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Oakland, Calif., Makes Changes to Cannabis Industry Equity Rules

Under new cannabis industry rules in Oakland, California potential equity canna-business operators must be city residents for at least 10 of the last 20 years, and their income must be below 80 percent of the city’s average median income San Francisco Gate reports. The residency requirement is part of a larger set of regulations aimed at bringing equity to the sector and reparations to those who were disproportionately policed for cannabis crimes in recent decades.

Lawmakers also struck down a plan to give half of the city’s cannabis permits to individuals jailed for cannabis convictions in the last 20 years or to those who lived in areas with high concentrations of cannabis arrests.

Instead, the permits will be issued in two phases. The first phase still reserves half of the city’s licenses for equity applicants, providing them with technical help and zero-interest business loans. Phase one will end when the assistance program, funded by cannabis industry tax revenues, hits $3 million. Phase two will open the licenses to any qualified applicants.

Current operators who are not considered equity applicants have until Jan. 1 to obtain their permits or they will be forced to shut down – the equity rules will not apply to the eight dispensaries presently operating legally in the city.

The plan was met with resistance by some local operators. Dan Grace, who runs Dark Heart Nursery, said he will have to close the business under the new regime, although he supported efforts to establish equity in the sector.

“We’re sitting here with millions of dollars of investments, millions paid in taxes to the city and 60 local employees. And we’re going to have to shutter our doors,” he said in the report. “It certainly wouldn’t be fair to characterize us as outsiders. We’re all on the same side and the same page in terms of the disparity and the war on drugs and its impact on black and brown communities. (But) we feel the blame is being misallocated.”

Carrol Fife, an advocate for the equity laws, applauded the City Council decision.

“Black folks built this city and we demand ownership in the industry,” she said. “We’re watching the end of an empire… And the part that we need to do to make sure that happens is have that economic base. We do that as owners, not as workers.”

Councilman Dan Kalb indicated that the council might reconsider the residency requirements.