Oakland’s Ambitious Diversity Plan for the MMJ Industry

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, Oakland’s Ambitious Diversity Plan for the MMJ Industry

By Omar Sacirbey

Oakland is targeting the War on Drugs.

The California port city’s lawmakers this month approved rules designed to allocate more medical marijuana business licenses to minorities, especially those in neighborhoods disproportionately affected by the U.S. drug war.

Because blacks and Latinos have been swept up by the War on Drugs, many have criminal records and are therefore barred from the marijuana industry.

Oakland’s new rules – the Equity Permit Program – run counter to national trends in marijuana policy. Many legalized marijuana programs bar people with drug or other convictions from participating.

The Oakland program stipulates that half the medical cannabis business license awarded in the city go to applicants who’ve been incarcerated for a marijuana-related offense – as well as applicants who’ve lived for the last two years in one of six Oakland police department beats hit hard by the drug war.

The program has drawn mixed reviews.

Some – though not all – advocates of greater minority participation in the marijuana industry welcome the new rules.

And if the program succeeds in increasing cannabis industry diversity without creating unforeseen consequences, supporters hope they could be replicated in other municipalities.

Minority Advocates Welcome Program

“As a Bay Area native, I see significant need to engage and maintain local participation in business and economic growth,” said Robert Van Roo, president of the Palm Springs Safe Access Dispensary in California, and part of the executive committee of the National Cannabis Industry Association’s Minority Business Council.

“The Equity Permit Program facilitates economic growth at the local level, allowing not just patients, but the entire community, to benefit from the presence of a dispensary.”

Jeannette Ward, an executive at the marijuana software firm MJ Freeway and co-chairwoman of the Minority Cannabis Business Association, agreed.

“I think they do help for sure,” she said. “There’s a lot of sense in saying we would like our dispensary owners to reflect the communities they serve.”

Members of Oakland’s cannabis industry, meanwhile, favored the program’s intent. But they argued it should be expanded to other police beats, including in West Oakland. The six beats – which mostly fall inside the district of the council member who pushed for the equity system – represent a fraction of Oakland’s 57 total beats.

Moreover, critics contend the program could actually make it tougher for minorities to run a cannabis business – and could gum up the permitting process as well as undermine the city’s burgeoning marijuana industry.

“It’s not actually addressing equity, and it may possibly be setting it back,” Alex Zavell, a regulatory analyst for Oakland cannabis attorney Robert Raich, told the San Francisco Chronicle.

Breaking the Conviction Barrier

By singling out the War on Drugs, the new rules address one of the biggest barriers to entry for minorities: drug-related convictions. Many states have rules that bar people with criminal records, including marijuana-related misdemeanors, from participating in the MJ industry.

“I believe that cannabis related convictions must be addressed in any permit scheme,” said Van Roo. “At the very least, the Equity Permit Program attempts to deal with these convictions in a way that is fair and reasonable; but I believe a final and equitable systemic reform will necessitate action from the state legislature.”

A couple of states have sought to address the cannabis industry’s lack of diversity through legislation. But those regulations don’t go nearly as far as Oakland’s new rule.

Florida’s newly expanded medical marijuana law mandates that the state must add three new licensees if the patient total surpasses 250,000. One of those new license holders must be a member of the Florida chapter of the Black Farmers and Agriculturalists Association, and have been a participant in a class action lawsuit in which some 400 black farmers sued the U.S. Department of Agriculture for discriminating against black farmers.

Pennsylvania’s new medical marijuana law calls on state officials to reach out to minorities and encourage them to apply for licenses. It also calls on Pennsylvania’s health department to issue a report in 2018 on whether the program is succeeding in creating a diverse marijuana business sector.

Fixing Any Kinks

Oakland’s equity system has raised questions about the way the six police beats were earmarked for special treatment under the city’s licensing program.

“If the goal is to place special emphasis on the neighborhoods affected by the War on Drugs, then those neighborhoods should be identified citywide and not just in one part of the city,” said Robert Selna, an attorney with the Oakland law firm Wendel Rosen, which supports the city’s efforts to regulate medical marijuana.

Shaleen Title, CEO of the THC Staffing Group in Boston and a board member of the National Cannabis Industry Association’s Minority Business Council, noted that rules don’t always start out perfectly. She added that it’s better to proceed, and then adjust the rules as needed.

“As with all legal marijuana policies, they may not be perfect at first, but we will closely monitor the results and use them to adjust future policies,” Title said.

Van Roo agreed. “I feel that there are flaws in the program as it is currently conceived, but I’m hopeful that those flaws will be addressed by the city of Oakland and the Oakland Cannabis Regulatory Commission through imposing appropriate checks and balances in the permit process,” he said.

Omar Sacirbey can be reached at omars@mjbizdaily.com