Cannabis firms ask Oakland for 2-year tax break
Jolted by a recent string of burglaries and bursts of gunfire, cannabis merchants in Oakland made a spirited plea to city and state leaders on Monday: Stop taxing us for two years.
“We are here today because cannabis businesses in Oakland are under attack,” Amber Senter, CEO of a local cannabis firm, said at a news conference outside City Hall.
Senter and several other business owner presented a list of demands: a cannabis liaison in the Oakland Police Department’s command staff; a faster police response and follow-up investigations of violent incidents; repeal local cannabis taxes for all businesses regardless of size; a reprieve from the state cultivation tax; and a significant reduction to the state excise tax.
Oakland’s cannabis sector is reeling from a spree that occurred the weekend before Thanksgiving, during which perpetrators broke into more than 25 licensed cannabis operators, “vandalizing stores and offices, and stealing products,” leading to losses of more than $5 million, Senter said, noting that the incubator she runs, EquityWorks, was among the burglary victims.
“We need more protection,” Senter said. “We need more funds and resources to improve security so that we can protect ourselves.”
In addition to her work as a business owner, Senter cofounded the nonprofit Supernova Women, which advocates for women of color in the industry.
Among the speakers were several cannabis business owners, some licensed under Oakland’s Cannabis Equity Permit Program, which the
“We need more funds and resources to improve security so that we can protect ourselves.” Amber Senter, cannabis firm CEO
City Council approved in 2017 to prioritize people of color and formerly incarcerated entrepreneurs victimized by the War on Drugs, offering them loans, grants and business coaching to gain a leg up in the industry.
Two years ago, the Oakland City Council voted to give tax breaks to cannabis businesses over objections from Mayor Libby Schaaf, who warned that the cuts would cost the city jobs and nearly $12 million over the course of a year and a half.
Under the new rates, recreational businesses that make $500,000 or more in gross receipts were taxed 6.5% in 2020 and 5% in 2021, while recreational establishments making $5 million or more were taxed 9.5 % in 2020 and 8% starting this year.
By next year, businesses that make between $750,000 and $1.5 million will pay 4% taxes, while those making more than $1.5 million will have taxes set at 5%.
Oakland funded the cuts by eliminating jobs in the Police Department, Fire Prevention Bureau, Economic & Workforce Development Department and Cannabis Equity Program.
Despite those concessions, Senter told The Chronicle that taxes are crippling the local industry. She said advocates and merchants chose to focus on taxes, rather than asking the city or state for grants to pay for repairs and stolen merchandise, because grants are also taxed.
Participants at the news conference Monday had differing ideas about the best approach to policing and security, though they seemed to agree on one point: Cannabis businesses are uniquely vulnerable to burglaries and robberies, and the city is not doing enough to protect them. A few warned they would have to leave the city if Oakland does not offer more economic aid and create a better business environment.
Salwa Ibrahim, owner of the Cookies Retail shop, criticized the City Council and Schaaf for failing to provide adequate security to the cannabis industry or to adequately staff the Police Department, whose officers are “often outnumbered and outgunned,” she said.
She appealed to local businesses to join cannabis merchants in a tax strike until the council and mayor declare a state of emergency over the recent spate of violence.
Chaney Turner, chair of the Oakland Cannabis Commission, described the local cannabis sector as endangered, faced with escalating violence and a seemingly indifferent political establishment. “We just want people to be safe and smoke their weed in peace, and run their businesses,” Turner said. “The purpose of legalization and equity was to generate wealth for communities and individuals who were harmed by the drug war. Now these same people who were harmed by the drug war are being harmed by not being protected by the people who are paid to protect them.”
Several City Council members attended the news conference but did not speak.
Oakland spokesperson Harry Hamilton said it’s unclear how much money the city would lose if cannabis businesses did not pay taxes for two years, but that over the past two years, Oakland collected $22.36 million from these businesses.