White Weed Entrepreneurs Are Gaming Programs Meant to Help People of Color

White Weed Entrepreneurs Are Gaming Programs Meant to Help People of Color

The crowd started to gather outside the narrow storefront at about 11 p.m. on December 20. The grand opening the following morning—of Berner’s on Haight, San Francisco’s newest legal cannabis store—was apparently worth queuing up for all night long.

While there are nearly 40 weed shops in the city, Berner’s is the first—and only—place to buy legal weed in the Haight Ashbury, a neighborhood that’s still a magnet for street kids, bougie Deadheads, and curious counterculture-seeking tourists. At least part of the draw is explained by the Cookies-branded weed for sale inside: Developed and marketed by the eponymous Berner, a San Francisco native, Cookies is almost certainly the cannabis industry’s best-known and most in-demand trademark. And like everything Berner and Cookies do, the opening was accompanied by an aggressive social media marketing campaign.

But Berner’s on Haight is also supposed to be a social-justice success story. The dispensary claims to be the first in San Francisco to be owned by a Black man, a longtime city nonviolence advocate named Shawn Richard. After decades of Black outmigration, in an era when the city’s Black population has dwindled to as low as 3.5 percent, this is a very big deal. And although both of Richard’s ownership partners are white men, Berner’s is nonetheless the very first weed store to open for business under the city’s “equity program,” one of a growing number of efforts across the country to try to make the legalized cannabis industry less white.

The problem, many critics say, is that equity programs suffer from the exact same failings as every other business effort in cannabis. In order to stand a chance of winning a permit—let alone founding a viable business—Black and brown businesspeople must still find well-capitalized partners. Almost always, this means finding white partners—rendering equity programs little more than a cynical example of tokenism at best.

In the case of Berner’s, not only was Richard compelled to partner with the kind of young, tech-savvy white men who already dominate the cannabis industry, he also partnered with white men who enjoy political connections, and who figured out a way to master the application process in order to edge out other applicants for the first weed store on this part of Haight Street—including people of color who say this compromised the process.

One of legalization’s most common selling points is that it serves as a corrective. Ending arrests for cannabis possession and moving weed sales to taxed and regulated storefronts is how you “right the wrongs of the drug war,” a goal endorsed by the American Civil Liberties Union, the Drug Policy Alliance, and just about everyone else involved in the legalization movement.

The problem is that so far, the multibillion-dollar cannabis industry is overwhelmingly white and male. In 2016, reporter Amanda Chicago Lewis found that only 1 percent of dispensaries nationwide were owned by Black people. A review the following year conducted by Marijuana Business Daily discovered 81 percent of people who started cannabis firms were white. In Chicago, all 11 of the stores selling weed on January 1, the first day of legal sales in Illinois, were white-owned—prompting one Black city alderman to compare cannabis to sharecropping.

Other lucrative industries have serious gender and racial disparities. The United States is still a society dominated by a white patriarchy. But since legalization was sold to voters partly as a social justice cause, a way to make up for the disproportionate harm the war on drugs has done to people of color, the cannabis industry’s failure to achieve racial equity is particularly glaring.

Realizing that the industry can’t or won’t fix itself, and that something close to a “voting rights act” for weed is necessary, lawmakers and cannabis-legalization advocates in many states have since cobbled together make-goods in the form of preferential permitting for people harmed by cannabis prohibition. Details differ from city to city, but across the country, the idea of “equity”—or making sure people who were arrested for weed or affected by the drug war, many of them minorities, can own cannabis businesses—is having a moment. Legalization efforts in New York State and in New Jersey were scuttled last year when some legislators thought the provisions to benefit Black and brown communities were inadequate. At the moment in San Francisco, if you want a license to sell weed, you need to be an equity applicant, or have one on your team.

But equity’s shortcomings are already becoming clear: One way to fulfill equity programs’ requirements but continue business as usual is to simply add a Black name or a Black face to a permit—a workaround Berner has acknowledged.

“A lot of the big-business people are using these people,” Berner, whose real name is Gilbert Milam, said during a 2018 appearance on The Breakfast Club. “They’d be like, yo, let’s say you got caught up… ‘Let me give you a rack. Let me use your name, put it on this license.'”

“We’re doing something different at Cookies,” he went on. “Big business is coming in, trying to push out all the culture. We’re gonna really bring people in and teach them and show them they have a right to be in the business. Let’s show you how to get into the business.”

Berner is the face of a weed store whose owners, critics say, have gamed a system meant to promote Black business ownership. Photo by Tim Mosenfelder/Getty

At least outwardly, San Francisco was concerned with equity from the beginning of legal recreational cannabis sales in California. On January 1, 2018, the first day anyone 21 and over could buy weed in the state, only existing medical cannabis merchants could participate. No new permits would be issued until after there were at least as many equity permit-holders as “regular” weed sales permits. Competition for those was fierce, especially since state and city laws forbid a dispensary from opening up within 600 feet of another dispensary. In some cities, permits were handed out by lottery; other cities reviewed and scored applications, giving the lucrative permit to the winner. (These permitting processes are so vulnerable to corruption and graft that the FBI publicly announced it was investigating elected officials for weed-related bribery; nationwide, several mayors have already been raided or snared on charges related to cannabis permits.) In San Francisco, your application would be considered first if you were the first to file it once the online application portal went live at 10 a.m. on May 22, 2018. Anyone within 600 feet of your location would be considered only if your application was denied.

Though he’s the public face, Berner doesn’t own the dispensary—his company Cookies receives a licensing fee to brand it. But he lent his brand to an A-team: One of CEO Shawn Richard’s partners, Conor Johnston, was chief of staff for San Francisco mayor London Breed (herself a Black woman) back when she was president of the Board of Supervisors.

Having someone well-connected and who knows the city is valuable. But Johnston was also one of a select group invited to take a peek at a beta version of the permit application, he told VICE in an interview—an invitation that two competitors for the Haight Street dispensary say was not extended to them. (Johnston says he doesn’t remember why or how he was selected; the San Francisco Office of Cannabis declined to explain in detail who was selected or how.) Another member of the team wrote a script that helped them autofill their application and complete it sufficiently to receive a timestamp just eight minutes after the applications opened, Johnston explained.*

After that, everything fell into place. Already known to merchants and residents in the Haight, the application received unanimous approval from the city’s Planning Commission—all of whom are appointed by the mayor. (Jeff Cretan, a spokesman for Mayor Breed, said his boss “has no role or participation” in the permitting process, but acknowledged the mayor recognizes the city “need[s] to do more” to help all small businesses, including weed equity applicants.) That was how Berner’s on Haight became the first equity permit in San Francisco, and how everyone else who wanted to sell weed in the Haight Ashbury found themselves shut out.

None of this is illegal, and Johnston maintains that the access to the beta access did not advantage his team—they wrote the script to get their application in first based on information provided to all applicants, he said. but some business owners competing with Berner’s application say that this amounts to something like favoritism, or at least a demonstration of how equity partners can’t expect to survive without aid from existing hierarchies of power.

“That super-fast submission? The first ones to go through? It’s all political—come on,” said Alexis Bronson, the equity partner in a proposed dispensary in San Francisco’s Union Square. He also tried to get a dispensary permit on Haight Street, only to find himself edged out by the more politically savvy team.

“It’s who you know,” Bronson said, adding that the way Berner’s was permitted “raises eyebrows. It’s been the talk forever.”

A graphic circulated by Berner’s describing who the owners are. Image Obtained via a public records request from the San Francisco Office of Cannabis

“Like everything else in our capitalist society, you need money and you need expertise in order to have a shot at getting one of these very limited permits,” said Matt Kumin, a San Francisco-based cannabis business attorney with dealings throughout California. “That’s not a criticism of Conor or that particular process, but it’s just a culture where, if you’re on top of it, and you’re smart enough to have relationships, you generally get rewarded.”

“It’s almost like these equity programs are just a cover—there are so many flaws in them,” said Solonje Burnett, a Brooklyn-based entrepreneur and co-founder of Humble Bloom, a combination educational event series and advocacy group that pushes for women and people of color to participate in the CBD and cannabis industries. “In many cases… it’s an equity applicant plus someone else who has the connections to get you through it, which to me is a slap in the face when it comes to the idea of equity. It’s about bias and privilege.”

Berner was not available for an interview. In an emailed statement sent through Berner’s on Haight spokesman Christian Averill, the entrepreneur admitted that the “social equity program is in its infancy,” but rather than “waiting until it’s perfect, we embrace the spirit behind these programs to help applicants participate in cannabis.”

“Not only that, we are helping to refine these programs,” he added. (Pressed for specifics, he offered none.) “Cookies is one of the only companies committed to seeing the social equity program be successful for the positive intent it’s supposed to have in our community. While others may look for ways to get rich quick or ride the coattails of applicants, we are working every day with people like the city of San Francisco and partners like Shawn M. Richard to be a partner for good and to make the social equity program the success it’s destined for.”

During a pair of terse interviews with VICE, Johnston—a pugnacious figure who, when he was working for Breed, was named by SF Weekly as the “Biggest Mayoral Race Troll” for his willingness to be mad online—bristled at suggestions that his team benefited from any kind of material advantage because of his political connections.

“I don’t see how these tired, petty questions are relevant to the national issues faced by social equity programs and the people they’re designed to help,” he said, calling Richard’s situation a “true partnership” and an example of how an equity applicant “with limited financial resources” can “be better positioned for success.”

Exactly how much of the business Johnston owns and how much Richard owns Johnston refused to say; a copy of the permit application obtained from San Francisco’s Office of Cannabis via a public records request had that information redacted, but at least 20 percent is owned by a consortium, Equinox Botanicals, separate from Richard’s stake. Also redacted by the Office of Cannabis is exactly how Richard qualifies as an equity applicant, or whether he or any partners were arrested for weed. (He did do several stints in prison for selling cocaine in the 1990s, as Richard told WIRED in 2019.)

Similar situations have played out in other cities. In Boston, the license for what Mayor Martin J. Walsh said would be the first dispensary in town was awarded to Andrea Cabral, a Black woman served as both Suffolk County sheriff and the state Secretary of Public Safety. In Los Angeles, minority cannabis advocates are calling for a do-over after it was revealed that certain applicants were able to access the permit application early. These issues may be a result of the scarcity of cannabis permits—cannabis businesses are subject to strict zoning rules, and in some places there are hard caps on the number of licenses granted.

“There’s no evidence supporting them, but if you have huge buffer zones and strict zoning so that only a few pieces of property in a given city are suitable for a cannabis business, who do you think will be able to afford it? The same groups who can afford armies of lawyers and lobbyists to have the best, most compliant, quickest-to-get approved applications,” said Shaleen Title, a cannabis attorney who sits on the Massachusetts Cannabis Control Commission. “Even if there’s priority or other advantages for equity applicants, these barriers create advantages for those with resources, whether equity applicants or not.”

A better and actually equitable cannabis licensing program would be more than just ensuring there’s a Black name on the permit, according to advocates like Humble Bloom’s Burnett and Amber Senter, a Black woman who co-founded Supernova Women, an Oakland-based advocacy group for the participation of women of color in weed.

“Real” equity would look more like weed-funded reparations: it would include childhood education or workforce training, perhaps paid for with cannabis taxes. It would have low- or no-interest loans—or, as Senter prefers, no-strings-attached grants—for Black entrepreneurs. And since not everyone is an entrepreneur, equity would also have local-hire guarantees that ensure Black people who might want to work at a dispensary can do so at a level above security guard or budtender. A good attempt at equity might look like Oakland’s, where entrepreneurs have benefited from loans for several years, where hiring guarantees are coming online this year.

The first wave of equity programs may be well-intentioned, and is encouraging entrepreneurship in limited areas, but the cannabis industry is still unequal in the same ways that many other American industries are unequal, with power and profits accruing in the hands of an ownership class that is disproportionately white and male. And the way some equity programs are currently structured, it’s not promising

“It’s another form of capitalism that helps very few people from poor communities,” said Senter—who, despite being a Black woman and a military veteran, does not qualify for an equity application: She’s from the wrong zip code (she’s from Illinois), and never got arrested for weed. In the eyes of the law, that makes her on equal footing with someone like Johnston.

“How does offering a cannabis business license to a few from overpoliced communities help the rest of the community that was destroyed by the war on drugs?” asked Senter, who pointed out that weed stores have been in San Francisco and Oakland for most of this century, and Black areas are still poor. “The whole social equity program model needs to be reviewed, period.”

Correction 1/31: An earlier version of this story stated that Conor Johnston said that his team wrote a script to get their application in quickly based on information gleaned when they had access to a beta version of the application. Johnston had not in fact said where the information for the script had come from, and maintains that his team’s beta access did not provide an advantage in the process. VICE regrets the error.

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