Oakland pot permit plan deadlocked in City Council committee

Councilwoman Desley Brooks looks on during an Oakland City Council public city committee meeting discussing African-American recruitment and retention in police force, at City Hall in Oakland, CA Friday, October 13, 2015. less Councilwoman Desley Brooks looks on during an Oakland City Council public city committee meeting discussing African-American recruitment and retention in police force, at City Hall in Oakland, CA Friday, ... more Photo: Michael Short / Special To The Chronicle Photo: Michael Short / Special To The Chronicle Image 1 of / 1 Caption Close Oakland pot permit plan deadlocked in City Council committee 1 / 1 Back to Gallery

Oakland officials deadlocked Tuesday on a controversial proposal to require cannabis businesses to hand over money and power to the city, following an acrimonious public hearing at City Hall.

The plan by Council members Desley Brooks, Larry Reid and Noel Gallo would require all pot businesses — and anyone who leases property to a pot business — to give 25 percent of their profit and at least one seat on their board of directors to the city in exchange for permits to operate. Money reaped from the arrangement would fund council district activities, loans for aspiring entrepreneurs, community beautification and three job training programs run by politically connected people. The plan would also restrict cannabis operating permits to people who have lived in Oakland for at least five years.

Opponents say the plan would choke off the city’s pot trade. Supporters claim it would generate vital revenue for the city and allow city officials to impose racial equity on the multibillion dollar industry, given that most of its top players are white.

“When you look across the U.S., the majority of people making money in this industry are white males,” said Brooks, the lead author of the proposal. “We need to make sure we pass something that is going to level the playing field for everybody.”

She and Gallo clashed with Councilmen Dan Kalb and Abel Guillen when the plan went before the council’s Public Safety Committee Tuesday, prompting an at times raucous debate. It’s in limbo for now, and all four council members say the equity issue is far from settled.

“I think we need to get this right,” Kalb said. “What we have here today doesn’t get us there.”

Brooks said her proposal would help bolster an equity permit program that the council passed in May. Designed to right the perceived wrongs of the U.S. war on drugs, the equity permit program reserves half of Oakland’s cannabis permits for people who were jailed on marijuana convictions in Oakland over the past decade or who have lived for at least two years in a designated East Oakland police beat where marijuana arrests were highly concentrated in 2013.

At least one such person must have a 50 percent ownership stake in a pot business for it to qualify for the equity program.

Frank Tucker, a longtime friend of Brooks who heads the mentorship program 100 Black Men of the Bay Area, praised both the program and the council member’s new proposal.

“I’ve heard it’s illegal for the city to have ownership in a company — it’s illegal because you’ll find any excuse you can to keep the brothers out,” Tucker said.

But others accused the city of trying to extract profits from a business sector that’s expected to boom as Californians prepare to vote in November on whether to legalize recreational marijuana. Many said that Oakland’s cannabis enterprises will flee to other cities if the plan is approved. Some, including Kalb, also denounced the equity program, saying it helps a small group of people but leaves out the vast majority of would-be pot entrepreneurs in Oakland, including people the city says it wants to help.

Brooks said the council members will have to come back at some point with a new proposal that melds all of their competing ideas. State law requires all cannabis enterprises to have a city-issued permit by 2018.

Rachel Swan is a San Francisco Chronicle staff writer. Email: rswan@sfchronicle.com