Oakland’s equity cannabis dispensaries are reeling from COVID and burglaries
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Late in the evening on Sunday, May 31, Alphonso Blunt watched live security camera footage of his East Oakland cannabis dispensary while waves of looters broke in and ransacked the building. Over the span of five hours, about 200 people emptied his store of cannabis, computers, tablets, and everything else of value while he watched from home, powerless to stop them.
“I went through all the gamut of emotions while watching live,” said Blunt, who co-founded Blunts+Moore in 2018.
Blunt tried calling the police that night, but they told him they wouldn’t be responding to the break-in. Officers were already too busy dealing with property damage elsewhere.
He later shared footage from the burglaries on his Instagram feed, expressing frustration that the killing of George Floyd would become connected to a Black-owned dispensary getting robbed.
Oakland’s interim Police Chief Susan Manheimer told the Police Commission last week that nine of the city’s 10 permitted dispensaries were burglarized over a span of four days beginning on May 29. Multiple cultivation and distribution sites were also robbed, according to Ramon Garcia, who runs Padre Mu, a cannabis delivery company. Most of the impacted dispensaries have remained closed since the burglaries.
The loss is particularly painful for Blunt, a Black man raised in East Oakland who was arrested for selling cannabis in the same area near the Coliseum where he now operates his business. In 2016, Blunt was among the first to receive a cannabis dispensary license under Oakland’s equity permit program, created to ensure that community members harmed by the strict enforcement and harsh sentencing laws enacted during the “War on Drugs” wouldn’t be locked out of the city’s burgeoning legal cannabis industry.
Under the program, half of all the dispensary permits issued by Oakland must go to residents who have a prior cannabis conviction or have lived for at least 10 of the last 20 years in areas of Oakland with disproportionately high rates of cannabis arrests.
The program has also steered investments in cannabis businesses to parts of East Oakland like the Coliseum and Lockwood Gardens neighborhoods that Blunts+Moore now straddles.
Carlton Williams, the owner of New Life CA, another small equity cannabis business in Oakland, sees the recent robberies as symptomatic of a broader problem: systemic neglect and racism that leads young people who lack other opportunities to turn to crime.
Williams’ dispensary was actually robbed on May 8, three weeks prior to the mass protests. He lost $200,000 worth of cannabis and other property.
“This is nothing new,” said Williams. “During the civil unrest, the youth, the people that are hit hard by the war on drugs, their voice is still not being heard. That’s the source of the problem.”
Williams, Blunt, and other small dispensary owners said they were disheartened that more police officers didn’t show up to protect areas of the city that historically have been over-policed but neglected during emergencies.
“We pay the police with our taxes, but they left us for dead,” said Blunt. “[Mayor] Schaaff could have called in backup. It was the wild, wild west out here.”
The Oakland Police Department did call for and receive backup for several days, from May 30 to June 1, during the height of the civil unrest. Law enforcement agencies from as far away as Kings County were called to Oakland, but stayed primarily downtown to guard the police headquarters on Broadway and 7th Street, which OPD feared at the time would be burned. The building was shot at and a federal security officer there was killed during one incident on the evening of May 29.
The absence of police in East Oakland during that time left some businesses with little choice but to defend themselves against looters. One of the cultivators at Padre Mu was shot in the leg while protecting the business against armed people who tried to break and enter, said Garcia.
Crisis on top of crisis
Blunt attributes his success to optimism and a lifetime of perseverance. He said his positive attitude will get him through these tough times.
“Today, I’m fine. I’m pushing through to the next thing and I’m moving forward,” he said, adding that he’s financially in a better position than many other Oakland equity cannabis businesses whose insurance plans may not cover damages. “I can just buy product and replace some glass,” he said. “It’s easier for us to rebuild.”
Even before the recent robberies, Blunt was dealing with the business implications of the pandemic. At first, it wasn’t clear how the pandemic would affect the local cannabis industry. After Alameda County issued its first stay-at-home order on March 16, Blunts+Moore experienced its single biggest day of sales as customers rushed to buy cannabis, uncertain whether dispensaries would be allowed to stay open. Other dispensaries saw similar rushes.
Dispensaries were eventually deemed essential businesses and allowed to remain open, but sales have since dipped. Greg Minor, an assistant city administrator who oversees the permitting of Oakland’s cannabis businesses, said the businesses now face a slew of questions about their economic future.
“Even if they’re allowed to operate, are consumers going to want to go to a store? Are people going to have discretionary income? Are there going to be disruptions in the supply chain?” posed Minor.
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Selling cannabis is only part of the business model at Blunts+Moore, which had also functioned as a social hub. The dispensary’s parking lot once regularly hosted food truck parties with local DJs and entertained crowds from the neighboring Coliseum.
But the ban on social gatherings during the pandemic cut off one of the store’s most important revenue streams. The dispensary now has a different feel. Customers are required to order their cannabis online, making the once-friendly experience more transactional.
“Cannabis brings people together. Now, you can’t even really talk to your regulars,” said Blunt.
Further compounding problems for the industry is marijuana’s federal status as an illegal drug, which makes cannabis businesses ineligible for federal stimulus money, tax breaks, and other forms of coronavirus relief. Heavy regulations, high taxes, and start-up costs have made it difficult for the smaller dispensaries in particular to survive. Meanwhile, “Big Weed”—large companies with financial backing from wealthy private investors—has dominated, and some smaller distributors and growers have opted to remain in the unregulated market.
“What does a small equity business that was already struggling, can’t get any loans, and now has been robbed of a quarter-million dollars of product do? How do they survive that?” said Garcia of Padre Mu. “If we don’t get support from state agencies, the whole industry is in peril right now. We’re at a real extinction-level.”
While the city’s equity program has helped, obtaining a dispensary license is only the first hurdle. Without access to federal loans, pulling together enough money to open a brick-and-mortar store, let alone keep it running, is a challenge. Four years after the equity program granted its first round of licenses, only two equity dispensaries have opened in Oakland. The others still haven’t gotten off the ground.
Community taking action
Instead of fretting about the looting, Blunt is taking steps to help other owners. In collaboration with Cookies, another Oakland dispensary, and Weedmaps, Blunt is organizing a fundraiser to help small cannabis businesses in the Bay Area get back on their feet. A virtual concert, I Got 5 On It, will stream live at 5 p.m. on June 16, the anniversary of Tupac Shakur’s birthday. The concert will feature artists like Richie Rich, Rocky Rivera, and Tia Nomore.
In addition to supporting local cannabis businesses, Blunts said a portion of the funds will be donated to the George Floyd Family Foundation. Despite facing massive losses, Blunt said he won’t be keeping any of the proceeds for Blunts+Moore, preferring that the money goes to those who truly need it.
Even dispensaries that weren’t robbed have faced economic losses as a result of the recent looting. With so many retailers boarded up or destroyed, distributors like Padre Mu don’t have anywhere to sell their cannabis. With more time on his hands than usual, Garcia spent the last two weeks writing a letter to Governor Gavin Newsom on behalf of cannabis companies requesting state relief. Their recommendations include suspending or reducing state taxes, removing dispensary licensing fees, and releasing additional equity funds.
Oakland recently received $6.5 million from the state for its equity grant program. On June 11, the city’s cannabis commission decided to release some of this money in grants rather than loans to help small cannabis businesses recover from the robberies and COVID-19 shutdown.
Through all of the setbacks, Oakland’s equity cannabis business owners say they remain focused on the bigger picture of giving back to their communities.
New Life CA owner Carlton Williams is focused on fundraising for community centers in East and West Oakland and on developing a partnership with Mindseed Records, where, prior to the pandemic, he held monthly after-school enrichment programs to expose young people to the music industry.
“We’re using cannabis as a tool to do something positive,” he said. “It’s about rectifying the damages and not using it to line our own pockets. It’s always about correcting the damages brought by the War on Drugs. Our hope is that larger corporate companies also step up and give back.”
Blunt is now turning his attention to reopening Blunts+Moore as soon as possible.
“I’m trying to be open in the next couple of weeks. I got people suffering who can’t get their medication or their recreation. My staff is losing their hours,” Blunt said. “We want to get back like we never left, and rebuild that community back up.”
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Black and brown dispensary owners say they’re working together to pick up the pieces.