The struggle to enter California’s cannabis market: ‘So much heartache, so much pain’

Linda Grant sold weed in the streets of East Oakland for 35 years before California legalized marijuana in 2016. She’s been “going through hell” trying to open a licensed business ever since.

Five years and two frustrating partnerships later, Grant still has to get a loan to pay for a business storefront before she can even apply for a license to operate. “It’s just ridiculous,” Grant said. “So much heartache, so much pain.”

The process is daunting: business plans, tax returns, seed money. Even with state programs designed to close the gap, experts and advocates say the cost of entry and long list of requirements are still keeping people of color and low-income applicants from entering the state’s lucrative legal market.

“We allowed people who already have money and position to jump on this new business opportunity,” said Dr. FloJaune Cofer, senior director of policy for the nonprofit Public Health Advocates. “And the people who were underground are still underground.”

To reduce the barriers to entry, California’s cannabis law, Prop. 64, created equity programs to give licensing priority to members of low-income and minority communities disproportionately affected by the war on drugs. The programs receive 20 percent of state tax revenues from marijuana sales.

In Oakland, Black people were 25 times more likely to get arrested than whites, according to a report analyzing California marijuana arrest data from 1996-2016 by Public Health Advocates. That’s despite Blacks making up less than 15 percent of illegal drug users. The city had the third-highest disparity rate in the state, the report found, after Sacramento and Palo Alto.

“It was terror in East Oakland,” recalled Grant, 51, who was briefly incarcerated for possession in the 90s, a conviction since dismissed.

But equity programs are administered locally, and experts say their degree of success varies greatly from city to city, depending mostly on community activism. A handful of success stories, such as the Black-owned dispensary Farmacy Berkeley, arose from Bay Area equity programs, but state officials say it’s too early to tell whether the programs have helped shape the racial makeup of the legal industry.

Even through an equity program, breaking in isn’t easy. A license can cost between $5,000 and $100,000 a year, and that’s after start-up costs and investments.

Published: July 06, 2020

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