It was a standing-room-only kind of night at City Hall in Oakland yesterday evening. Oakland’s City Council, fronted by councilmember Desley Brooks, gathered on September 27th to hear public comments on a proposed amendment known as the Equity Permit Program (EPP).
The EPP would re-shape the way cannabis companies operate in Oakland, and there were many concerned citizens ready to share their opinions with the council. Very few people oppose the concept of granting permit opportunities to individuals who have been disproportionately affected by the War on Drugs.
The problems arise in defining the nuts and bolts of the amendment, and every tweak threatens licensing opportunities for a variety of potential business operators.
Race and equality were the focal point of discussion, and many public speakers passionately presented their concerns and suggestions. Unfortunately, the problems presented with this proposed amendment are incredibly complex, and an obvious solution failed to emerge.
What is Going On with Oakland Cannabis Permits?
Here is an over-simplified explanation of the EPP and what it could mean for Oakland’s cannabis industry:
The EPP would divide permit applicants into two separate pools. The first pool would consist of individuals disproportionately affected by the War on Drugs. The second pool would consist of everyone else. Permits would be distributed on a one-to-one basis, alternating between the two pools.
Additionally, all businesses operating in the commercial cannabis space would be required to give 25% of their company and one seat on their board in order to receive a business permit. These funds would be allocated into a fund that would support Oakland’s emerging industry along with various social services.
After heated discussion from both sides, there are clearly two major concerns with the proposed EPP:
- How do you define an individual as being affected by the War on Drugs so no deserving individuals are excluded?
- How can a business possibly operate if 25% of generated revenue is distributed to the city on a quarterly basis?
Qualifying for the War on Drugs Applicant Pool
Dividing avenues for licensing into two pools carries inherent flaws, namely that residency and criminal record requirements are restrictive to individuals who may have faced discrimination for their activities with cannabis.
The current proposal consists of a residency requirement that would disqualify anyone not living within six of Oakland’s fifty-seven police beats. A major theme throughout the evening was an expansion of these zones to include neighborhoods like West Oakland and Fruitvale, but many feel that even adding those would keep deserving individuals from qualifying.
Another odd-ball requirement used to define disproportionately-affected individuals was if a person had been convicted on drug charges in Oakland. OakDECC, among other advocacy groups, feel that this qualification should be expanded to include drug convictions anywhere should count, and not be limited to having occurred within the past ten years.
There are several yet-to-be-answered definitions of qualifications, including continuous residency, arrests of extended family, and the percent of ownership maintained by the applicant.
Operating a Business with Major Taxation
While there is hesitant concern for the institution of a two-pool applicant system, there is pure outrage over the proposed financial requirements that the city would take from businesses.
Giving up a minimum of one board seat and 25% ownership of a company is unprecedented in cannabis regulation. Many businesses, if not most, see this as the nail in the coffin for Oakland’s cannabis potential. Those in favor of the EPP stood behind the idea that businesses unwilling to pay the city were welcome to leave.
But owners of several cannabis companies warned that there would be an exodus of business if Oakland implemented this 25% ownership clause, resulting in a major loss of income already generated from existing cannabis taxes.
Some Key Points Presented During the Meeting
Desley Brooks began the meeting with a speech about the current inequality in the cannabis industry. The two numbers she presented were the fact that only 35% of cannabis business applications were actually residents of Oakland.
In that vein, of the eight dispensary licenses currently distributed, only one was granted to an Oakland resident. In framing the purpose of the amendment, Brooks said, “the vast majority of people in this industry making money are white males.”
There were a number of topics brought up by citizen speakers regarding inclusion, fairness, racial equality, and the wavering opinion that Oakland will be the hub of cannabis business in California.
Both sides of the argument were driven by emotion, with at least one individual being escorted from the hearing room. Interestingly enough, everyone seems to be unhappy about some aspect of this EPP amendment. As one speaker reinforced, “Just because we call something equal, does not make it so.”
Clearly, the discussion of this amendment is far from over, but clearly there is a lot of work to be done with the state’s permitting process rapidly approaching. California requires city licensing to be eligible for state licensing.
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