.Oakland’s Equity Applicants Are Getting Stronger Together

After a year plagued with challenges and slow progress, equity applicants are learning to manage expectations and lean on others for resources and support.

Blair Augusté leads me through the brightly lit hallways of the East Oakland space she shares with her general partner, cannabis distribution company Alta Supply. After showing me their ultra-modern conference room flanked by hanging framed photographs of cannabis flowers and concentrates, and later the small shared kitchen area, we turned the corner into her office.

Augusté is an equity applicant, founder, and CEO of Vista Distribution, a small distribution company that provides statewide transportation, delivery, storage, lab testing, and tax collecting services to cannabis companies. San Francisco-based equity permitholder, SF Roots, a lifestyle brand with its own line of cannabis flower, pre-rolls, apparel, and accessories, is currently Augusté’s single client. As we entered her office, Augusté introduces me to SF Roots employees completing their shipment in an adjoining stockroom. “I’m humbled that we closed out the first legal year together,” Augusté said warmly. “We’re paving the way for other equity applicants in the largest cannabis market in the world.” She added with a laugh, “We talk about having a vacation in 2019.”

Augusté’s journey into the industry began well before Oakland’s adoption of medical cannabis under Proposition 215 years ago, when the East Oakland native became caregiver to her mother who was in hospice with a rare form of cancer. After medical cannabis provided her mother with what Augusté referred to as a “humane way” of transitioning into end of life — her mother died in 2003 — she felt she’d found her calling. A holistic healer, doula, and yoga instructor, Augusté has worked as a dispensary budtender, cultivator, head cannabis flower buyer, and Oaksterdam University educator. She became a cannabis license holder after almost a year of advocating at city council meetings for a fair and equitable cannabis industry.

Yet during the first year of California’s volatile transition from a medical to a recreational cannabis market, Augusté spent much of 2018 just trying to keep afloat. She said that as an equity applicant in Oakland, she expected to get more “one-on-one” mentorship. “I hadn’t run a full-scale wholesale distribution company myself before,” she noted.

It turned out that having lots of cannabis experience wasn’t enough to prepare Augusté for the daily management of a regulated business. “In terms of compliance, taxation, laboratory testing — that was all new and fairly ‘learn on your own,’” she said.

Part of Augusté’s learning curve also meant figuring out how to maneuver through the state’s regulatory instability. After a promising launch in the first quarter of last year, momentum stalled when California’s new regulations officially went into effect in July. Cannabis brands struggled to achieve compliance under the new state laws, leaving Vista with no product to distribute for over a month, “which, for a small startup, is crippling,” Augusté wrote in an email. She went from distributing five brands to one.

But that brand, SF Roots, has become a strong ally. “She was working incredibly independently as well,” said Augusté of SF Roots CEO Chelsea Candelaria, “so we kind of just joined forces as two Brown women in the industry earning our stripes. But also, knowing that we had to support each other, we had to vent to each other, we had to come up with realistic solutions.”

Their meetings evolved into self-care focused coffee dates, yoga classes, and eventually resource sharing. The two female entrepreneurs also recognized that the self-advocating didn’t end once an equity permitholder gained a general partner. “It’s great to dream but you have to be realistic,” Candelaria said. “It’s the job of equity applicants to push the city and be like, ‘You guys said we need this. We don’t. We need this,’ so we have to advocate for ourselves.”

For Augusté, this realization has made a huge difference. “What we’ve talked about is that if we don’t move through this process literally joining forces together, then other equity teams are going to have it just as hard, if not harder,” she said.

Oakland’s equity program strives to reduce barriers of entry into the cannabis industry for people most impacted by the war on drugs. The program requires that at least half of all permits be awarded to equity applicants, and gives permitting priority to general partner applicants who incubate equity applicants and provide them with a minimum of three years’ free rent on at least 1,000 square feet of space. (Alta Supply is Augusté’s general partner and incubates her business.) But because the qualifications don’t define a process for incubating applicants, and there’s been little to no marketing of the equity program and its requirements, both applicants and their general partners have had to figure it out as they go.

“I definitely know that there are folks who went out, applied, and got their space, and they’re like, ‘OK. Well, I don’t have any money to build this out,’” said Amber Senter, co-founder of Supernova Women, an organization centered on helping women of color become stakeholders in legal weed. “This is still a business, and you have to be prepared. It was not part of the deal where the general partner was supposed to basically hook you up with a bunch of product, hook you up with a business, and tell you how all of this is run.”

Senter is incubating multiple equity companies, including a delivery service in which she’s partnered with Oakland Cannabis Business Council co-chair Adolph Ward. “I’ve just been trying to leverage benefits that I get in the industry to help him, too,” she said of the resources she’s been able to share. “For instance, I get special terms. I have a lot of relationships with different vendors in the industry, so they’ll extend to me 90-day terms — I give those things to him.”

Senter is in the unique position of understanding both sides and believes that in order for equity programs to work, cities must do a better job of raising awareness about available resources. Equity applicants must also educate themselves about what they’re getting into, “not just from the cannabis side but on the business side as well,” Senter said.

“You gotta be a hungry entrepreneur. You gotta get into this knowing that there are certain expectations and things that you have to have just because you’re opening a business,” she added. “Even though you’re a social equity business and they’re working on leveling the playing field, the playing field is tough. That’s just how it is, so you gotta have some capital. Nobody goes into thinking they’re going to open a business and they have zero dollars.”

It’s also in all general partners’ best interests to support their equity partners, especially now that the state will be no longer be issuing temporary licensing. “It’s going to be really tough, if our social equity partners fail, to replace them, so that means we can’t let them fail,” Senter said. “We’ve got to help them as much as we can, give them the resources that we have access to, just be decent human beings — that’s the whole point!”

In addition to managing the daily needs of her business, Augusté is working to finish her business plan and profit-and-loss statement while also completing the process with the Oakland equity loan program. If successful, she could receive a zero-interest loan from the city for up to $50,000, while having a fleshed out business plan and financials means she’ll be prepared to seek private investment. When reflecting on last year’s struggles, Augusté remains hopeful.

“When you’re doing something for the first time, you don’t expect necessarily what’s coming at you. You don’t necessarily know how to prepare for it all, so you go through it and you adjust as you can,” she said. “Yes, there are hurdles and there are obstacles, but there are also huge benefits. If you stick with it and continue to show up, you can actually build a sustainable company and you can actually penetrate this industry that has been largely dominated by white males.

“I’m incredibly grateful to the city of Oakland for creating this incubator program so that we can even get established.”


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