California Weed

Should potentially lucrative pot permits be reserved for minority communities?

For months now, Sacramento officials have been pursuing a plan to make the city a regional hub for California’s marijuana industry. They’ve approved permitting rules for industrial pot production and plotted ways to use tax revenues from marijuana to pay for city services, youth programs and policing.

Now leaders in the African-American community are trying to slow down this rush to cash in on the legalization of recreational cannabis. They came to the City Council Tuesday to ask that the city make sure minority populations victimized by disproportionate criminal prosecutions during the nation’s war on drugs get a guaranteed share of marijuana business opportunities and taxes.

Offering no specifics or timetable, the mayor and council members said they would try to do that.

The conversation was precipitated by a letter to Mayor Darrell Steinberg and the council from the California Urban Partnership, the Greater Sacramento Urban League, the Sacramento NAACP and six other organization and numerous community leaders. They sought to convince the council to hold off on planned votes Tuesday to set fees to authorize marijuana manufacturing businesses and testing programs.

“We appeal to your conscience and your heart,” Malaki Seku-Amen, president of the Sacramento-based urban partnership, a group promoting building “economic security in communities of color,” said in addressing the council. “We are concerned about the fast growth of marijuana in the city of Sacramento. We are asking you to ensure that communities of color, low income people in our city, benefit from this economic growth.”

Sacramento on April 3 began accepting applications for commercial licenses for marijuana cultivation businesses, which are expected to flourish in the city’s light industrial zones. More than 70 applications came in the first two days, and the city expects to license 200 indoor growing facilities. That comes on top of 30 existing marijuana dispensaries and the planned authorization of dozens of marijuana delivery and distribution businesses.

The community leaders’ appeal didn’t stop the City Council from voting 6-2 to move forward on establishing business permit fees, including for potential manufacturers of the cannabis concentrates popular in “vape” pens used by medicinal and recreational marijuana users.

But the advocates appeared successful in pushing the City Council to consider an equity plan for marijuana business that was inspired by efforts in the city of Oakland.

Oakland recently adopted a “race and equity” plan to reserve 50 percent of marijuana businesses licenses for people who were either jailed for marijuana convictions in the city or had lived for 10 years or more in one of 21 city police beats with disproportionate marijuana arrests.

Oakland also agreed to set aside $3.4 million in future cannabis business licensing tax fees to offer zero-interest loans for equity program applicants in marijuana start-up ventures. The city’s policies drew criticism from some industry investors, who said they feared that a racially-targeted quota system could drive other tax-revenue producing cannabis businesses out of the city.

Betty Williams, past president of the Sacramento NAACP, asked the Sacramento council to consider setting aside up to 40 percent of marijuana permits in the city for minority-owned businesses and “slow down this process to evaluate how this can be done before moving forward.” The group also urged the city to consider offering interest-free loans to cover marijuana business permit fees.

The letter to the council cited an Oakland study on unequal marijuana prosecutions, asking Sacramento officials to conduct similar research here. Even though federal drug use surveys indicate pot use is equal or higher among whites, African-Americans in Oakland accounted for 77 percent of marijuana arrests in 2015, compared to 15 percent for Latinos and 4 percent for whites.

“The reality is that certain communities have suffered from this and now this industry is booming, and we need to really understand and deal with the disparities,” said Cassandra Jennings, president of the Greater Sacramento Urban League.

Steinberg said the advocates’ appeal raised “very compelling concerns” about how marijuana enforcement practices have hurt minority communities. And he said the City Council will look to ensure that the same populations don’t face discrimination when it comes to getting licenses to operate in the legal medical and recreational marijuana industry.

“I think you raise a very interesting point: Who has an opportunity to go into this business?” Steinberg said. “Are we going to have a goal and a time table to commit to set a certain percentage (of marijuana business licenses) for minority communities and disadvantaged neighborhoods? And our answer has to be yes.”

However, council member Jay Schenirer urged that any Sacramento program avoid “a severe cap” designating a percentage of licenses for particular communities. “There are other ways we need to look at this to ensure equity,” he said.

The City Council in March voted unanimously vote to allow people convicted of marijuana crimes to petition the city manager for hearings that could permit them to work in licensed cannabis businesses in the city. The policy said those seeking to do so cannot have been convicted of any crime involving violence or distribution of pot to minors.

Under state medical marijuana law, state and local agencies may – but are not required to – deny licenses to people with felony convictions, including narcotics offenses or other crimes “substantially related” to the cannabis business. The Proposition 64 recreational marijuana initiative prohibits anyone from being denied solely for a drug conviction.

In their letter to the council, African-American community members urged that taxes and fees on marijuana businesses in Sacramento be directed to an “impact mitigation fund” that could be used to pay for “affordable housing, job training and youth development,” including anti-marijuana use education in low-income communities “most harmed by decades of marijuana criminalization.”

Schenirer cautioned the group about his own efforts to secure marijuana industry funding to support youth programs in the city through a special 5 percent cultivation tax. His local initiative, Measure Y, was defeated last June because it feel just shy of the required two-votes vote for passage.

He said the narrow defeat convinced him that it should now be up to the City Council, through its regular budget process, to decide where marijuana dollars should be spent. “I think that’s the appropriate place to have this discussion,” he said.