Melina Brown (left), Maisha Bahati (center) and Bryan Brown of Crystal Nugs.
C a n n a b i S
A landmark for cannabis equity Sacramento City Council approves 10 new dispensaries for minority owners by Ken Magri
In a landmark decision, the Sacramento City Council unanimously voted to add 10 new storefront cannabis dispensaries over the next two years and award the new licenses to applicants who participated in the city’s social equity program. Allowing five storefront dispensaries in 2020 and another five in 2021 represents a one-third increase, bringing the total number of Sacramento dispensaries to 40. The current cap of 30 limited opportunities for those who went through the city’s Cannabis Opportunity, Reinvestment and Equity program. “The work is never done, certainly not done to address equity, but this is a significant advance,” Mayor Darrell Steinberg said after the Oct. 13 vote. “There were some who said it should only be two or three [dispensaries],” he said. The council’s action capped a three-year effort to expand the number of dispensaries, while making progress toward its goal that at least 51% of ownership comes from CORE participants. Such social equity programs fulfill one of the promises of Proposition 64, the 2016 statewide ballot measure that legalized marijuana for adult as of Jan. 1, 2018—to correct injustices from the war on drugs and “reduce barriers to entry into the legal, regulated market.” Sacramento’s CORE program started in 2018 to help participants who have previous cannabis convictions and come from neighborhoods affected by the war on drugs. It is administered by the Greater Sacramento Urban League and the Sacramento Asian-Pacific Chamber of Commerce. Participants in the program receive technical assistance when trying to start a cannabis business. License fees and some overhead costs are temporarily waived, giving the new business time to establish a foothold in the industry. Under the new ordinance, 25% of all 34
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Sacramento dispensaries will be minority participants, who are waiting for us owned. The permits will require at least to release this process, for them to be 51% ownership and profit sharing by involved, because what happened before CORE participants for at least 10 years. them isn’t correct,” she said. Malaki Seku-Amen, CEO of the Ashby was referring to the problem California Urban Partnership, reminded with dispensary ownership transfers that the council that it had gone only halfway allowed the monopolization of several towards its goal for 50% minority businesses, which violates an ownership ownership of all Sacramento dispensarule set out by the city. It was discovered ries. Del Paso Heights was set aside last year that two individuals granted as a special planning district dispensary licenses in 2011 allowing dispensaries later broke the rule by to be located within acquiring seven more shopping centers dispensaries with “It’s a huge and along the new business opportunity for those Arden Way partners, and corridor. renaming them who have been most Other public under the affected by the war on drugs, comments Kolas brand. during the Oct. In and definitely a step in the 13 council response, right direction for social meeting were in October concerns that 2019, the equity here in Sacramento.” veterans were City Council Maisha Bahati, co-owner, being left out of placed a 120-day Crystal Nugs the process, that a moratorium on lottery system would any new ownership be the fairest way to transfers, but nothing award licenses and that 10 else was done to correct the dispensaries at once were too many. rule violation. “We are not enforcing But council members Rick Jennings, it, and we need to figure out a way to do Steve Hansen and Larry Carr, who that,” said Ashby. pressed for 10 dispensaries, were particuShe would have preferred to weed out larly excited to approve the expansion. current owners who broke the rule and “I don’t want to live in a city where I reissue those freed-up licenses to CORE can’t say we have one African-American participants. Ashby said she fears that by dispensary in my city,” said Jennings, simply adding more storefronts, the local emphasizing his “150% yes” vote. “I am cannabis market could soon become happy that 10 permits will be issued at oversaturated. the same time.” Who will get new licenses? “I am excited that there is a unanimous vote for the first time ever on a The process of awarding the 10 cannabis item,” Hansen added. new licenses will be conducted by Mayor Pro Tem Angelique Ashby Sacramento’s Office of Cannabis made the vote unanimous, despite having Management. Director Davina Smith told reservations about more dispensaries. council members that an RFQ (request “It’s time to stop punishing the CORE for quotation) process will be conducted,
Photo by Chris Loftin
rather than using a lottery system. “The submittals will be evaluated by neutral, unbiased individuals who have relevant knowledge and expertise, and are not involved with the cannabis industry in Sacramento, and are not employed by the city,” said Smith. CORE participants were given a chance to prioritize the evaluation criteria through a survey they completed afterwards. Smith reported to council members that the 81 respondents put extra importance on CORE participation, business skills and demographic background, and the least importance on letters of recommendation or memberships in industry organizations. “It’s been a long time coming,” said Maisha Bahati, owner of Crystal Nugs cannabis delivery and a CORE participant. “It is a huge opportunity for those who have been most affected by the war on drugs, and definitely a step in the right direction for social equity here in Sacramento.” Bahati, who was accepted into CORE in 2019, and her partner Melina Brown opened Crystal Nugs as a delivery service. “The program has presented Crystal Nugs with a multitude of opportunities, and has definitely contributed to our sustainability and growth,” Bahati said. CORE waived a $9,700 annual business operating permit for the first two years, and granted $25,000, which Crystal Nugs used to buy three delivery vehicles. Like many delivery companies, they have done well during the COVID-19 pandemic. Now, they hope to transform their business into Sacramento’s first Black-owned storefront dispensary. “Though there are many ways to participate in the local cannabis industry—including cultivation, manufacturing, testing and delivery—the storefront dispensary is the most sought-after business model,” said the city’s Smith. Ω
