Cannabis Regulation in Oakland
Back in 2003, the US Supreme Court ordered the Oakland Cannabis Buyers’ Cooperative (OCBC) to stop issuing medical cannabis to patients. As a result, several illegal cooperatives, like Bulldog Cafe and Green Door, began operating in Oakland. By the summer of 2003, there were around 23 illegal cooperatives in the city, and the council was unsure how to proceed.
The then-mayor, Jean Quan, approached Arturo Sanchez to find a way to regulate these cooperatives. Arturo proposed a concept to regulate them similarly to cabarets, taxi cabs, or massage parlors in the city, using a special business permit issued by the city administrator’s office. He wrote an initial ordinance that was later revised by the City Attorney’s office.
The ordinance was presented to the council in early 2004, but without the RFP or permit-issuing process, as those bureaucratic procedures came later. Arturo moved on to a regulatory role in the city administrator’s office, and his colleague, Barb Kelly, took over the task of framing the regulations and the process to apply for cannabis dispensary permits.
When the ordinance was finally adopted, it established a regulated framework for cannabis operations in Oakland. This new regulatory environment helped legitimize the medical cannabis industry and provided guidance to businesses seeking to enter the market.
The Historical Significance of Cannabis Regulation in Oakland
Oakland was well ahead of its time with its permitted dispensaries, which were approved by a local regulatory agency like the city of Oakland, making it the first and leading city to set a precedent on how to regulate them. Arturo, who was involved in the regulation of cannabis permits, said they were so ahead of their time that even when Washington DC was considering adopting a similar establishment, they contacted him to ask how they got the product. Despite their success, Oakland didn’t receive the recognition it deserved for being a leader in the field.
In 2009, the City of Oakland began large-scale grows and tried to adopt an ordinance that would allow them to have 100,000 square feet of cultivation area for permits. However, they received a lot of attention from people they didn’t want to attract, including the federal government. Arturo wrote and published the RFP for large-scale grows, but soon after, the council received a letter from the federal government stating that no city official, including Arturo, would be immune from prosecution for adopting such an ordinance. As a result, they made a public, transparent decision to stop the process, and the four large-scale cultivation permits never came into existence.
Despite this setback, the City of Oakland remained committed to expanding medical access and retail dispensary processes. They tasked Arturo with increasing the number of permitted locations from four to three. It was a long and difficult journey, but in the end, they were able to get through it and ended up with four operators.
And that’s a brief history of Cannabis Regulation in the City of Oakland. Now, let’s talk about the things you need to know about the process, permits, and equity protection.
Advice to those who want to start building a cannabis business
- Consider your community – The cannabis industry has changed a lot since it first emerged. There is now a lot of capital available, waiting for the right opportunity to invest. New markets are also emerging, with a focus on empowering people in their communities through equity, a fair and balanced approach, and opportunities for formerly incarcerated individuals.
- Build connections with industry experts – One of the best ways to learn about the cannabis industry is to work with local regulators and get involved in the process. You can also build connections with industry experts who can provide insights into the nuts and bolts of running an operation.
- Stay true to your values and community – It’s important to build partnerships and work with individuals who are well-versed in growing and selling the plant. You should also stay true to your values and the needs of your community.
- Protect your interests – Be aware of big money players who may try to take advantage of equity opportunities. Find trustworthy business partners who will offer honest advice without taking away from your business.
What RFP Process Looks like
The RFP (Request for Proposal) process involves several critical components for a successful cannabis business. Firstly, the applicant’s background, history, and connection to the community are evaluated, not just their resume or academic degrees. Equity applicants are encouraged to highlight their connection to the industry and community in their application.
The second component is the business setup, structure, and leadership. As an equity applicant, having significant equity and control over the company is important. This is a critical aspect that most jurisdictions consider, and it’s not just about having the title of CEO or manager.
The third component involves daily operations, including standard operating procedures (SOPs), point-of-sale systems, and product control mechanisms. Having control over products is essential to prevent diversion or illegal sale, and this should be addressed in the application process.
The fourth component is specific to the type of application, whether it’s for a dispensary, cultivation, production, or manufacturing. It’s important to consider how these three components come together and whether you’re vertically integrated or not. A business plan should include a realistic expectation of building and construction costs, as well as a pro forma on how to make it financially feasible.
For retail businesses, minor modifications such as an inventory room, a safe, and alarm systems may be necessary. However, for cultivation and production businesses, it’s crucial to have guidance from experts, including architects, engineers, and water supply specialists, to ensure a successful start.
In summary, the RFP process for cannabis businesses evaluates various critical components, including applicant background, business setup, daily operations, and business type. Having a solid business plan, financial projections, and expert guidance is important to ensure a successful outcome.
How to Stand Out from the Crowd
When it comes to standing out in a competitive application process, it’s important to remember that simply winning an application is not the same as running a successful business. While some may be skilled at crafting winning applications, it’s crucial to ensure that the document truly reflects who you are and your ability to operate the business.
To truly stand out, it’s important to go beyond cookie-cutter answers and present yourself as a unique and valuable member of the community. Highlight your background, connection to the community, and how you plan to make the business work.
Hidden Business Opportunities in the Cannabis Industry
The cannabis industry provides hidden business opportunities that can be harnessed through partnerships with other local businesses. By focusing on the connection between cannabis and other industries such as food, energy, and entertainment, there are opportunities to create a synergy that can revitalize certain areas. Although current regulations may not allow for the intermingling of cannabis with other uses, a licensed premise can be located adjacent to or near other establishments. By exploring these types of partnerships, businesses can tap into the hidden potential of the cannabis industry and create unique and profitable business opportunities.
Connect with Arturo Sanchez at https://www.linkedin.com/in/arturo-sanchez-5aa0628/
I hope this has been helpful to you. Follow me on Instagram @highsalwa and visit highSalwa.com to learn more, access some downloads, and sign up for the email list. Listen to the High Class Podcast and leave a comment or suggestions for upcoming episodes. Thank you!
If you’re competing, or you’re thinking about competing for a license, but you don’t know where to start, I went ahead and cleaned up all of my application material, and updated a lot of it and you can get your own copy here: https://highsalwa.com/business-downloads. It is what I use to win licenses in multiple different markets. I have cultivation, production and retail that’s currently available and I’m looking forward to adding more to give you a head start.
