Talking Equity in Cannabis With Christine De La Rosa
A year ago
Cannabis reform and legalization has been—and continues to be—a hard-fought battle. No one knows this better than the people who have unjustly had to bear the brunt of the drug war, namely people of color. Most of us in the cannabis space are aware that people of color have been unfairly targeted for prosecution on cannabis charges. Many of us have repeated this as a reason to support legalization, to end these arrests and create legal opportunities for all.
But as more states allow cannabis businesses to operate legally, and opportunities to enter into this new legal space seem plentiful, we need to ask whether the current system is actually helping to repair the damage. Is the legal marijuana industry offering opportunities to marginalized groups like people of color, women and LQBTQ folk? Or is this system just offering another avenue for the already rich to get richer?
In the chorus of triumphant cannabis business owners, finding themselves on the other side of the fight to pass cannabis laws, get licenses and become legitimized, is Christine De La Rosa, principal and executive officer of The People’s Dispensary in Oakland, CA. She’s one of a small handful asking what her company can do to help bring more equity to the cannabis space.
We sat down with Christine to hear her views on cannabis, equity and what we can do to help keep this conversation and movement go forward.
What first brought you into the cannabis space?
Christine De La Rosa: On Thanksgiving Day in 2010, I almost died. I had a double pulmonary embolism in my lungs. I'd been sick for about three years prior to that, but nobody could diagnose me. And so, when this event happened, they diagnosed me with acute system lupus.
They put me on a lot of medications including steroids, opioids, other medications that really didn't do anything for lupus, but they were trying everything. In 2012, I almost died again. My heart was filled up with a lot of fluid, and it was crushing my heart.
At that point, they put me on five different opioids. I was on: Oxycontin, hydromorphone, hydrocodone, fentanyl patches, tramadol, Lyrica and gabapentin. I was on about 11 different medications. And then when those didn't really seem to be working, they kept me on them, but then they added a monthly infusion that was called a Benlysta. It was about $14,000 for one treatment a month.
Then one day, I realized I was taking 11 pills a day, and I was like, "Wow, I'm 45. I'm taking 11 pills for the illness that I have. None of them seem to work really well. If I get to live to 65, what will my pill bottle look like?"
I made a decision at that point that I was going to try to find holistic methods and started doing a lot of research. I just sat there looking at stuff. And I kept coming across cannabis and CBD (cannabidiol).
So, I started taking massive amounts of CBD every day, and by the seventh day I woke up for the first time without any pain. I jumped out of bed, and I started walking immediately. I didn't have to stop and check my feet and make sure. I started crying, because I was thinking, "Wow, I could have been like this for seven years prior, when they diagnosed me." So, I just started using CBD, and I started to decrease the 11 pills until I was on no pills.
What’s the mission of The People’s Dispensary?
CD: The mission of the People's Dispensary has always been to embody, embrace and encourage equity in cannabis. It doesn't seem brand new because everybody right now is talking about equity and cannabis. Every city is talking about equity in cannabis. Every newspaper, every major cannabis magazine is talking about equity in cannabis. Except actually what they're talking about is entrepreneurship in cannabis and not equity.
Equity means that I, as an owner of a business or an investor in a business, was able to do what anybody else is able to do to get equity. So that means I should be able to invest in a cannabis company. I should be able to get funding for cannabis companies. That's what equity actually means.
I think Oakland did a great job in starting the conversation, and they did the best they could. But they don't have equity here. They give out all of these equity licenses to whoever bought one. But I can tell you half of those people aren’t running cannabis businesses because they didn't have the funding, or they got funding, but were screwed over by their incubator.
Giving somebody a license, it's actually not equity, it's entrepreneurship. Equity means that you should have equity from the cannabis market.
How are you working to improve equity in the cannabis space?
CD: We have a three-tiered equity program for The People’s Dispensary.
First, we allow non-accredited investors to invest in our company. Right now, the cannabis industry is incredibly white and male. But the reason is because they're accredited investors.
To be an accredited investor, you have to have made $200,000 two years prior to your investment, the year of your investment, and have a reasonable expectation that you're going to do so the year after your investment. Or you can have $1 million in liquid cash that doesn't include your primary residence. These are the people who are allowed to invest into companies.
Well, when we were putting up our raise together, I realized there was going to be nobody in my family or the other founders’ family or people in our community that would qualify as an accredited investor. How do we bring generational wealth to communities of color, women and the formerly incarcerated in ways in which they don't have to try to get a license, try to find some funding, quit their day job and hope that their company is successful in five years?
So, we figured out how can we get non-accredited investments, where people can invest as little as $1,000 or up to $50,000. We just finished our first non-accredited raise for Oakland, and we have 71 small investors, and they raised almost half a million dollars.
We want people to be able to invest and go about their day, continue with their jobs or whatever they're doing and then in three years hopefully it will be as successful as we predicted. And we'll be able to pay them out, so they can create generational wealth for their families.
Wow. That’s a powerful plan. You said it was just one part? What are some of the other ways you’re working towards equity?
CD: The second tier of the equity program gives back to employees. In Oakland, it's really hard to find housing that's affordable. So, we decided that part of the benefit packages for our employees is that they will receive a housing stipend. That way we can have people live in the community in which they work.
But we're also opening up in Fresno, which doesn’t have a housing problem. Their problem is different. They can't get down payments for a home. So, we would do something that helped with that. So, each community that we're building in has a different housing need. And so, the housing plan for the employees would match the community.
The third tier is giving back to the community. A lot of the applications that we've seen in the city of Oakland ask, "How are you going to beautify Oakland?" I think that that's a really great thing, but my feeling is that in a $44 billion industry, we should do more than plant flowers.
So, we created a rapid response impact fund and every one of our accredited investors, so anybody that's invested $50,000 or more has to invest 10–20% into the impact fund of the community where the dispensary sits. And the dispensary will match those funds.
Every city can decide how to use this fund differently. So, for instance, here in Oakland, we picked a board of people that’s working on three of the biggest problems we've seen in Oakland:
- The sex trafficking of young girls
- LGBTQ homelessness
- Homelessness in general
But in Fresno they have a lot of gang violence. So, their impact fund is going to focus on gang violence.
It’s going to be a blended fund, so that we can do both grants for people who need it for things like buying blankets for the homeless when the temperature drops too low. But also to have people that have an equity license to come and get a loan from the impact fund of that community. So, we can help in creating their businesses.
That’s wonderful. Do you have any examples of businesses that you’re helping through this fund that you can tell us about?
CD: We had a group of three young former gang members. They came to me and said, "We're in Fresno. We’re builders, and we want to rebuild grow houses. But we've been doing it illegally, and now we want to be legit."
And so, we gave them a thousand dollars to file the articles of incorporation, get their business license, set up taxes and get a couple of tools they're going to need. And they've already gotten three jobs.
The thing in the cannabis discussion that we really have to think about is what are we doing in the market to make sure that we're supporting people who have equity licenses that are supporting generational wealth and giving back to communities that had been historically criminalized for cannabis. What are we doing about that?
Do you have any advice for other companies in the cannabis space that are also hoping to improve the situation on equity?
CD: Yes. Forty-four billion dollars. Put your money where your mouth is. That's really the thing. Eighty cents on every dollar spent in cannabis was taken home by the dispensary. I always feel like as a dispensary it's on us. How can we get even $1 billion of that $44 billion into impact funds or some type of funds that directly impact your community in cash money? I think that's important.