San Francisco’s cannabis equity program has had a slow start since cannabis was legalized last year but with two more applicants approved this past week, it is growing and may get a staffing boost thanks to Mayor London Breed’s budget proposal.
Two more storefront retailers who qualify for the equity program were approved by the Planning Commission this past week, bringing to the total six which have received approval, the Office of Cannabis said. But hundreds of equity permit applications remain under review, according to city officials.
While San Francisco allowed existing medical dispensaries to transition to recreational sales shortly after the drug became legal statewide in 2018 — there are currently 34 selling cannabis from storefronts — The City said it would initially grant new outlet permits to benefit those who were disportionately impacted by the War on Drugs, such as those arrested for possession of cannabis or living in low-income neighborhoods.
However, the approval process has crawled along.
On Thursday, the Planning Commision approved Eureka Sky, at 3989 17th St. in the Castro and 1398 California St. on Nob Hill.
Christopher Callaway, equity applicant of Eureka Sky, told the commission he moved from Detroit to the Bay Area 20 years ago to get into the medical marijuana field, but was arrested and charged with three felonies for having a “small number” of marijuana plants that sheriffs found in one of the closets in his Oakland home.
“I can look back on this and laugh now,” Callaway, now a San Francisco resident, told the commission. “The equity program is creating an opportunity to transform the worst experience of my life into one of the best opportunities I’ve ever had.”
Drakari Donaldson, equity applicant for 1398 California St. and CEO of California Street Cannabis Company, told his story of growing up a person of color and being raised by a single mother in Section 8 housing in Potrero Hill and in North Beach. In 2007, he met businessman Ben Bleiman, who would become one of his partners in the cannabis business, through the Big Brothers Big Sisters program. Donaldson began climbing the ranks in Bleiman’s bar businesses like Tonic and Bullit.
These handfuls of equity applicants have yet to open. There are other steps they must take after the initial approval similar to other businesses, such as approval by the Fire Department.
The first equity applicant approved by the Planning Commission in February at 685 Haight St. by the Cole Ashbury Group LLC expects to open in early October, said co-owner Conor Johnston, who was Breed’s Chief of Staff when she was District 5 Supervisor and President of the Board of Supervisors.
Equity applicant Rodney Hampton Jr.’s hopes of opening up CDXX Cannabis and Retail Consumption Lounge at 4526 Third St. in the Bayview came closer to a reality with Planning Commission approval in May. He said they are on track to open at the end of the year or early next year and are currently awaiting approval of the layout design by the Department of Building Inspection to start the build out of the space.
The other two approved, for a total of six, are at 828 Innes Ave. and at 906 Post St.
A long line of other applicants remains.
To expedite the permitting, which has faced criticism for the pace of approval, Breed’s budget proposal includes adding two permit reviewers and an analytics staffer to the Office of Cannabis, doubling the positions there, and two staffers with Office of Economic and Workforce Development to assist equity applicants.
In the proposed budget, the Office of Cannabis’ budget would increase from $700,000 to $1.1 million.
The hiring plan faced push back Thursday from Supervisor Sandra Lee Fewer, chair of the Board of Supervisors Budget and Finance Committee. The committee began reviewing Breed’s budget proposal last week.
The concern over employee growth isn’t just for cannabis. Breed’s budget proposal for fiscal year 2019-20 has 31,830 government jobs, a 7.7 percent increase from the 29,552 jobs in fiscal year 2015-16.
“It just seemed kind of heavy on the cannabis stuff,” Fewer said last week. The committee is expected to start to making funding decisions as early as this week as the budget review continues.
City Administrator Naomi Kelly, who oversees the Office of Cannabis, said, “We’ve got a lot of requests from everyone, from all stakeholders that we need to increase the permit review to get these applications done faster.”
Ken Bukowski, Deputy City Administrator, said, “We have over 300 equity applicant permits right now under review. In order to get through and process and work with those equity applicants we need additional staffing.”
For storefront retail alone, the Office of Cannabis said earlier this month that there are 89 pending equity applicant applications and nearly 30 were referred to the Planning Department for approval.
Fewer did acknowledge the office didn’t launch with adequate resources to succeed.
“I think we can agree that we started this Office of Cannabis understaffed,” Fewer said. “Quite frankly, we didn’t know what we were doing.”