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The war on drugs hit them hard, so Oakland is saving them a spot in the pot trade

The war on drugs hit them hard, so Oakland is saving them a spot in the pot trade

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OAKLAND, Calif. – Linda Grant says she has been smoking and selling marijuana since she was 11.

She got kicked out of school in the eighth grade for selling dollar joints and nickel bags in the girls’ bathroom. Police arrested her four times. One time, she said, the officers hogtied her after she tried to run.

But now the lifelong Oakland resident sells marijuana legally. She was among the first to sign up when the City of Oakland introduced a “Cannabis Equity Program” in 2017 to help people like her get into the newly legal cannabis industry.

“I’m not going to say it’s reparations,” said Grant, 50, a mother of six who co-owns three cannabis-related businesses. “But hey, I’ve never been on a family vacation, and now I’m planning my first family vacation.”

She wants to take her family to Hawaii.

“I don’t call it ‘cannabis,’ by the way,” Grant said from the living room of her rented duplex. “That’s a gentrified name. It’s called weed. We smoke weed. We sell weed. Let’s get that straight right now.”

As New York leaders contemplate legalizing adult recreational use of marijuana, the governor, state lawmakers and pro-legalization advocates have called for provisions in whatever law gets passed to promote social equity.

That would include sealing criminal records for marijuana convictions and setting aside tax revenue from cannabis sales or related fees to reinvest in communities most affected by the decades-long war on drugs.

State lawmakers and advocates want people from those communities – the ones most likely to have been arrested for marijuana offenses – to have a shot at getting into the legal cannabis industry.

“Not the rich corporations who come in to make a profit,” Gov. Andrew M. Cuomo said earlier this year.

Oakland is trying to do just that.

From Oakland to 'Oaksterdamn'

Oakland's leaders decided that at least half of all the city permits for cannabis businesses will go to "those who have been the most victimized by the war on drugs" – low-income Oakland residents who have either had a cannabis-related conviction in Oakland since November 1996 or have lived at least 10 out of the last 20 years in one of the city’s police precincts identified as having disproportionately higher numbers of cannabis-related arrests.

The other half of the permits go to general applicants. But even they get preference if they agree to act as an “incubator” for equity applicants by providing them a minimum of 1,000 square feet rent-free for three years. They also must provide security measures, such as guards or safes to store cash and products.

Greg Minor, an assistant to Oakland’s city administrator, is in charge of the permitting process. He said history prodded the city to come up with the program promoting equity.

In the late 1990s and early 2000s, medical marijuana was legal in California but not well-regulated, Minor said.

Oakland earned the nickname “Oaksterdam” as its downtown filled with unpermitted medical marijuana clubs.

“It sort of got out of hand,” he said.

In 2004, the city established a permitting process for dispensaries. A few years later, as Californians were contemplating legalizing recreational use, Oakland officials began talking about what that would mean for the city of 400,000 people.

The city’s newly formed Department of Race and Equity conducted a study looking at cannabis-related issues.

The study, relying on 20 years of arrest records, found that although African Americans make up about 30 percent of the population, they made up a disproportionately high percentage of those arrested for marijuana-related crimes, in some years as much as 90 percent.

The study also found that Oakland’s African Americans had more than double the rate of unemployment compared to whites and more than seven times the poverty rate.

In the meantime, Oakland had “a parallel, illegal but tolerated business environment for other people involved in the cannabis trade,” according to the study.

It came down to this: White people were being allowed to sell and smoke marijuana – even getting rich off it – while African Americans were getting arrested.

“You couldn’t ignore the data,” Minor said.

A way into the industry

Ebele Ifedigbo noticed the same thing.

Ifedigbo, who grew up on Buffalo's East Side and went to City Honors, was a business student at Yale University when Colorado, Washington and Oregon legalized the recreational use of marijuana.

Ifedigbo noticed the leaders in the new legal cannabis industry were “mostly middle-aged white men.”

“When I was growing up, it wasn’t those demographics who were getting locked up and getting all the consequences,” Ifedigbo said during a recent visit to Buffalo.

Ifedigbo wanted to find a way to get more black and brown people into the rapidly growing – but mostly white – legal cannabis industry.

With legalization of recreational use on the horizon in California, Ifedigbo began visiting the state and networking, knowing the market would be huge there. Ifedigbo met Lanese Martin, who also had an MBA and a background in community organizing, at a potluck dinner. Ifedigbo eventually moved to California and, with Martin, founded the Hood Incubator in Oakland in 2017.

The organization helps people navigate the city's equity program and holds monthly networking sessions connects entrepreneurs and investors.

The organization also started a business accelerator program to help people of color launch cannabis businesses. It immediately received 40 applicants. Fifteen were accepted, and they received over 100 hours of instruction in business planning and learned about the laws and regulations for the burgeoning cannabis industry.

Jeramey Alexander and Levar Eady, two graduates of the program, are starting their own businesses.

Alexander started Ness Culture, a distribution business, with his brother and a longtime friend.

“I’m more the paperwork, meetings, interview guy,” Alexander said. “They are more the know-the-product, know-the-consumer, know-the-price-points.”

Eady works in delivery but wants to start a large-scale commercial cultivation business. As a Hayward, Calif., resident, he can’t be in Oakland's equity program like Alexander, so he's had a difficult time getting that business started.

Eady shared his experience at a recent talk at a cannabis expo in San Jose.

“I was the only person of color there,” Eady said.

He recalled talking to another attendee, a young white man, who talked about how he raised the capital to start his business – by asking his dad for $100,000. The man said he could have asked 100 of his friends to pitch in $1,000 each, too.

That’s just not in the realm of possibility “for people that look like me and people that come from areas that look like mine,” Eady said.

Alexander pointed to other financial hurdles that many coming from the illicit cannabis trade don’t expect, like the cost of insurance for a vehicle used for deliveries.

Also, new business owners like himself could use legal assistance in figuring out how to do business above-board, he said.

“We need lawyers to help us set up these LLCs,” he said.

Business partners

Bri Moore, an Atlanta native, left a job with Morgan Stanley to pursue a career in the legal cannabis industry. She wanted to open a dispensary, but she needed an equity partner.

Enter Alphonso "Tucky" Blunt Jr.

Not long after California legalized recreational marijuana, Blunt received an intriguing phone call from a friend who wanted to know if Blunt had ever been arrested for a marijuana-related crime in Oakland. He had. It meant he fit the criteria for the city's equity program.

"His name is what?" Moore remembered asking when they were introduced.

Moore knew right away that with a name like Blunt – a blunt is a marijuana-filled cigar – they’d have a dispensary.

They applied and were among 36 applicants who made the initial cut. Just four would win a permit through a lottery process. They got one.

In November, the two co-owners opened Blunts + Moore. Their business is Oakland's first dispensary under the equity program, and it's located across the street from the Oracle Arena, home of the Golden State Warriors, and Oakland-Alameda County Coliseum, where the Oakland Raiders and and Oakland Athletics play.

"We call it the 'Walmart' of weed," Blunt said.

“I grew up not too far from here,” Blunt said, pointing out the window of the store’s waiting room, where customers have their IDs checked and logged before shopping. “To be able to sell cannabis legally across the street is some amazing stuff.”

A work in progress

About two years into Oakland's equity program, more than 800 people have applied to participate in it.

Most get into the delivery and distribution businesses, which require much less initial capital than a cultivation business or a dispensary.

Minor, the city administrator's assistant in charge of the permitting process, says it's too early to say if Oakland's equity program is working.

To help with upfront costs for new businesses, Oakland has started a $3 million, no-interest revolving loan program for equity participants, funded by cannabis tax revenues.

The city is also looking at providing commercial kitchen space for equity applicants who want to get into edibles and finding ways to highlight equity businesses so that consumers "can spend their dollars in line with their values."

There are other challenges, the kind New York's leaders are keeping an eye on as they craft legislation that would determine how tax revenue from marijuana sales would be used to re-invest in communities impacted by the war on drugs and find ways for people of color to get into the legal cannabis industry.

While marijuana is legal in California, there’s still a thriving illicit market. California Gov. Gavin Newsom declared that illegal grows in Northern California “are getting worse, not better," the New York Times recently reported.

Many in the industry blame the high taxes that add about 35 percent to the cost of the products.

The high taxes and regulations end up hurting the equity applicants,  said Lanese Martin of the Hood Incubator, who is also on Oakland's Cannabis Commission.

"The people taken out are the folks you're trying to help," Martin said.

Still, Oakland's equity program has served as a model for others around California and the rest of the country.

"We were hopeful people would look at our model and build upon it," Martin said.

The equity study was "extremely helpful" in convincing stakeholders to buy into the program, Martin said.

Linda Grant, the Oakland resident who is now legally selling marijuana after doing so illegally most of her life, wants those like her to profit from the legal business.

"The state don't need it," she said.

Her advice for New Yorkers if New York State starts an equity program?

Don't take the first offer that comes along. Form cooperatives and partnerships to start businesses. Don’t be shy about seeking money from investors.

That’s what she learned to do.

Grant owns a 50-percent share in three cannabis businesses – two in delivery and one in distribution.

She worked to help the investors get their businesses running, she said. Now, she’s paid as an owner and lets others handle the day-to-day operations.

“I’m 50,” Grant said. “I’ve hustled all my life. I’m tired. If these white people want to come into Oakland and work, well, go right ahead.”

She knows it's inevitable that white people will prosper in the cannabis industry. She's just glad that her city has found a way to make sure black and brown Oakland residents like her can too.


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