Is this something we will start seeing all over the country?
Rules and regs are made to make “space” is made for “Equity Licenses” but it sounds as though proper investment isn’t being made into the sector allowing the big money and the more shark-like to grab the market .. for example today we’ll be reporting in our press release section the umpteenth announcement by High Tide this month that they purchased/opened yet another retail store somewhere in the country.
That’s the problem with rampant hyper capitalism those with the deepest pockets who are willing to go to the lowest common denominator will win the day, all the time wittering on about how into community they are knowing that enough people will believe them whilst they grab yet more real estate.
If it can’t work in Oakland we’d suggest there’s something wrong with the system and loan forgiveness isn’t going to solve the problem
MJ Biz report..
Marijuana regulators in Oakland, California, have begun referring a handful of social equity licensees to the city’s collections department after they defaulted on loans intended to help get their companies started.
The situation illustrates both how difficult it has become for mom-and-pop businesses to succeed in California’s legal marijuana industry and the tenuous nature of social equity companies, industry insiders said.
“We can’t send our most vulnerable, impacted people into debt, and this is exactly what this is doing and exactly what we were fearful of,” said Amber Senter, the CEO of Oakland-based Makr House, who has worked for years with Oakland on crafting its social equity program.
According to a report shared with the Oakland Cannabis Commission on Oct. 7, 59 social equity license recipients have secured $3.7 million in loans from the city that were issued beginning in late 2018.
About 60% are “in compliance” with the terms of the loan, according to the report.
In May 2020, the city – realizing that some of those recipients were already having trouble repaying the loans – authorized modifications to the terms “to assist equity loan borrowers who have become delinquent on their loans,” according to the report.
So far, about 12% of loan recipients have had their repayment terms modified.
But that apparently wasn’t enough.
According to the report, at least 7% of loan recipients – or four license holders – has “fallen so far out of compliance and not pursued a loan modification that they have been forwarded to collections.”
In addition, the report noted, another 34% – or 20 license holders – are considered “out of compliance” with their loan repayment schedules.
About half those are “only one or two payments behind,” the report states.
City will consider loan forgiveness
An Oakland spokesperson wrote in an email to MJBizDaily that “staff will continue to work with the Cannabis Commission and City Council on whether and how to forgive loans of cannabis equity applicants.”
The spokesperson declined to answer other MJBizDaily questions about what caused the loans to be sent to collections and what might happen next for those in default.