Oakland's Weed Equity Program Not Helping Intended Recipients

Cannabis equity programs are growing in popularity, but do they actually work?


|||Vito Di Stefano/ZUMA Press/Newscom
Vito Di Stefano/ZUMA Press/Newscom

Oakland's cannabis equity program was designed to help poor residents and residents in high-crime areas benefit from the cannabis gold rush. This week, the San Francisco Chronicle reported that the program is failing the very people it's intended to help.

One of the most Oakland things of all time, the program is a well-intentioned effort to make right by the communities harmed in the government's war on drugs. Nationally, only 4.3 percent of (legal) marijuana business owners and founders are black, while 81 percent are white. By carving out a reserved space for them in the newly-legal industry, equity efforts like Oakland's aim to correct that imbalance. Shocker: That's not what's happening.

Per the design of the equity program, applicants to work in the burgeoning industry must be city residents and earn less than 80 percent of the average city income, which is about $45,040 per year for a one-person household. Qualifying residents must also have been either convicted of a cannabis crime in Oakland sometime during the last several decades, or have lived for 10 of the last 20 years in an area that experienced disproportionately high pot arrests. Per the city's website, half of all Oakland cannabis permits must be issued to people who fit the above criteria.

The program incentivizes other businesses to pitch in. General applicants, which are often large companies, can move up in the permitting line if they provide 1,000 square feet of free business space to equity applicants. Business space for equity applicants must be provided for at least three years, so it can't just be a short-term, nominal offering that's revoked as soon as a permit is received. While no company is forced to share its space with equity applicants, doing so allows traditional applicants to set up shop sooner and break into the market before their competitors.

The issue is that many of the larger companies who claimed they would take equity growers under their wing have gone back or stalled on the promise, but they haven't forfeited their spot in line. As a result, equity growers aren't actually getting the chance they were promised, while larger growers have successfully used them to cut ahead.

One equity grower profiled by the San Francisco Chronicle, Alexis Bronson, has paid thousands of dollars in licensing fees. He was promised grow space by companies NUG and Joyous Recreation & Wellness Group. The two groups have yet to give Bronson the space he signed up to lease, and Bronson has been waiting for a year to start operating. In the meantime, he's missing out on income.

The attorney representing NUG blames Oakland's onerous permitting requirements. Since the bureaucratic process is so slow, the logic goes, it's tough for the larger companies to honor their leases with equity growers. Many of the general applicants are still waiting on building permits, for example. It's hard to tell whether this is a convenient excuse, a legitimate grievance, or somewhere in between. Perhaps an even more libertarian solution would be to reduce permitting and licensing requirements, which could ease long wait times and financial barriers to entry. Regardless, the program isn't working as intended, and equity growers are losing out on valuable time and profit.

Despite this, equity weed programs remain popular in Oakland and beyond. Other California cities, like Los Angeles and Sacramento, have rolled out similar initiatives to help low-income people with drug convictions break into the new industry. Massachusetts just recently created its own statewide equity program, with four different tracks for underprivileged would-be entrepreneurs.

In other places, the idea of special carve-outs has been far more controversial. New York gubernatorial candidate Cynthia Nixon was recently lambasted for her comments to Forbes, saying minorities must be prioritized for marijuana-related licenses as the industry grows, and that issuing permits to them first is "a form of reparations." Black Lives Matter of Greater New York said Nixon's statement plays "into harmful stereotypes of African Americans as drug users and dealers," and that such measures "would not erase" the ills caused by the Jim Crow era, slavery, and other systems of oppression.

Leaders in the black community are partially right––weed equity programs rarely go far enough to right the wrongs of the drug war. As libertarian critics might point out, they merely create government-picked winners and losers, relying on arbitrary quotas and the cooperation of actors who might (unsurprisingly) try to game the system.

Expunging and down-grading convictions, banning the box that asks if job applicants have a criminal record, and changing policing practices to arrest fewer people for low-level drug offenses would likely create more meaningful results. Too often, weed equity programs are low in actual impact but high in political sexiness, easy to garner attention and curry favor for.

Oakland's situation shows that in addition to those other concerns, it's a tall order to assume that a government-run program will always work as intended.