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Board Of Supervisors Unanimously Approves Cannabis Equity Legislation Introduced by Mayor London Breed

Legislation aims to bolster the City’s Cannabis Equity Program and further support cannabis business owners

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On Tuesday, the Board of Supervisors unanimously passed legislation introduced by Mayor London N. Breed to enhance the impact of the City’s Cannabis Equity Program and support all cannabis businesses in San Francisco. The legislation builds on the Program’s original goal to combat disparities in the cannabis industry by establishing a social equity program in San Francisco. The Cannabis Equity Program, which launched in 2018, was created to lower the barriers to cannabis licensing and provide workforce opportunities to those who were hit hardest by the War on Drugs.

The legislation modifies the permit process and creates new processing priorities in the Office of Cannabis to increase opportunities for prospective equity businesses. The legislation also provides greater ownership flexibility for cannabis businesses and preserves equity commitments in the program.

“As San Francisco works to recover from COVID-19, it’s important that we support small businesses, including our cannabis industry,” said Breed. “This legislation helps us make sure the program continues to achieve its goals and ensure that cannabis business owners are supported and have the resources they need to be successful in San Francisco.”

Since the establishment of the Cannabis Equity Program, 94 Equity Applicants have applied for permits to operate cannabis businesses in San Francisco. To date, San Francisco has issued 36 permits to equity cannabis businesses, including permanent and temporary permits. In addition to issuing permits for businesses, San Francisco’s Office of Cannabis administers grants for Equity Applicants, who are individuals that meet criteria based on residency, income, criminal justice involvement, and housing insecurity.

These grants, funded by the Governor’s Office of Business and Economic Development (GO-Biz) and the Department of Cannabis Control, can be used for start-up and ongoing costs. San Francisco has received approximately $6.3 million in grants from GO-Biz and BCC. To date, the City has approved funding requests for 45 grantees, ranging from around $50,000 to $100,000 each, and nearly $3 million has been disbursed. The remaining grant funds are in the process of being redistributed to equity businesses.

The legislation creates measures to ensure the cannabis industry in San Francisco continues to support communities that have historically been harmed by the War on Drugs.

Specifically, the legislation:

  • Prioritizes Cannabis Equity Applicants who are sole proprietors for permit processing
    • Equity Applicants will continue to receive top priority
    • Non-equity owners who support Equity Applicants through shared manufacturing will also receive heightened priority
  • Shortens the time period for a transfer of more than a 50% ownership interest in a Cannabis Business from 10 years to five years, giving businesses more flexibility to grow
  • Requires that cannabis businesses make additional social equity contributions if they seek to reduce the equity applicant’s ownership interest by 20% or more
    • These commitments include opportunities to provide hiring, training, and mentorship and provide other forms of support to cannabis equity businesses or local organizations

“Being the First Latina-owned cannabis dispensary owner/CEO of Stiiizy Union Square feels surreal,” said Equity Permit holder Cindy De La Vega. “My grand opening was Oct. 9, 2020, during a very difficult time for all of us, and especially for areas like Union Square. I am grateful for the San Francisco Equity Program and proud to be permit No. 11. I look forward to using my opportunity to show others that the San Francisco Equity Program does work and should be the blueprint for others to bring to their cities.”

“I’m grateful to the City and the State for this opportunity,” said Ali Jamalian, founder and CEO of Kiffen LLC and Equity Permit holder. “Thank you to the Office of Cannabis for standing up this Pilot Program. The money is incredibly helpful and allows me to scale my business during a difficult time. I’m hopeful that all eligible equity applicants will take advantage of the opportunity.”

The cannabis industry in San Francisco is important for the City’s economic recovery from the COVID-19 pandemic. Cannabis businesses have created jobs and provided local San Francisco residents with meaningful access to income, as many in the City have worried about employment. Over the past year-and-a-half, 17 new equity cannabis businesses have opened, each creating local job opportunities and generating sales tax revenue to fund other social services and programs. During this same time, approximately 75 cannabis businesses also operated with temporary permits, and an additional 38 businesses operated as medical cannabis dispensaries. San Francisco’s cannabis businesses employ approximately 70 local residents through the City’s First Source Hiring Program.

“Thank you to Mayor Breed for strengthening social equity and creating more economic opportunities to those hurt by the War on Drugs,” said Marisa Rodriguez, director of the Office of Cannabis. “Mayor Breed’s legislation ensures that there will continue to be a legacy of equity in the City for years to come.”

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California Warns Businesses, Landlords Using Felonies and COVID-19 to Discriminate

So far, the state has sent more than 500 notices to businesses informing them that they have violated protections put in place to protect people seeking work.  

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The California state government has been reminding businesses across the state that it is illegal to discriminate against job applicants because of they have committed felonies or misdemeanors in the past.

Authorities in Sacramento have also taken steps to make sure businesses do not use COVID-related restrictions to deny entry to customers they do not want based on race or other factors.

So far, the state has sent more than 500 notices to businesses informing them that they have violated protections put in place to protect people seeking work.

“The California Department of Fair Employment and Housing (DFEH) announced a new effort to identify and correct violations of the Fair Chance Act, a pioneering state law that seeks to reduce barriers to employment for individuals with criminal histories,” a statement the DFEH released last week reads.

The Fair Chance act, which took effect on Jan. 1, 2018, was written to increase access to employment for Californians with criminal histories in an effort to reduce recidivism, among other goals. Employers with five or more employees are prohibited from asking a job candidate about conviction history during the hiring process or when advertising a vacancy.

The DFEH says it is implementing new technologies to conduct mass searches of online job applications that include unlawful statements. For example, some businesses explicitly state in hiring advertisements that they would not consider applicants with criminal records.

“Using technology to proactively find violations of the state’s anti-discrimination laws is a powerful strategy for our department to protect Californians’ civil rights,” said DFEH Director Kevin Kish. “DFEH is committed to preventing employment discrimination through innovative enforcement actions and by providing clear guidance to employers.”

DFEH also released a toolkit to aid employers in adhering to the Fair Chance Act guidelines. The toolkit includes sample forms and guides that employers can use to follow required procedures; a suggested statement that employers can add to job advertisements and applications to let applicants know that they will consider individuals with criminal histories; answers to frequently asked questions (FAQs) about the Fair Chance Act and an informational video that explains the Fair Chance Act.

In addition, DFEH plans to release an interactive training and an online app in 2022.

The DFEH also released guidelines for businesses that will be implementing COVID-19 related entry restrictions to protect against discrimination based on race, sex, religious background and nationality.

While businesses have been encouraged to stay vigilant with mask mandates and vaccination verification for entry, the DFEH says it has also found it necessary to preemptively address refusal of entry that could be racially motivated masked as a COVID precaution.

“As Californians navigate the COVID-19 pandemic, the Department of Fair Employment and Housing has provided guidance to protect civil rights and mitigate risk of COVID-19 transmission in employment, housing, healthcare, and, in our guidance released today, businesses open to the public,” said Kish. “We can and must uphold civil rights while simultaneously disrupting the spread of COVID-19.”

DFEH encourages individuals to report job advertisements in violation of the Fair Chance Act or other instances of discrimination.

DFEH is also encouraging the public to report housing ads that include discriminatory language that exclude certain racial groups, immigrants, people with felonies, applicants with Section 8 or HUD vouchers; etc.

Visit the DFEH website to file complaints.

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Oakland Co-op Buys Historic Esther’s Orbit Room Space

The revitalization of Esther’s, and EB PREC’s mission, has a deep personal connection for Session, EB PREC’s executive director and a Black, third generation West Oaklander who has struggled to keep her childhood home.

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Noni Session, of The East Bay Permanent Real Estate Collective, stands outside the legendary Esther's Orbit Room on 7th Street in West Oakland, whose doors had been closed for about a decade. Photo by Zack Haber on October 12.

“It’s like life just stopped here,” said Noni Session, as we stood inside a large dusty room on Seventh street in the Lower Bottoms neighborhood of West Oakland on Indigenous People’s Day. The black, sparkly ceiling emitted a celestial vibe. Rows of liquor bottles sat partially full behind a 20-foot wooden bar while vinyl ’70s style stools rested in front. Gentle yellow light was omnipresent. A calendar opened to May 2010 hung in front of a mirror.

Words on a colorful but faded sign out front showed this place was once “Esther’s Orbit Room,” a vibrant cultural hub for Black Oaklanders that stayed open for about 50 years before it shuttered its doors shortly after its owner, Esther Mabry, died at age 90 in 2010. On September 30, the East Bay Permanent Real Estate Cooperative (EB PREC) closed on purchasing this space. They plan to revitalize it as an extension of their overall mission to help Black, Indigenous and people of color remain and thrive in the East Bay.

The revitalization of Esther’s, and EB PREC’s mission, has a deep personal connection for Session, EB PREC’s executive director and a Black, third generation West Oaklander who has struggled to keep her childhood home. In the ’80s she and her father stopped at Esther’s regularly before they would go fishing at a nearby pier. At that time, it wasn’t just a bar and restaurant but also a shop where her father could buy bait and she could get a treat.

Memories of Esther’s Orbit Room are still alive in the neighborhood. As Session and I talked, we were fortuitously interrupted two separate times by Black, long-term residents who just happened to be passing by and noticed the open door. They both briefly shared fond recollections of the place, and excitedly asked about the reopening. One of these people was 60 year old Pamela Brown.

“[Esther’s] was a happy place,” Brown said. “There were not that many places Blacks could go and be comfortable, but that was one of those places.”

Brown remembers Esther’s always being packed in the ’70s and ’80s and that “the vibe was just awesome and friendly.” She loved the southern comfort food they served: greens, pork chops, black eyed peas and hamburgers. Brown’s uncle, Nathaniel Harrison, remembers it being a great place to socialize around that time and that people were always dancing to the jukebox. Although Brown and Harrison were too young to experience it, legendary musicians like BB King, T-Bone Walker and Ike & Tina Turner performed at Esther’s in the 60s.

As I asked Session about what EB PREC’s revitalization project could look like, she told me about dreams she’s been having lately that place her inside Esther’s and wake her in the night to visions of “old school, Black church mixed with afro-futuristic aesthetics.” While several specific design ideas interest her, like installing colorful stained glass window art and putting a mural up of Maasai people walking across planets, she is excited that there is still a lot of uncertainty about the space. That uncertainty exists because its re-creation will be a massive collaboration involving many people who aren’t even in the EB PREC collective yet.

How EB PREC Works

Session is just one cog in a wheel that keeps EB PREC spinning. Well over 400 people currently form the collective in a complex process of communal ownership. While Esther’s will be EB PREC’s first commercial business, it’s not their first project. In 2019, and 2020, they purchased two East Bay homes that currently house 13 resident collective members, almost all of whom are BIPOC.

These residents all pay less than $900 per month toward costs required to secure and maintain the homes. At the end of the year, residents can get paid back any surplus if their payments exceed these costs. It’s all part of EB PREC’s process of replacing landlords with communal ownership and permanently taking housing and land off the speculative market in order to keep it affordable.

“There’s no supply and demand issue when it comes to housing; the demand comes from the demand for investment assets,” said Ojan Mobedshahi, EB PREC’s Finance Director. “Our move is to de-commodify land and we never consider putting it back on the market to profit from it.”

One way EB PREC has raised the capital to make these affordable homes accessible and the Esther project possible is by also including community owners in the collective who live in the area and each pay $10 a week, a year, or a month, depending on what they can afford. The community owners offer feedback and guidance on EB PREC’s projects and also have a direct role in electing some of EB PREC’s board members.

Individual investors also play a crucial role in EB PREC by buying shares of the collective for $1,000 each. None of them will strike it rich. EB PREC offers these people a targeted 1.5% yearly return on shares, about what one would expect to secure from a savings account and much lower than what one would expect from a typical real estate investment.

The collective’s website stresses that a key boon in becoming a shareholder is the ability to “feel good about your money being invested in community.” But unlike community owners, investors don’t share an active role in decision making. EB PREC also gets loans from foundations that are aligned with their vision and offer low to no interest loans.

The work and/or money of EB PREC’s five-member staff, 13 owner residents, and hundreds of community owners and investors has made it possible to secure two Bay Area homes and start revitalizing Esther’s, a project they see costing around $5 million. To finish the Esther’s project though, EB PREC needs a new classification of people to join them called commercial co-owners. They see the large indoor spaces hosting a bar and café that they hope will have music performances as well as a healing arts center while the backyard will host a farmers’ market. They’re seeking BIPOC people with expertise in those areas to run and take communal ownership of those spaces with EB PREC.

“Even in my dreams many of the walls are just prepped for art instead of having art on them,” Session said, pointing around to the spaces in Esther’s. “It’s not like how can we cover all the walls with our ideas but how can we prepare a palette that holds our mission and also holds space for other people’s creativity and control?”

Session sees the symbol of the palette in her dreams as the space that commercial co-owners and the community can help to fill. She has many questions like: What kind of cafe will be in the place? What kind of plants can the backspace have? What kind of music will be played in the space? What kind of healing arts practitioners will come? What kind of food will be served?

“We know we can’t be totally clear on what this space will be until it has its humans,” Session said. “Right now, we’re sort of its steward humans.”

As EB PREC searches for BIPOC commercial co-owners, they’re again seeking more resident collective members as the Esther’s property also has residential units that can house at least six people. They hope to build a community of BIPOC business owners and residents to bring vibrant life to Esther’s once again.

Building from Seventh street’s vibrant Black past 

To look back at how the original Esther’s Orbit Room was founded in the early ’60s could likely read as a fairy tale to the modern reader as the economic conditions, particularly for Black people, were radically different at that time. Esther Mabry, a Black woman who came to West Oakland from Palestine, Texas at age 22, in 1942, worked as a waitress at Slim Jenkins Supper Club, a legendary Seventh Street jazz and blues club, and was able to save enough from tips to start her own restaurant in 1950.

She named it Esther’s Breakfast Room. By the early ’60s, just around the time Slim Jenkins Supper Club and other similar establishments were closing, Esther and her husband William, a worker at the now closed Alameda Naval Air Station, had enough capital to buy a new space and open Esther’s Orbit Room.

Esther’s and William’s ability to open their business was likely aided by World War II and its subsequent postwar economic boom of the ’40s and ’50s that brought decent paying jobs, disposable income and homeownership to much of West Oakland’s Black population. Seventh Street was lively at that time and full of Black-owned businesses, including dozens of Black-owned jazz and blues clubs.

“It was the place to be,” Mabry said in an interview from 2002. “They used to have music playing and the hot tamale man. They would have shows and dances and theaters. You could just go from one club right to another. But no one’s there anymore.”

Writer Jennifer Soliman briefly and poignantly shows much of the complex reasons for the demise of these economic and social conditions in her historical essay “The Rise and Fall of Seventh Street.” They included federal urban renewal projects and the creation of BART, both of which lead to the destruction of Black-owned homes and the displacement of much of the Black population. In the same 2002 interview, Mabry lamented that there were no longer Black business owners in that location and said, “I’m the only one that’s left.”

These days, starting a successful business on Seventh Street based solely on the capital two people earn who don’t have deep generational wealth may seem like a pipe dream. But in one instance, a cooperative model has worked. The BlPOC worker owned Mandala Grocery Cooperative, which sits across from West Oakland’s BART station, employs seven people and has been open over a decade.

Session hopes EB PREC’s new collective project will help bring some of the vibrant Black life Seventh street once had back to the area by creating an economic and artistic anchor point around Esther’s. For that to happen, Session said she realized more than just housing was needed for BIPOC people, but an economy that they co-create. She hopes the Esther’s project can contribute to that and serve as a model for others.

In the meantime, Pamela Brown eagerly awaits what’s to come from the rebirth of a place that brought her so much joy decades ago.

“This is such a good idea,” Brown said. “It’s a great place to be revitalized.”

The Oakland Post’s coverage of local news in Alameda County is supported by the Ethnic Media Sustainability Initiative, a program created by California Black Media and Ethnic Media Services to support community newspapers across California.

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Coming Soon to California: A ‘Zero-Fee’ Public Banking Option

Proponents of public banking in California say Wall Street banks have failed low-income communities, particularly people of color. They also say the public banks will provide easier access to capital that will be critical to helping small businesses and neighborhoods rebound after the pandemic.

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A woman sits at her dining room table with laptop and financial reports doing her monthly budget. She is smiling at the ease of use as she works on her smart phone banking app to do monthly finances, pay taxes and save money for the future.

On October 4, Gov. Gavin Newsom signed legislation paving the way for a new public banking system in California.

AB 1177, known as the ‘California Public Banking Option Act,’ creates a zero-penalty, zero-fee, and zero-minimum-balance platform for basic financial services.

These services include direct deposit from employers and public benefits, automatic bill pay to registered payees, recurring payments and donations to account holders’ organizations or charities of choice, and an infrastructure to support account holders in building credit.

“AB 1177 will help Californians stay protected from overdraft fees and penalties and give them an opportunity to save money and build wealth while fighting the racial wealth gap,” said Assemblymember Miguel Santiago (D-Los Angeles), lead author of the bill.

“California is leading the nation’s public banking movement and we must keep working to provide no-fee banking services to all Californians,” he added.

Santiago wrote the bill with the intention to help close the financial services gap that leaves 1 in 4 Californians unbanked or underbanked. Modeled after the state’s public retirement program CalSavers, the bill forms a commission of representatives from the Treasurer’s office, the Department of Financial Protection and Innovation, financial access experts and community members to oversee market analysis on how the program should be implemented.

Proponents of public banking in California say Wall Street banks have failed low-income communities, particularly people of color. They also say the public banks will provide easier access to capital that will be critical to helping small businesses and neighborhoods rebound after the pandemic.

“Financial exclusion and scarcity have been a tool for oppression, discrimination and systemic inequity for too long. Public banking options such as BankCal, along with new technology that allows for free exchange over the internet, are urgently needed to decentralize power, privilege and financial control,” said Briana Marbury, executive director of the Interledger Foundation, a non-profit that advocates for standards and technologies that support an open and integrated global financial system.

Opponents of the bill believe that government-owned banks open the door for corruption and that the cost of any mismanagement of funds will come out of taxpayers’ pockets.

A 2015 article published by the Cato Institute critiques past public banking projects, highlighting shortcomings and failures.

Mark A. Calabria, who was chief economist to former Vice President Mike Pence and former director of the Federal Housing and Finance Agency authored the article.

He cites devastating losses Germany’s public banks suffered during the sub-prime mortgage crisis of 2008.

Calabria also points to public banking failures closer to home.

“The recent history of Fannie Mae and Freddie Mac, quasi‐ public banks at the federal level, illustrates that mismanagement and corruption are alive and well at the intersection of the public and private,” he wrote.

However, Trinity Tran, co-founder of the California Public Banking Alliance, argues instead that AB1177 does not create a new bank but “creates a statewide retail banking option through which every California worker can access zero-cost services.”

While California is known for its groundbreaking legislation, it will not be the first state with a banking system like this. North Dakota’s public banking system was founded back in 1919.

Marbury believes that the bill is only the first step toward a broader initiative that would revolutionize accessibility to financial growth and equality.

“This is an exciting development, but not far-reaching enough. Public banking initiatives should be introduced in other states across the U.S. to ensure equal access to financial services for the most vulnerable sectors of our population while elevating the economic health of society as a whole,” she said.

In addition, global financial inclusion should encompass both “brick and mortar” bank access for everyone and a more inclusive internet,” she added.

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