Business

Black Cannabis Entrepreneurs Say State’s $30 Million Fee Waiver Fund May Not Be Enough

The program creates pathways for individuals affected by the War on Drugs to enter into the cannabis industry. Potential business owners who are living at or below 60% of the Area Median Income; who were previously convicted or arrested for a cannabis-related offense; or who live in a community negatively impacted by past cannabis policies would be eligible for the program.

Published

2 years ago

December 12, 2021

Oakland Post

“There is no doubt that the War on Drugs has disproportionately harmed people of color and their communities,” said Sen. Steve Bradford (D-Gardena), who is also chair of the California Legislative Black Caucus.

By Edward Henderson | California Black Media

Alphonso “Tucky” Blunt, owner of a marijuana product store in Oakland called Blunts and Moore, says his business is located in the same zip code where he was arrested for selling weed illegally in 2004.

Now that he is legit in the business – he opened his store in a little over three years ago — Blunt says it is nearly impossible for Black and other minority-owned cannabis startups like his to make a profit in California.

“Where’s the tradeoff? I’ve been in the business for a few years and I’m still in the red. California has one of the highest tax rates on cannabis businesses anywhere. Oakland is in the top four of anywhere in the country,” said Blunt. “We also pay the most for armed guards. It costs like $25 to $30 per hour. The city requires us to have them – unlike Berkeley where they are not required. But police respond faster there.”

Blunt says the challenges cannabis businesses in the state face are many, including the fact that they have to pay federal taxes but can’t write off any expenses because cannabis is not legal on the federal level. Businesses like his also have challenges banking because of federal restrictions. Plus, criminals frequently target cannabis businesses and when they do, insurance companies are typically unwilling to pay for damage or lost products, Blunt says.

To address some of the challenges minority entrepreneurs in the industry are facing – particularly those who were victims of the War on Drugs – legislators in California have taken a number of steps to lower barriers to entry in the industry.

In 2019, Bradford authored SB 595, which established a cannabis equity fee waiver program. The Legislature passed that bill and the governor signed it into law the same year. The program was contingent on funding Bradford successfully obtained for its implementation in the Budget Act of 2021.

Right now, California is in the process of approving a $30 million fund that will eliminate business fees for some entrepreneurs entering the cannabis business in the state.

Last week, the Department of Cannabis Control (DCC) released the regulations it will follow to implement Senate Bill (SB) 166, the budget trailer bill Gov. Gavin Newsom signed into law in September establishing the fee waiver program.

The waivers go toward licensing fees for their potential businesses, which can range from $1,205 to $77,905. The DCC will start accepting fee waiver requests beginning Jan. 1, 2022.

The California Office of Administrative Law will publish the proposed regulations as being “under review” on its website: https://oal.ca.gov/. DCC will share instructions for submitting a public comment and participating in the regulatory process. The agency will also announce when the comment period, which will last five days, is open to the public.

“SB 166 is part of my continued mission for the Government to atone for the wrongs inflicted on people by supporting them with opportunities to enter and thrive in the cannabis market. I encourage anyone interested in the cannabis industry, especially equity cannabis applicants and operators, to provide comments during the short window for feedback.”

DCC Director Nicole Elliott says the state will continue to invest in opportunities to make the licensing businesses more equitable, particularly for people who were impacted by the War on Drugs.

“We know access to capital remains a persistent challenge for California’s equity applicants and licensees,” she said. “These waivers aim to address this challenge for those who need the most financial support.”

Bradford said for government to truly understand the challenges entrepreneurs are facing, they have to make their voices heard and talk about the barriers to entry they face.

“These regulations are extremely important for determining who will and will not get application, licensing, and renewal fee waivers, and the amount of help they will receive,” said Bradford. “It is vital that the Administration have an accurate understanding of people’s experiences in order to create a framework that respects them.”

Blunt says he welcomes the $30 million investment the state is making to help with licenses and other costs but entrepreneurs like him need more.

“We need a two-year tax break. We have to pay some sales taxes but the extra cannabis taxes we pay, we need the break to recover. We can save some of that money and reinvest in our businesses and have some money for security,” says Blunt. “My business makes around $5 million a year, but the money I spend on security and taxes alone is easily in the $2 to $3 million range — and I’m not counting other expenses like payroll and other operational expenses. How will we ever make a profit?”

Oakland Post

Posts by Oakland Post

Up Next

Abortion Rights in Trouble, Supreme Court Seems Poised To Play Dumb On Constitution

Don't Miss

City Attorney Settles Major Recycling Case Benefitting Oakland Ratepayers

Oakland Post

Click to comment

Bay Area

State Controller Malia Cohen Keynote Speaker at S.F. Wealth Conference

California State Controller Malia Cohen delivered the keynote speech to over 50 business women at the Black Wealth Brunch held on March 28 at the War Memorial and Performing Arts Center at 301 Van Ness Ave. in San Francisco. The Enterprising Women Networking SF Chapter of the American Business Women’s Association (ABWA) hosted the Green Room event to launch its platform designed to close the racial wealth gap in Black and Brown communities.

Published

3 days ago

April 20, 2024

Oakland Post

American Business Women’s Association Vice President Velma Landers, left, with California State Controller Malia Cohen (center), and ABWA President LaRonda Smith at the Enterprising Women Networking SF Chapter of the ABWA at the Black Wealth Brunch.

By Carla Thomas

The Enterprising Women Networking SF Chapter of the American Business Women’s Association (ABWA) hosted the Green Room event to launch its platform designed to close the racial wealth gap in Black and Brown communities.

“Our goal is to educate Black and Brown families in the masses about financial wellness, wealth building, and how to protect and preserve wealth,” said ABWA San Francisco Chapter President LaRonda Smith.

ABWA’s mission is to bring together businesswomen of diverse occupations and provide opportunities for them to help themselves and others grow personally and professionally through leadership, education, networking support, and national recognition.

“This day is about recognizing influential women, hearing from an accomplished woman as our keynote speaker and allowing women to come together as powerful people,” said ABWA SF Chapter Vice President Velma Landers.

More than 60 attendees dined on the culinary delights of Chef Sharon Lee of The Spot catering, which included a full soul food brunch of skewered shrimp, chicken, blackened salmon, and mac and cheese.

Cohen discussed the many economic disparities women and people of color face. From pay equity to financial literacy, Cohen shared not only statistics, but was excited about a new solution in motion which entailed partnering with Californians for Financial Education.

“I want everyone to reach their full potential,” she said. “Just a few weeks ago in Sacramento, I partnered with an organization, Californians for Financial Education.

“We gathered 990 signatures and submitted it to the [California] Secretary of State to get an initiative on the ballot that guarantees personal finance courses for every public school kid in the state of California.

“Every California student deserves an equal opportunity to learn about filing taxes, interest rates, budgets, and understanding the impact of credit scores. The way we begin to do that is to teach it,” Cohen said.

By equipping students with information, Cohen hopes to close the financial wealth gap, and give everyone an opportunity to reach their full financial potential. “They have to first be equipped with the information and education is the key. Then all we need are opportunities to step into spaces and places of power.”

Cohen went on to share that in her own upbringing, she was not guided on financial principles that could jump start her finances. “Communities of color don’t have the same information and I don’t know about you, but I did not grow up listening to my parents discussing their assets, their investments, and diversifying their portfolio. This is the kind of nomenclature and language we are trying to introduce to our future generations so we can pivot from a life of poverty so we can pivot away and never return to poverty.”

Cohen urged audience members to pass the initiative on the November 2024 ballot.

“When we come together as women, uplift women, and support women, we all win. By networking and learning together, we can continue to build generational wealth,” said Landers. “Passing a powerful initiative will ensure the next generation of California students will be empowered to make more informed financial decisions, decisions that will last them a lifetime.”

Oakland Post

Posts by Oakland Post

Business

Black Business Summit Focuses on Equity, Access and Data

The California African American Chamber of Commerce hosted its second annual “State of the California African American Economy Summit,” with the aim of bolstering Black economic influence through education and fellowship. Held Jan. 24 to Jan. 25 at the Westin Los Angeles Airport Hotel, the convention brought together some of the most influential Black business leaders, policy makers and economic thinkers in the state. The discussions focused on a wide range of economic topics pertinent to California’s African American business community, including policy, government contracts, and equity, and more.

Published

3 days ago

April 20, 2024

Oakland Post

Toks Omishakin, Secretary of the California State Transportation Agency (CALSTA), answers questions from concerned entrepreneurs frustrated with a lack of follow-up from the state. January 24, 2024 at the Westin Los Angeles Airport Hotel, Lost Angeles, Calif. Photo by Solomon O. Smith

By Solomon O. Smith, California Black Media

The California African American Chamber of Commerce hosted its second annual “State of the California African American Economy Summit,” with the aim of bolstering Black economic influence through education and fellowship.

Held Jan. 24 to Jan. 25 at the Westin Los Angeles Airport Hotel, the convention brought together some of the most influential Black business leaders, policy makers and economic thinkers in the state. The discussions focused on a wide range of economic topics pertinent to California’s African American business community, including policy, government contracts, and equity, and more.

Toks Omishakin, Secretary of the California State Transportation Agency (CALSTA) was a guest at the event. He told attendees about his department’s efforts to increase access for Black business owners.

“One thing I’m taking away from this for sure is we’re going to have to do a better job of connecting through your chambers of all these opportunities of billions of dollars that are coming down the pike. I’m honestly disappointed that people don’t know, so we’ll do better,” said Omishakin.

Lueathel Seawood, the president of the African American Chamber of Commerce of San Joaquin County, expressed frustration with obtaining federal contracts for small businesses, and completing the process. She observed that once a small business was certified as DBE, a Disadvantaged Business Enterprises, there was little help getting to the next step.

Omishakin admitted there is more work to be done to help them complete the process and include them in upcoming projects. However, the high-speed rail system expansion by the California High-Speed Rail Authority has set a goal of 30% participation from small businesses — only 10 percent is set aside for DBE.

The importance of Diversity, Equity and Inclusion (DEI) in economics was reinforced during the “State of the California Economy” talk led by author and economist Julianne Malveaux, and Anthony Asadullah Samad, Executive Director of the Mervyn Dymally African American Political and Economic Institute (MDAAPEI) at California State University, Dominguez Hills.

Assaults on DEI disproportionately affect women of color and Black women, according to Malveaux. When asked what role the loss of DEI might serve in economics, she suggested a more sinister purpose.

“The genesis of all this is anti-blackness. So, your question about how this fits into the economy is economic exclusion, that essentially has been promoted as public policy,” said Malveaux.

The most anticipated speaker at the event was Janice Bryant Howroyd known affectionately to her peers as “JBH.” She is one of the first Black women to run and own a multi-billion-dollar company. Her company ActOne Group, is one of the largest, and most recognized, hiring, staffing and human resources firms in the world. She is the author of “Acting Up” and has a profile on Forbes.

Chairman of the board of directors of the California African American Chamber of Commerce, Timothy Alan Simon, a lawyer and the first Black Appointments Secretary in the Office of the Governor of California, moderated. They discussed the state of Black entrepreneurship in the country and Howroyd gave advice to other business owners.

“We look to inspire and educate,” said Howroyd. “Inspiration is great but when I’ve got people’s attention, I want to teach them something.”