Legal reforms must be coupled with economic considerations that ensure fairness and diversity in business.”
Sulton offered examples of regulations that work toward inclusiveness for entrepreneurs of color. “Rules requiring that marijuana stores are sufficiently spaced apart and located in diverse neighborhoods create healthy competition and encourage entrepreneurship,” he said. “Residency requirements also help ensure that local entrepreneurs are not crowded out of the market. Most important, the boards overseeing the issuing of licenses for marijuana businesses should themselves have adequate representation of minorities.”
“Federal law mandates that a small percentage of government contracts go to economically or socially disadvantaged owners – essentially minority-owned businesses,” Sulton added. For decades, government agencies have used marijuana to criminalize minorities. To rectify that, Sulton said, “state and local governments that have some form of legal pot should go a step further in identifying opportunities to be more inclusive regarding industry rules governing past drug offenders.”
Amanda Reiman considers Oakland’s new program to be part of a broader trend toward more awareness of inequities across all American industries. “The lack of gender and racial diversity among top American business people has been shameful for decades,” she said. “There is a real interest in ensuring that the face of the legal cannabis industry looks different than the face of American industry.”