Shawn M. Richard, seen here on Wednesday, Feb. 13, 2019, is one of the partners in an Upper Haight dispensary set to go before the Planning Commission on Thursday. He described the project as “a partnership with the local community and cannabis entrepreneurs that are trying to see something great up on Haight Street and bring back that enthusiastic feeling that [the street] once had.” (Ellie Doyen/Special to S.F. Examiner)

First cannabis equity permit moves toward approval, faces pushback from rejected applicants

A hearing on a retail cannabis dispensary in San Francisco’s Upper Haight neighborhood set for Thursday marks a historic milestone in The City’s cannabis equity program, which is intended to lower barriers for those hardest hit by the war on drugs.

However other equity applicants who were rejected for a spot in the highly-desirable neighborhood are raising concerns over the fairness of the application process, alleging the group whose application was accepted had an advantage due to political connections and inside experience.

The equity program, which aims to help those with previous cannabis arrests get work in the industry, was approved in late 2017 and began accepting applications in May 2018.

Under the recreational cannabis regulations, The City is only allowing equity applicants to open new storefronts in San Francisco at this time. Thursday’s hearing marks the first time that one of these applicants has reached the Planning Commission for approval.

SEE RELATED: Those impacted by the War on Drugs still wait for cannabis permits in SF

Because city regulations prohibit dispensaries within 600 feet of each other, there is effectively a limit on how many can be approved in a given neighborhood. In the Upper Haight, a currently-unnamed dispensary spearheaded by the Cole Ashbury Group LLC that plans to move into the space of publisher Silver Sprocket at 1685 Haight St. has been granted a permit by The City’s Office of Cannabis.

The LLC is comprised of CEO Shawn Richard, executive director of the anti-gun violence nonprofit Brothers Against Guns, neighborhood resident John Delaplane and Conor Johnston, former Chief of Staff for then-supervisor, now San Francisco Mayor, London Breed. Johnston left his City Hall post in 2017 to become a consultant in the cannabis industry.

Richard, who grew up in the Western Addition and called the now shuttered Boys & Girls Club at Stanyan and Page streets his “second home,” said that the equity program is badly needed.

“The war on drugs has affected the black communities and communities of color a lot. It made the crack babies — the high rate of pregnant mothers using drugs and having kids addicted to cocaine in their systems,” said Richard, adding that serving a three-year prison sentence due to a drug offense “changed my life.”

He described the Cole Ashbury Group, which has overwhelming support from neighbors and Haight Street merchants, as “a partnership with the local community and cannabis entrepreneurs that are trying to see something great up on Haight Street and bring back that enthusiastic feeling that [the street] once had.”

Shawn M. Richard, seen here on Wednesday, Feb. 13, 2019, is one of the partners in an Upper Haight dispensary set to go before the Planning Commission on Thursday. He described the project as “a partnership with the local community and cannabis entrepreneurs that are trying to see something great up on Haight Street and bring back that enthusiastic feeling that [the street] once had.” (Ellie Doyen/Special to S.F. Examiner)

In a letter penned to the Planning Commission on Wednesday, another equity applicant who vied for a storefront on the same block has alleged that the group received an unfair advantage in the process because Johnston was involved in trial testing of the application before it was made public.

“I am very capable of running a decent business on Haight Street and my due process has failed because the other party was given an unfair advantage over me because that person is connected to The City,” said Michael Musleh, owner of Haight Street’s Pork Store, who added that he is requesting “a fair shake” for all equity applicants.

Musleh partnered with two other local business owners around a business plan to bring a dispensary to 1673 Haight St., a space currently owned by Musleh and occupied by the Stanza Coffee Bar. Another applicant, the Seattle-based Have a Heart Compassion Care, also applied for an equity permit to open a dispensary at 1670 Haight St.

Office of Cannabis Director Nicole Elliott said that resolving the issue of multiple equity applications filed in a so-called “green zone” has been a challenge. “We made it clear that one will move forward and the rest will be on hold and if the first fails, the rest will move forward,” she said. “The only way to do that was by the [time] stamp.”

The Upper Haight “had three applications that overlapped” and the first, she said, came in “exceptionally fast and it was the most complete.”

That application belonged to Johnston’s group.

Asked whether he thought the application process was fair, Johnston said it was “lengthy, and definitely stressful at times — but we worked very hard to do as best as we could with it.”

“As a consultant I have looked at every different way that this process could be structured… There isn’t a perfect way, they all have flaws,” he said. “But I will say [the department was] very clear about their expectations and they did excellent outreach.”

According to the department’s application form, online applicants are cautioned that they “will need about two hours” to fill out the application.

Johnston said his group worked hard to “have all our ducks in a row,” and once the application process opened, “we submitted our application in eight minutes.”

A public records request filed by Musleh in October revealed that Johnston “had access to a prototype of Part 1 of the application prior to the official launch.”

In response to inquiries, the Office of Cannabis told the San Francisco Examiner that The City’s “Digital Services team did user-test a prototype of the application form with numerous individuals,” but said that the user-testing process “did not provide an unfair advantage to any applicant.”

According to the department, a complete list of the contents of the application was made available to all prospective applicants days before the application process opened, and “individuals who participated in user-testing were not selected on the basis of their political connections or any other unfair or inappropriate criteria.”

The department said user-testers did not have the ability to draft or submit an application form during the user-testing process, and the final application form “was modified after user-testing was completed.”

“Individuals who participated in user-testing had no access to the application after it was revised, except on the same terms as other members of the public,” said the department in a statement. “In fact, in the one instance in which a test user sought to review the revised application before its public release, the Office denied that request—precisely to avoid the kinds of concerns that are being raised now.”

Johnston confirmed that he and “many other people” provided feedback that “led to them fixing a major issue, without which the system may not have worked.”

“The final application process was different from what we tested and our testing did not provide us any advantage,” Johnston said, adding that “our competitors are grasping for some reason to say the process — which they knew about fully in advance — was unfair. It wasn’t. We just worked harder.”

lwaxmann@sfexaminer.com

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