Green Rush: Cannabis Stock Program Cancels Unexpected Entrepreneurs

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Ali Jamalian was arrested in 1999 as a college student for cannabis possession. In view of the deportation to Germany, he dropped out of the University of San Francisco and spent the following years crippled by litigation and struggling for housing and a steady income.

“I had absolutely no income or possessions,” he said. “[The authorities] took everything because it was taken as evidence. “

Today the very same substance that caused Jamalian’s death is his livelihood. With the help of an equity program designed to help cannabis entrepreneurs in The City, he opened a successful cannabis manufacturing facility, Sunset Connect, last September. He is also the chairman of the San Francisco Cannabis Regulatory Committee.

“It’s a form of reparation for those of us whose lives have been ruined by cannabis arrests,” said Jamalian. “I can tell you that the San Francisco program should really be used for social justice programs across the country and in the industries.”

Sunset Connect’s Ali Jamalian displays a bud of marijuana at the company’s manufacturing facility. (Kevin N. Hume / The Examiner)

Founded in 2017 in response to the nationwide legalization of recreational marijuana, the San Francisco Office of Cannabis Equity program is helping people negatively affected by drug criminalization enter the industry legally. Participants must meet criteria based on their median income and attendance at local public schools in exchange for priority permits, fee waivers, legal advice, and technical assistance to start their own cannabis business.

Earlier this month, the OOC released figures showing that all of the 19 cannabis business permits the office has approved since its inception three years ago were equity applicants. Most of these stores opened in 2020 amid the pandemic. Cannabis sales taxes, which are considered an essential business, earned The City $ 4.9 million in revenue for fiscal year 2020-21, according to the controller.

In the meantime, at least 752 people have submitted applications for authorization as equity applicants, of which 195, according to OOC numbers, have passed the review and entered the approval process. It is estimated that by next year there will be an equal number of cannabis equity dispensaries as the medical cannabis dispensaries that existed before recreational use was legalized.

San Francisco-born Michael Hall, who grew up on the Fillmore housing projects and was in jail for cannabis offenses, opened Fig & Thistle Apothecary, a pharmacy in the Hayes Valley, with a partner in October. He says the program was instrumental in handling the complexities of opening a business and is working as intended.

“It’s a business now that people are taking advantage of,” Hall said. “I want the children in my ward to be right there.”

Jason Deming of cannabis stock maker Sunset Connect holds up finely ground marijuana that goes into the company's pre-rolled joints at the company's manufacturing facility on Thursday, July 22, 2021.  (Kevin N. Hume / The Examiner)

Jason Deming of cannabis stock maker Sunset Connect holds up finely ground marijuana that will enter the company’s pre-rolled joints at the company’s manufacturing facility on Thursday, July 22, 2021. (Kevin N. Hume / The Examiner)

However, serious concerns remain about the barriers to entry. The individuals who are supposed to benefit from the stock plan are likely to have fewer resources to start a business, which is made even more difficult by the high rents in San Francisco. To solve this problem, incubators can partner with a verified equity applicant, as long as they provide rent-free space or technical assistance to run the business. Incubators must also ensure that half of their employees meet the equity applicant criteria and employ local employees for at least 30 percent of business hours.

However, some owners have expressed concerns about the integrity of the incubators. “There are a lot of predatory incubators taking advantage of humans and that’s because of the way the program was written,” said Reese Benton, owner of Posh Green Collective in Bayview. “How do you think you get the capital to start your business if you can’t get credit? We have to rewrite it. In my opinion we can only get better in the future. “

More robust grants instead of loans would help prevent this scenario. OOC has been able to offer up to $ 48,000 for stockholders and up to $ 100,000 for sole stockholders in government grants, but the budget impact makes it a fluid resource. The federal cannabis ban is also a major obstacle.

Drakari Donaldson is the CEO of California Street Cannabis Company, a business on Nob Hill.  (Kevin N. Hume / The Examiner)

Drakari Donaldson is the CEO of California Street Cannabis Company, a business on Nob Hill. (Kevin N. Hume / The Examiner)

Challenges aside, the success of the program underscores the urgent need to support business owners beyond the cannabis industry. Drakari Donaldson, the owner of Nob Hill Pharmacy California Street Cannabis, was raised in a Section 8 apartment by a single mother. He always knew he wanted to start a business in his hometown of San Francisco, and when he found out he met the criteria for the cannabis equity program, he realized he could make his dream a reality. After working with childhood mentors as partners and investors for two years, its storefront opened in January 2020.

Donaldson’s trip has led him to wonder why similar stock programs aren’t built into the approval and approval process for other companies.

“It can’t just be about cannabis equity,” said Donaldson. “It’s about equity in all companies, to get minorities in a better position. Opening my own company was an opportunity to create generational wealth. “

imojadad@sfexaminer.com

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