Oakland Cannabis Sellers, Once Full of Hope, Face a Harsh Reality

The federal prohibition also makes it difficult to obtain bank financing or small-business loans, forcing some Black social equity applicants to enter deals with investors who sometimes end up controlling the business.

Another challenge is policing. Some say the police in Oakland, at times, have not switched their mind-set from arresting cannabis dealers to protecting their legal businesses. During a wave of robberies late last year, the police never showed up to some of the crimes, business owners say. The police say a surge in crime during the pandemic has stretched their resources.

Insurance companies are also adding to the challenges. Some owners said their claims were denied even though their policies indicated they would be covered. Others said they believe they were treated unfairly during the claims process because they were Black.

“You are giving licenses to people who would struggle in any industry, but in cannabis, the deck is further stacked against them,” said John Hudak, deputy director of the Center for Effective Public Management at the Brookings Institution. “States need to do a better job adjusting for the structural racism built into the system.”

Since the initiative began in 2017, Oakland has granted cannabis licenses to 282 equity applicants and 328 non-equity applicants. But the city does not keep an ongoing tally of how many of those businesses are currently operating.

“While not a panacea, this program is a meaningful step toward embedding fairness and justice in all we do to improve conditions for communities of color,” Greg Minor, an assistant to the city administrator, said in an email. Amid the industry’s struggles, Mr. Minor said, the state recently authorized a $5.4 million grant to support Oakland’s equity program and was considering reducing the cannabis taxes.

But for Mr. Blunt, legalization has not produced the boon some might expect. Since he opened his licensed store four years ago, Mr. Blunt has yet to generate a profit.

Article source: https://www.nytimes.com/2022/03/15/business/cannabis-dispensaries-oakland.html