Can Oakland Help Solve the Weed Industry's Diversity Problem?

People of color have been largely left out of the Green Rush – but this Bay Area city has a plan to turn that around

An inside look at the Equity Permit Program, which is trying to even the playing field for the weed industry in Oakland. Credit: Orjan F. Ellingvag/Getty

For the last three decades, 56-year-old Alexis Bronson has been paying his bills by growing weed. His love of the plant started back in the 1980s after a trip to a Humboldt County marijuana farm, and since then he's cultivated his own grow operations in Vallejo and Oakland. He's graduated from cannabis flowers to growing seeds and clones – exact replicas made from the primo weed plants – and sold his products at one of the largest and most longstanding dispensaries in the country, Harborside Health Center.

"I consider myself more of a botanist or horticulturalist," says Bronson. "If someone just calls me a pot grower, I get really upset."

Bronson has kept his head down, his grow operations quiet and managed to stay mostly out of legal trouble, with no felony arrests. He had a brief run-in with the law when he and a friend were pulled over on the highway, he was arrested for conspiracy to purchase cannabis and had his truck seized. Criminal charges against Bronson were eventually dropped after he was able to produce a medical cannabis recommendation for the court.

Even after all these years and a mostly clean record, the combination of his six-foot-five, somewhat "intimidating" frame – coupled with the fact that he's black – has made it difficult to secure big-time funding, he says.

"I couldn't really get a team behind me because I didn't really have the face that says legitimacy," says Bronson.

But these days, it's him giving prospective investors the cold shoulder. Cannabis companies, attorneys and venture capitalists are clamoring to back Bronson, because he's one of the first to receive a medical cannabis license under a first-of-its-kind program in Oakland, California.

Last March, after a year of city hall meetings, public input and revisions, Oakland City Council approved a final version of the Equity Permit Program and opened it up to applicants at the end of May. This pioneering protocol for distributing marijuana licenses prioritizes minority communities who have been unfairly impacted by the War on Drugs. The program currently applies only to medical licenses, but the city plans to introduce the equity program for adult-use permits later this year, or in 2018.

"When you look across this country, the people who are making money in respect to cannabis and recreational marijuana are white men," says Oakland City Councilmember Desley Brooks, who spearheaded the creation of the new program. "The people who have historically gone to jail for the same activity are predominantly African-American and Latino."

In fact, while marijuana use is about equal among black and white individuals, blacks are 3.73 times as likely to actually be arrested for marijuana possession, according to a 2013 report from the ACLU. These arrests – even for small amounts of weed – can haunt the individual for years and make it difficult to get hired in the now-increasingly legalized industry. While more than half of the country has made medical cannabis legal, many of these states bar people who've been convicted of drug crimes from owning, working or investing in a marijuana business.

The history of marijuana prohibition in this country is "rooted in the deliberate demonization and criminalization of black and Hispanic men," as Killer Mike and his co-author Erik Nielson described in a Rolling Stone op-ed last year. In fact, this discrimination stretches all the way back to 1937, they say, when Congress passed the Marijuana Tax Act and the head of the Federal Bureau of Narcotics stoked fear of marijuana with racial epithets like, "reefer makes darkies think they're as good as white men."

This war on weed and any minority populations associated with it has continued to the present day, and while there isn't much data on the demographic breakdown of cannabis business ownership, only about 1 percent of marijuana business owners in the U.S. are people of color, according to a 2016 Buzzfeed investigative report.

Even in Oakland – a historically pot-friendly city – the black and hispanic communities have been plagued by arrests while white smokers remain relatively unscathed. In 2015, white residents made up 31 percent of Oakland's population but just four percent of cannabis arrests, while black residents made up 30 percent of the population but 77 percent of cannabis arrests, according to an equity report issued this year by the City of Oakland.

The city's new program is intended to balance these scales by identifying who has been most impacted by the War on Drugs and then giving them a leg-up on the legalization process. Yet while many have praised the city's efforts as being a "step in the right direction," concerns remain over the specifics of the program's requirements and its potential to stifle competition in the industry.

To qualify as an equity applicant, one must be an Oakland resident and have an annual income that's 80 percent or less of the Oakland's average median income – for a one-person household in 2016, this 80 percent threshold would be $52,650 or less. For at least 10 of the past 20 years, the applicant must also have lived in one of the police beats identified as having high levels of cannabis-related arrests, or have been arrested and convicted of a cannabis crime in Oakland after November 5th, 1996. (This was the date that Prop 215 passed, legalizing medical cannabis in California.)

Bronson moved to Oakland in 2002 and has lived in Police Beat 26Y – one of the pinpointed areas in East Oakland – ever since. In 2016, Bronson was operating an illegal indoor grow operation when his building was bought by some wealthy out-of-towners and he was evicted. As he stood outside reading his eviction notice, a car barreled into his truck, ushering in a streak of bad luck that included battling stage-three colon cancer – in which he lost more than 60 pounds from the chemotherapy – and being unable to find a new affordable location for his business.

Oakland's sweeping gentrification, fueled by the tech boom in San Francisco, has priced many long-term residents out of their own neighborhoods. When Bronson tried to bootstrap a home-grow in his garage in the meantime, he was robbed by some "local thugs" and was back to square one.

"It was a very hard pill for me to take," he says. "I'm able to pay my bills and stuff, it's just been a real strain. I don't have a safety net."

For Bronson, the equity program came just in time. It doesn't just provide qualified Oakland residents a first shot at recreational licenses, it attempts to remedy the other major hurdles that have prevented many people of color from starting their own cannabis businesses: funding and access to real estate.

The Oakland program will be rolled out in two phases; the first is based on a somewhat controversial one-for-one model that requires half of all medical cannabis licenses go to equity applicants. If there are only 10 equity permits given, that means there can only be 10 general permits as well. Some in the cannabis industry are concerned this clause in particular could restrict the competition needed for a healthy market.

This first phase of Oakland's program also includes an incubator aspect, in which investors can jump the line to secure their own permit if they partner with an equity applicant and provide them with rent or real estate for a minimum of three years.

As of mid-July, there were a total of 69 applications submitted for medical cannabis businesses in the fields cultivation, delivery, manufacturing, distribution, testing and transportation. Of this number, 31 were equity applications.

While the city is hoping this incentive sparks some marijuana matchmaking and enables more equity businesses, Bronson says he's yet to find someone he feels comfortable working with. A mixer hosted by the city earlier this year tried to connect equity applicants with interested investors, but it turned into a bit of a meat market.

"They just had dollar signs [in] their eyes," he says.

Oakland's equity program is largely unprecedented, but it's the city's distinct history of revolutionaries (birthplace of the Black Panthers), take-no-shit attitude (a hub of Hells Angels), and widespread love of marijuana (home to Oaksterdam, America's first cannabis college), that seems to make it ideal for this type of experimental effort.

"Oakland is a particularly unique town because it has a history of being very cannabis-friendly," says Darlene Flynn, director of Oakland's Department of Race and Equity. "And it turns out that friendliness was very, very racialized."

Flynn's department was established by an ordinance passed in 2015 and is focused on ridding the city of "systemic inequities" that have been created by longstanding policies and power dynamics. Flynn's first week on the job, she ordered an analysis of disparities within Oakland's medical cannabis industry and recommendations for amendments to the city ordinance that would address the root causes of these inequities.

According to the report, following California's legalization of medical weed in 1996, a mostly white cannabis community began "experimenting semi-openly" with growing, manufacturing and distribution.

"These activities proceeded, largely unimpeded by law or regulatory enforcement to this present day as demonstrated in cannabis arrest rates by race," the report continued.

While Oakland tries to reckon with its whitewashed past, some jurisdictions are beginning to follow suit. For example, some states have taken steps to loosen background check requirements and allow people convicted of non-violent drug crimes to work in the cannabis industry. Other states have tried setting diversity quotas, like in Ohio, where the legalization of medical marijuana last year included a requirement that 15 percent of all licenses go to minority groups. (This still may face legal challenges down the road, as the constitutionality of racial preference is still up for debate).

But it seems few, if any, other cities have taken the calculated steps that Oakland has.

"The way that they have structured this program is completely new. I haven't seen anything like it at all," says Jesce Horton, founder of the Minority Cannabis Business Association (MCBA).

Horton started this nonprofit in 2015 to ensure that the same people of color who have been targeted for selling and possessing weed could now benefit from the legal industry through business ownership, employment and tax appropriation. Over the past two years, Horton says, there's been slow but encouraging signs of change.

"You have seen a lot more interest and a lot more involvement from communities of color," he says. "Transitioning that interest to licensing hasn't been as strong as we'd like."

There are also a few major barriers to people of color looking to cash in on cannabis, says Horton: policy, funding and education. Government policy often favors people with financial and political capital, says Horton, and because marijuana is illegal at a federal level, traditional funding sources like bank loans aren't an option, which means entrepreneurs must have independent wealth or access to private investors. Then there's the issue of education, as people of color have been targeted by police for so long, it can be difficult to coax them from the shadows.

Horton's own parents didn't want him smoking, possessing or being associated with cannabis, for fear he would be prosecuted.

"They were scared," says Horton. "And they were right, I ended up getting arrested three times and it could have easily cost me my future."

In Oakland, education efforts have been largely grassroots, led by community members who have expertise in the cannabis industry as well as the connections needed to help "underground" cannabis operators go above board. One such operation, the Hood Incubator, was founded last year in the face of cannabis legalization and helps connect minority entrepreneurs with the resources needed to start a business. They have been helping spread the word about Oakland's equity program and part of a larger, holistic approach to bring more people of color into the cannabis industry.

In anticipation of Oakland's new licensing program, the Hood Incubator launched a four-month, 100-hour, pre-seed accelerator to provide black community members with access to capital and formal business training. There were 40 applications submitted for the program last fall, 15 were accepted and eight fellows stuck it out until graduation.

One of those fellows is 32-year-old urban planner Juell Stewart, who moved to the Bay Area in 2015 – in large part because of its weed-friendly reputation.

"I wanted to move somewhere that had a more relaxed culture around cannabis because I knew it was something that I was interested in recreationally and also as a business pursuit," she says.

Although Stewart, who is black, is not eligible for Oakland's new equity program, she attended the Hood Incubator's "mini boot camp" cannabis school anyways to make inroads in the industry. During the program – which was twice a week from 6 to 9 p.m. and followed a full day of work for Stewart – she was able to workshop pitches and develop a business strategy for a cannabis-centric media business. She described her company as a "lifestyle brand" that's designed to create content for "sophisticated urban smokers" and forge partnerships and promotional opportunities with other like-minded companies.

"Seeing the weed industry come up here and seeing us not reflected in it, is pretty crazy to me," she says. "Black people love to smoke weed. I mean, let's be real about it."

While she knows people are squeamish around the word, Stewart says Oakland's equity program is an opportunity to provide "reparations" in a unique way for communities of color. It's not just about Oakland making "concessions" to help black residents break into the industry though, she says, it's stimulating growth "in our own communities" through programs like the Hood Incubator.

"California's a policy lab and once California figures stuff out, it doesn't have to be perfect, but all eyes are going to be on us, and so goes the rest of the country if we exist in a couple of years," says Stewart.

Joining Stewart in her graduating class is Aanya Gamble Hill, a senior retired from work as an administrative assistant at the University of California, San Francisco. Hill is also a longtime Oakland resident who has been using cannabis to help treat her glaucoma. Hill's building a specialty delivery service that caters to older, professional women like herself, who are often at home during the day and may not want nosy neighbors to know they use marijuana – and they definitely don't want to be out braving dispensaries.

"For me it's about discretion," she says. "My mother always said, 'Everybody's business ain't nobody's business."

Hill has kept her focus narrow, prioritizing women in nearby neighborhoods who have health problems such as pain from arthritis or inflammation, which she believes can be effectively treated with cannabis. She has seen firsthand the physical benefits of weed, and the pitfalls of discontinuing use. Hill once stopped smoking for nine months and was overcome with inflammation pain, her arm swelled up until it "looked like a Vienna sausage," and she could barely exercise, she says.

After her training at the Hood Incubator, Hill says she feels fluent in the financial aspects of being an entrepreneur and is gearing up to apply for a delivery license as a general applicant. She wants to be able to educate other women in the AARP set on the health (and beauty) benefits of cannabis.

While many have commended Oakland for acknowledging and attempting to address the gaping racial divide of its cannabis industry, concerns remain over some of the details of the equity program.

As a born-and-bred East Oakland native, musician and activist Jennifer Johns, who is also black, initially thought she'd be eligible for the equity program, but like so many of her friends and neighbors who may have been eligible, she has since moved to a more upscale neighborhood. Some residents have been priced out of the city entirely.

"We've so rapidly gentrified that a lot of these people that are most affected by this have already moved to Antioch, have already moved to Stockton, have already moved out," says Johns.

She says she's still planning to apply for a general applicant, light-use manufacturing permit in order to sell pre-rolled joints and topicals and, ultimately, achieve enough success to create job opportunities in her hometown. It's important that the city now focus on outreach, says Johns; it's going to take some creative marketing to convince people who have been perpetually persecuted to register themselves with the government as someone who sells drugs.

Since the program requires 50 percent of licenses in the first phase to go to equity applicants, the success of this effort will impact the industry as a whole.

"I think that the one-to-one idea is a great idea, the problem is that when dealing with historically oppressed people, creating enough trust with government agencies to tell them about this program, get them engaged in it, get them enrolled in them and then also make sure that they are in fact safe, is a whole process," says Johns.

While there are no caps on the number of licenses available for distributors, manufacturers, cultivators and other commercial cannabis applications in Oakland, the city limits the number of medical dispensary licenses to eight per year. Horton of the MCBA says that license caps aren't conducive for overall industry growth, as there doesn't need to be less white people, just more people of color. Even if half of the dispensary licenses go to people of color, "Congratulations, you've made four millionaires," he says.

Even Oakland City Councilmember Dan Kalb has some concerns about the existing program. For one, general applicants shouldn't be limited to providing equity applicants with real estate or rent money for three years, they should have the option to supply the equivalent amount of capital instead, so that applicants can use it for whatever they need, such as buying wholesale products.

These, and any other possible kinks that may arise, will be addressed during the six-month mandatory review process and periodic subsequent evaluations after that.

"Once it's implemented for a while we will see if it's successful at achieving the goal," says Kalb. "It's an experiment, but a worthwhile one."

In Oakland, the permit application process for medical marijuana dispensaries is expected to open later this year, with adult-use permits to follow in 2018.

For Alexis Bronson, marijuana licensing means he's able to come out of the shadows and operate with the air of legitimacy he needs to build his business and attract a qualified workforce. He’s one step closer to his goal now, as earlier this month, his equity application was accepted and he received a conditional approval letter from the City.

Bronson still remembers the emotional pain of being called a "drug dealer" by the people closest to him, and having his own friends and family jeer at his cannabis business, claiming it would land him in jail eventually. Now that recreational sales are on their way, "these same people think I'm the greatest thing since sliced bread," says Bronson.

The Equity Permit Program is Bronson's chance to rebuild his cultivation business, prove the haters wrong and start a new chapter of his life.

"I want to springboard it to number one, get back on my feet, but more importantly, to get compliant," he says. "I've been waiting 21 years for this."