Sprouting a pot industry the right way
In a dark room, Jahful Price slowly worked a row of pungent plants guided by his headlamp.
He wore a white biohazard suit, methodically picking up cannabis plants by their stems and hanging them upside down on a rack with plastic clothes hangers.
Price, a 31-year-old Oakland resident who is black, is getting hands-on experience in cannabis cultivating that he hopes will help him run his own business one day.
Since July, he’s had a paid internship at NUG, a cannabis business owned by Bloom Innovations, a horticulture consulting and management firm in Oakland. NUG chose Nine Mile Tribe, a business owned by Price’s family, as one of its equity partners.
The partnership — and the opportunity it’s created for Price and others — is how Oakland’s
cannabis equity program should work. It should be a training ground so people of color don’t flail and get left in the dust of California’s marijuana gold rush.
Oakland’s cannabis ordinances require the city to give at least half of all available cannabis permits to people who were convicted of a marijuana-related offense in Oakland, earn an income less than 80 percent of the city average or have lived for 10 of the past 20 years in an Oakland neighborhood that saw a disproportionately high number of cannabis arrests. General applicants may also apply under the equity program by agreeing to “incubate” equity applicants by providing 1,000 square feet of free space.
A look at NUG and its partnership with Nine Mile Tribe in East Oakland shows it’s working.
“It should be like this for every equity applicant in Oakland,” Price told me when he took a break from sweeping fallen leaves. “It would be helping them get the education that they need from just learning the business part.”
Because he’s grown with NUG, Price will be able to cultivate a top-notch plant as soon as he gets his own greenhouse. But he wants to do more than grow pot.
“He’s just part of the crew, so it’s great,” said John Oram, the white CEO of Bloom Innovations. “Now he’s expressed interest at looking at other departments, so we’ll make that happen.”
Bloom distributes cannabis products — seeds, flowers, concentrates, infused edibles and more — under the brand name NUG, a Bloom subsidiary. Bloom, which employs more than 100 people, is incubating six equity applicants. Two companies have taken paid internships.
Last month, my colleague Sarah Ravani reported that Oakland received 255 applications for business permits to cultivate, sell, distribute and transport marijuana legally under the state cannabis laws that take effect Jan. 1. More than half — 129 — were equity applications.
I support the idea of the equity program. But what bugs me is that Oakland hasn’t provided specific guidelines on how the equity program should work. That’s been left up to partnerships between general and equity applicants to figure it out on their own, and I’ve heard not all relationships are budding like the one between Nine Mile Tribe and NUG.
“The concept is beautiful, but you gotta really define what it means to be incubated,” said Charles Byrd, Price’s uncle and a partner in Nine Mile Tribe. “They’re not fully developing that concept. Incubation is more than just providing the space.”
Byrd’s sister and Price’s mother, Lynda Byrd, is the CEO of Nine Mile Tribe. She satisfied Oakland’s stringent equity qualifications, barely meeting the residency requirement. The three met Jessica Rountree, NUG’s equity program manager, at a cannabis mixer at City Hall in May.
“What I was looking for were not just people that fulfilled the requirement, I was looking for something that was mutually beneficial,” Rountree said. “It’s actually a mentorship, a partnership where we work together.”
The six businesses that NUG is incubating will have 1,200square-foot greenhouses on a lot in East Oakland. More importantly, they’ll have access to the operation of a thriving business. According to Oram, NUG has 450 sales accounts throughout California.
I recently visited NUG’s East Oakland warehouse, and Oram gave me a tour. In the middle of NUG’s office is a display case of the company’s products. Everything — cultivation, cloning, trimming, extraction, infusion, packaging — is done under one roof.
There are separate rooms for different stages of a plant’s growth cycle. Plants are treated with biological pest control, tiny microbes that kill bugs so other plants aren’t contaminated. A central computer system controls the nutrients and water delivered to plants. The computer also controls heating and cooling, lighting and irrigation.
NUG designed the tables and trays for their plants, as well as the racks that are used to transport harvested plants to the room where they sit for 10 days to dry and cure.
NUG, which harvests twice a week, tracks the entire history of plants, including who trimmed it. When I visited, 35 people were trimming plants by hand. Two unplugged trimming machines collected dust nearby.
“We’ve tried a few of these and they just don’t produce the quality,” Oram said. “We’d rather do it all by hand.”
The automated greenhouses for NUG’s equity program will have augmented lighting and an irrigation system.
“They’re going far and beyond what the requirements are,” Byrd said. “And they’ve been kind enough to extend us a loan as part of this process, and nobody else is doing that.”
It was a $10,000 loan — with no interest. Really, who does that?
“I don’t want to just check the box and move on. I want to do it extremely well,” Oram told me. “I could’ve just put up six, 1,000-square-foot cheap greenhouses and said, ‘Here you go.’ But there’s no guarantee of success.”
The equity program requires the incubator relationship to be consistent for three years, Oram said. If an equity applicant’s business fails, then the general applicant is at risk.
“You could have three years of failed relationships,” Oram said. “I didn’t want that to happen. I really want to see our partners thrive and succeed.”
NUG even paid for an attorney to review the 25-page contract Nine Mile Tribe signed with NUG. Byrd chose the attorney.
“We couldn’t afford to pay the money, but the group paid for it so we really got a square deal,” said Byrd, who estimates the value of the three-year incubation at $270,000.
There’s another deal on the table for when Nine Mile Tribe harvests its first crop: Oram has offered to distribute the product.
“They don’t ever have to worry about distribution if they don’t want to,” he said.