.‘Time, Paperwork, Letdowns’

Oakland’s cannabis equity program hurts more than it helps

On a warm, spring day in March, I took my first tour of Rose Mary Jane, a Black-women-owned dispensary on Harrison Street which has since closed due to burglaries and increased rent prices. The general manager, Sway Macaluso, gave me a tour of the then-popular dispensary and cannabis bar.

The entrance of the dispensary was adorned with green plants, and its walls were covered with photos of local cannabis entrepreneurs. At the front counter, where customers bought their weed, a bright, neon-pink sign was centered with the words: “Rose Mary Jane.” I felt like I was in a Nicky Minaj music video.

Rose Mary Jane was once an equity-owned dispensary, and it prioritized selling products made by other members of Oakland’s cannabis equity program. The dispensary’s closure in August has reminded the local community of the strenuous nature of operating a cannabis business—and has also highlighted the pitfalls in Oakland’s cannabis equity program. Rose Mary Jane consistently promoted the equity program in the short year-and-a-half that it operated.  

Oakland’s equity program provides cannabis permits, grants and interest-free loans to East Bay residents who qualify. It also decreases fees for applicants who have a prior drug conviction, or who have lived for at least 10 years in an overpoliced part of Oakland. An equity applicant can join the program as a cultivator, manufacturer, distributor, dispensary or even a delivery service.

Soon after the City of Oakland enacted the program in 2017, former Gov. Jerry Brown signed the Cannabis Equity Act to ensure that equity programs would be greenlit throughout California. Here in Oakland, some local businesses have taken charge of creating a more equitable environment for people who have been historically criminalized for selling weed.

“Being able to consume cannabis to take the edge off, hike and be focused. I don’t think that folks necessarily believe you can do that,” said Alicia Holcomb, the founder of MAAT Apothecary, a small cannabis company in East Oakland. “You can be an entrepreneur and utilize the plant in order to reach these stages in your development throughout your day.”

Holcomb has been a part of Oakland’s cannabis equity program since it first began six years ago.

Her company makes weed honey, which, according to Holcomb, helps consumers regulate their doses and allows them to take cannabis discreetly. She said that while she faces challenges operating a weed business, she’s glad the equity program allows her the chance to operate in an industry that has been largely closed off to people in her community.

“There is a steep incline and a steep learning curve,” Holcomb said. “This is a new industry; it’s developing.”

Although Holcomb is grateful, she noted that the city of Oakland often takes too long to distribute the resources that cannabis companies need to start production.

“Time, paperwork, letdowns,” she said. “It’s really hard to be able to scale a business with so many different moving parts.”

Some equity applicants have also been asked to pay back their loans to the city of Oakland before they have even made a profit, according to a report published by The Oaklandside. She also said that high taxes and permit fees often push small cannabis businesses out of the industry altogether.

“A lot of people think that because you are a cannabis business, you are rolling in money,” she said. “I don’t think people considered that the industry would develop this way. Or that there would be so many points of taxations and fee schedules, to where your profit margin becomes tinier and tinier each year.”

For equity applicants like Rachaude Crawford, issues arose soon after beginning the licensing process with Oakland’s equity program in 2019. Crawford and his mother officially started their weed company, Da Bomb, in 2021, as soon as they received their cannabis license from the city of Oakland.

When they first began the equity program, they became a part of the “incubator model,” an aspect of the program that provides incentives to larger cannabis companies that can provide a free space for members to operate. The participating incubator must provide a production site for three years rent-free, and the space needs to be a minimum of 1,000 square feet. But when Crawford’s company was taken in by an incubator, he felt like his business was treated unfairly.

“Where we’re located, it’s a rather large location,” Crawford said. “There are a lot of cannabis companies there, but they’re not all the same.”

Crawford’s company was charged the same amount of utility bills as the others—even though his operation costs were much less.

“They estimate the electricity cost for the year,” Crawford said. “Then, if the electricity cost exceeds that, then at the end we just end up with a whopping bill. Like an extra $2,000. It doesn’t matter, you all average the same.”

Crawford said that the companies in the building don’t usually have a choice in what kinds of equipment the incubator purchases for the facility, so utility bills could increase without them even knowing.

“If they do something that causes more power to be consumed, you’re also tasked with that,” he said.

According to a letter from an attorney with Oakland’s Equity Technical Assistance Program, similar issues arose with Oakland business Eco Cannabis, where the Eco Cannabis incubator overcharged its equity members on utility payments. Some of their equity applicants had made utility payments that did not show up on Eco Cannabis’ records. Mistakes like this are actually pretty common.

Greg Minor, who works as the deputy director of economic and workforce development at the city of Oakland and helped launch the cannabis equity program, has seen firsthand how equity applicants have been hurt in the last few years. Most of the problems, he said, are due to little oversight over how the program operates.

“Cannabis equity programs don’t exist in a vacuum,” Minor said. “Everything that happens for the cannabis industry as a whole is gonna be reflected in our cannabis equity program, if not disproportionately so.”

The city of Oakland is hopeful it can fix some of the program’s flaws in the near future. Minor notes that because of support from the state, including $6.5 million dollars in funds allotted to the equity program in 2020, the city of Oakland will be able to support equity businesses that are struggling financially.

“We’ve started grant programs a couple of years ago, in addition to loan programs using state funding,” he said. “One of the ideas that we’re gonna start doing later this year is supporting equity businesses holding events.”

But even the city’s support can’t stop the huge uptick in dispensary burglaries in Oakland that have harmed equity and non-equity businesses alike. The increase in burglaries has been attributed to economic hardship during the pandemic and the notion that cannabis shops have a lot of cash on hand. Near the end of 2021, 25 Oakland dispensaries reported being robbed. These dispensaries stated they suffered more than $5 million dollars in losses from the break-ins. I asked Minor how these burglaries have affected equity-owned businesses.

“If we have a rise in burglaries of businesses and [in] people targeting cannabis businesses, that’s gonna impact equity applicants disproportionately, because they’re gonna have to pay for extra security costs or have to rebuild their business after it’s been broken into,” he said.

Rose Mary Jane was one of several Bay Area dispensaries that experienced a burglary in the last few years. In March, a few weeks after the dispensary celebrated its one-year anniversary, about 15 to 20 people robbed and vandalized the shop.

Sean Miller, the CEO of Rose Mary Jane’s parent company, Origins Tech, and one of the three owners of the store, along with Oakland activist Cynthia Carey-Grant, told KRON4 that Rose Mary Jane experienced eight break-in attempts in 2023. The loss of products and vandalization amounted to $200,000 in damages for the dispensary.

Sway Macaluso, Rose Mary Jane’s former general manager who has worked in cannabis for more than 15 years, said that Oakland police have not been supportive when it comes to dispensary break-ins, and often assume that dispensaries have enough money to pick themselves up after they fall.

“It’s not OK, and it’s not something that we have on hand,” she said. “A lot of us, especially in the equity sector, are struggling, trying to survive our day-to-day operation and create a safe place for our community so that people who need plant medicine can come and get it from us.”

3 COMMENTS

  1. Rose Mary Jane was a nice place and they were robbed a second time in July, I’d imagine this is what pushed them to close. This is why we can’t have nice things.

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  2. The core idea of the equity licenses seemed wonderful–help people arrested and imprisoned on bull___ charges. But legal businesses are much harder to manage than dealing dope out of your house, and the legal cannabis industry is hugely stressed by its legal-here-illegal-there character. You can’t ask a struggling legal cannabis store to mentor a second store managed by inexperienced hopeful entrepeneurs; they have their own problems just staying afloat.

    I think it would be better to just help people get educations and jobs after their records are cleared.

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  3. Oh, dear. Just another deception that “anyone” who “qualified” would be able to do a marijuana business in Oakland. It was clear from day one that only mister and misses moneybags would be able to have a thriving marijuana business in Oakland.

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