California’s Race To The Top On Cannabis

Photo Credit: Mathew Sumner

The city of San Francisco announced this week that it would wipe out or reduce the sentencings for all cannabis-related crime convictions, misdemeanors, and felonies, dating back to 1975. This means thousands of people who are serving time or who have served time will have their cases reviewed, and will have their paths cleared to either be released from jail or to pursue housing, jobs, and other life necessities that they’ve previously been barred from due to the drug convictions.

In essence, San Francisco is resetting the clock on the War on Drugs, at least for cannabis. The city is expanding upon Proposition 64, the state law that went into effect this year that makes amnesty for weed-related crimes a condition for legalizing cannabis in California.

As incredibly progressive as that ordinance is, San Francisco is not alone in attempting to work racial equity into the new legalized cannabis landscape. Cities across California and other states are upping the racial equity quotient in various ways, in what looks like a race to the top for seeking true racially and economically inclusive outcomes. As city leaders scratch their heads over how to realize real racial equity in policymaking, the legalized weed experiment is acting as the test case, and is already proving itself sticky enough that cities are almost competing to be the most weedfully woke.

Oakland set that trend off last year when it launched its cannabis equity assistance program, which is designed to help people who either lack the capital to start their own business or have been restricted from doing so because of past weed crime convictions. On the same day that San Francisco made its announcement, Oakland revealed the names of the first class of people to receive permits for opening cannabis dispensary companies under that equity assistance program. Of the eight permits awarded, six went to companies owned by people who either fell into the program’s low-income threshold (making less than the average median income, which for Oakland is $56,300 for a one-person household), or who had been convicted of a weed crime dating back to 1996. Most of those companies have committed to employing formerly incarcerated people for at least half of their staffs. There will be 29 cannabis business locations across the city who won’t have to pay rent and will have their security costs covered for three years because of this program.

It’s not just the historically uber-liberal Bay Area that’s embarking on this. Los Angeles also has a cannabis social equity program that prioritizes business permits for people with low incomes, who have lived in an area ravaged by the drug war, have criminal records (because of past weed prohibition), and who plan to hire at least half of their workforces from local residents. Both Oakland and L.A. are also prioritizing permits for people who don’t personally fall under this criteria, but are willing to finance or lease space to applicants who do. In Oakland, the city is aiming to award an equity permit for every existing cannabis company that already has a leg up in the market (some companies have been operating under the state’s medical marijuana law, which has been in effect for years). In L.A., the city wants to do a two-to-one match between equity businesses and the grandfathered companies they need to catch up with.

And in Sacramento last November, the city approved the creation of a Cannabis Opportunity, Reinvestment and Equity program. The criteria are similar to those of the equity programs in San Francisco, Los Angeles, and Oakland in that permits are set aside or prioritized for people who are living below federal poverty levels and have been impacted by the drug war. Sacramento also joins these cities in helping expunge the records of business-seekers who have past drug crime convictions. The city is also offering applicants business and technical assistance.

The states of Ohio, Florida, Pennsylvania, and Maryland also have equity programs for their medical marijuana permitting processes (though there have been problems with the roll-outs).

One organization that has been tracking the race is the Oakland-based Hood Incubator, which works with the formerly incarcerated and people from the city’s poorest black and Latino communities to help prepare them for opportunities in the cannabis industry. This week they announced a $1 million partnership with the California-based cannabis technology company Eaze. Under that partnership, Hood Incubator will expand the scope of its work, which includes expungement clinics and business workshops, as well as developing more progressive policies for cannabis-business-friendly cities and states to adopt. One of their first joint projects is the creation of a “Cannabis Equity Strategy Manifesto” that will curate and build upon the best practices from all jurisdictions that currently have an equity program, to create a model policy for all future cities and states looking to get into the cannabis market.

Lanese Martin and Ebele Ifedigbo, the Hood Incubator’s co-founders and directors, are concerned that the incentives some cities are offering may prompt companies to help minority-owned businesses for the wrong reasons.

“Some people aren’t partnering (with equity applicants) because this is the most viable thing for their business, they’re partnering because they want to get a license, which means there is an ulterior motive,” says Martin.

Despite the heavy regulation of the cannabis market at both the city and state level (and maybe the federal level if Senator Cory Booker has it his way), there has still been immense growth in revenue and profits in this field. According to the 2017 Cannabis Industry Annual Report, from New Frontier Data, “The legal cannabis market was worth an estimated $6.6 billion in 2016, and annual sales are projected to grow at a compound annual growth rate (CAGR) of 16% to reach more than $24 billion by 2025.” And that’s only based on the states where weed is currently legal.

The fact that this market has matured so quickly despite heavy-handed regulations and civil rights controls evinces the potential of this industry to not only be a game changer for health and capital, but for race relations. If nothing else, it shows that a lot of people have been willing to go to great lengths—to the extent that they’re willing to meaningfully confront past and present racism—just to get their hands on some good weed.