Felicia Shaw is an Oakland native, Topical Applications Instructor at Oaksterdam University and founder of the Mystic Herbal Care Collective. She’s also the first dynamic woman of color to be featured in EstroHaze’s Journey to Licensure series, chronicling the experiences of female ganjapreneurs as they traverse the complex terrain of California’s new recreational regulations.
The commencement of recreational cannabis sales in The Golden State may be cause for celebration, but the increased taxes and lengthy red tape presents a real threat to long-time canna-business owners; particularly those of color.
All cannabis companies are required to operate under new licensing laws which comes at a high price for both consumers and owners – those who’ve manage to stay in the game, that is.
Which brings us back to Ms. Shaw, who is in the process of obtaining a license to maintain operation of a successful, 8 year old topical cannabis enterprise. In addition, she’s seeking a distribution license to provide a space for aspiring people of color to create and package edibles. As equity applicants, she and business partner James Walter persevere in a rapidly changing industry where women and folks of color are becoming even fewer are farther between.
Can you tell us about how you got into to the cannabis industry?
Shaw: I used to make soap, body butters and lotions so when I took a class at Oaksterdam in 2009 I was inspired to make my own line of cannabis infused topicals. I was already a cultivator so I started infusing my products and got amazing results. Harborside was the first cannabis club to stock my products. In about 2 years I was selling to about 20 cannabis clubs in the Bay Area.
What year was Mystic Herbal Care founded?
Mystic Herbal Care was founded in 2010. A little over a year ago I started my delivery service. So now I [operate] both businesses.
Where are you in the process of getting obtaining your business licenses?
My business partner (James Walker) and I have our temporary state license which we obtained on January 1 for non-store front delivery service and we’re in the process of obtaining our state licenses for non-volatile manufacturing and distribution.
We already received our state license for delivery. Ultimately, we’ll have a micro-business license that will encompass all 3 of those businesses.
Most people don’t understand how complex it is to pursue licensure. What are the steps required to get an equity license?
First, you have to obtain a city permit which involves filing out an application and getting a background live scan. You’re required to disclose how long you’ve lived in the area and your income (which must be below $52,000 a year).
You have to be a current resident in a high-crime area of Oakland, which is specified – and you have to have lived there for at least 10 years.
Once that’s done, you have to find a location, which is a big challenge because it’s limited to specific zones depending on the type of business you wish to do. For example, cultivation is [authorized] in one area, then you may have to get a building somewhere else for manufacturing. It’s very difficult to find a building that will allow you to do everything.
Once you secure the location, you have to get a business license and a lease agreement. Then the City of Oakland decides if they will approve you or not.
If they do approve, you send your application to the state (Bureau of Cannabis Control) which also has its own application and series of requirements.
Once they sign off on the application, you’re awarded a temporary permit allowing you 4-5 months to bring the building up to code (which the fire and police department must approve). Once those documents are sent back to the state, they can issue an annual license.
What are the differences between operating a canna-business now versus before January 1, 2018?
I have been in business for 8 years and there’s a huge difference as far as the income because it costs a lot more [to operate]. Unlike before the first of January, you now have to secure buildings, leases, permits, advertising. Also, we can only do business with others who are licensed.
Luckily, because we’re equity applicants, we don’t have to pay for the inspections, applications fees or rent for the first 3 years. There’s a lot of competition now, however. It’s helpful that I have so many connections already but the challenge is coming up with the money that’s required in order to grow.
Finding the operating space is also very hard. As equity applicants we are able to connect with general incubators that are supposed to help, although we are not required to do so. That’s not always a good experience either because you’re basically working with folks that you don’t really know. You have these people from the outside trying to get a piece of [the action] and it’s hard to trust them.
Recreational is great but there are obviously some drawbacks.
The drawback for our customers is that they’re going to have to pay more because of taxes. Doing things under the table allows you to make the price lower; it also changes the demographics of the consumer.
The biggest challenge is to make sure we protect ourselves as equity candidates and not get taken advantage of. We’re trying to find investors like ourselves. I have met a couple of African American investors that we may end up working with but we are still in the vetting process. It takes a tremendous amount of patience, trust and a lot of knowledge before you make that final decision.
James Walter: As African American business partners, we are in a situation where we’re on the ground floor of the industry here in California. We take a lot of pride in our decision making because we don’t want to get cheated again.
Cheated again? Please explain.
FS: The area is becoming more gentrified because outsiders are attracted to the cannabis industry.
JW: Ultimately people of color are slowly migrating to outside of Alameda County. Then they require that you must have a business to give you a leg up to get this license. Yet, the person you are to lease from is a person from outside the area who’s bought a building in Oakland.
FS: Such a good point James. We’ve looked at so many buildings and it’s hard to find a property owner of color. We’re basically still at the mercy of white folks who’ve just moved to the area and been lucky enough to own a house or building in a cannabis zone. They basically get to choose who they want to lease to. This is why the equity program is so great. It gives property owners an incentive to lease to us. I honestly don’t think we would be at this stage if we were not equity candidates.
How do they try to take advantage of equity applicants?
FS: We may go look at a place and tell the [property owners] that we’re interested, but as soon as we disclose our plan to operate a cannabis business, the rate goes from $1.50 per square foot to $3.75 per square foot. These are the ways they try to take advantage of us.
Here’s another example: A lot of folks interested in getting a license are unqualified because they aren’t from Oakland so they look to use equity applicants as a way in. We have one particular general incubator who is supposed to supply a building for us. We got the temporary license, we’ve past nearly all the inspections, yet he proposed that we sign over our license to him so he can control everything. I couldn’t believe he asked for that. This is a serious thing and I’ve talked to other equity folks who’ve told me similar stories. Why would I sign my license over to someone when all he’s doing is paying the rent for 3 years?
How have things progressed with that potential arrangement?
FS: He has since changed the locks on the building, and as soon as we got the license (and did not sign it over to him), he said he would put everything on hold until he can find a way to get our license signed over to him. We’ve both told him it’s not going to happen.
JW: He said he wanted to help the community. I told him, I am the community.
FS: Luckily we have another incubator, she’s a woman who owns an awesome building. She specifically sought me out because she wants to help black women in the cannabis industry.
I personally feel that there’s this jealousy from a lot of general incubators – they’re not happy about the reparations. You can feel the hostility in some situations. They feel like we’re getting something we don’t deserve, but you have to remind them of the numbers of people that have been arrested for cannabis possession.
During my discussion with Andrea Unsworth, I became aware of some of the risks many equity applicants face due to the lack of business experience and professional network. What are your thoughts on the matter?
During my next meeting with the city, I plan on suggesting that they partner with people of color in the equity process, not just partnering us with general incubators. I think they’re assuming that these incubators for one, have the kindness in their hearts to help us – NOT (laughs), and secondly, are willing to invest anything.
What advice can you share with other folks who are interested in obtaining an equity license?
Thanks to people like Andrea and Laniese Martin and people who’ve put together free workshops and panels to educate and motivate people. Yes, I had experience but those workshops excited me, motivated me to do better and gave me support. These workshops are where I learned a lot of what I’ve shared with you.
Women and people of color in the cannabis industry were damaged so much [by the War on Drugs]. We had families destroyed. We deserve the chance to succeed with support of Oakland and California.