Making Community Count

Features - Guest Interview

Berkeley Patients Group’s Etienne Fontan and Lightshade’s Steve Brooks share how they’ve changed the narrative on cannabis in their communities by establishing corporate responsibility plans.

April 12, 2018

Photography: © Mark Madeo

Berkeley Patients Group (BPG) has been around a long time. Think of it this way: If the California medical dispensary was a person, it would be of age to legally obtain a medical card. Opening its doors in 1999, BPG is now in its 19th year of serving the Bay Area, making it the nation’s oldest medical cannabis dispensary.

In those nearly two decades, BPG has become an industry stalwart, if not the model example, for corporate social responsibility (CSR). In addition to providing free medicine and ancillary wellness services to its patients in need, BPG also donates time and money to many local organizations. (Its website lists 18 organizations and notes they are “just a few” of the ones it contributes to.) Giving on such a grandiose scale has allowed the dispensary to become a community pillar and garner overwhelming resident support.

As the cannabis industry continues to weave itself into the fabric of American society, many dispensary owners recognize CSR and philanthropic efforts as the industry’s conduit to mainstream acceptance and legitimacy. Here, Steve Brooks, CEO of Denver-based Lightshade (a vertically integrated cannabis company), talks with BPG’s co-owner and vice president, Etienne Fontan, about recent changes to Berkeley’s cannabis regulations, BPG’s commitment to CSR (and why it takes it so seriously), ways dispensaries can get involved in their communities and more.

Steve Brooks: How are things going out there in California so far?

Etienne Fontan: Going good, [but] not without its own set of challenges. We just passed in our city council [the declaration of] Berkeley [as] a “sanctuary city” for cannabis, as well as lowering the city tax from 10 percent to 5 percent to make [the city of Berkeley] more competitive. [Editor’s note: As a “sanctuary city,” Berkeley prohibits its “agencies and employees from using city resources to assist in enforcing federal marijuana laws or providing information on legal cannabis activities,” as explained by the Los Angeles Times.]

The taxes impact us on different levels. A 10-percent city tax in Berkeley affects every line in the supply chain. It's a 10-percent tax for the grower, 10-percent tax for the wholesaler, 10-percent tax for testing, then a 10-percent tax at the retail level. So, it turned out to be a 40-percent tax in Berkeley. … They're also looking at removing the tax regarding laboratories, because they see that as a useless place to add tax into the supply chain.

We're dealing with the challenges of the newer California regulations. We're operating currently under the emergency regulations and not the permanent regulations. So, constantly being active is one of those realities that have led [Berkeley] to be leaders in the industry, as well as around the Bay Area, because what our city council did will be reflected in other cities across California.

Berkeley Patients Group is the oldest dispensary in America, and donates time and money to more than 18 charities, in addition to providing its patients in need free medicine and ancillary services.

[BPG] learned early and often that lobbying and working locally is key to your long-term survival. If you don't have city council love or respect, that can lead to constables or sheriffs who don't like you, and then that leads to you getting busted.

Brooks: In Colorado, we've got an excise tax on production. And that is 15 percent of whatever the market price is, and the state sets that price. So, you have that tax, but that's only on cultivation. There's processors and labs. They don't pay that tax unless they're cultivating, which labs, obviously, aren't. But then on the [recreational] side, we pay an additional 10-percent tax at the time of sale for the state and then an additional 5 percent to the City of Denver, where we mostly operate.

Fontan: And your taxation at 5 percent is how we arrived at that, so we thank you.

Brooks: Why did BPG decide to make giving back to the community a priority?

Fontan: For the simple fact that it's our patients. Our patients are and have been our community.

All of our struggling points as providers [have been] to get people [educated], and going through the various challenges that are inherent when we are [working in a newly regulated market]. …

So, it's imperative that our community be made aware, because we have dealt—for 18 years—with a whole slew of patients. They've been educated about what these products are, their rights and the laws; whereas we're now dealing with a public at large that doesn't even understand the taxes that they have voted for, much less what their rights are. So, we have to always be educators. At the point of sale, you're educating as well as informing the clientele. …

Brooks: We definitely have our challenges here in Colorado. But Oregon's got supply issues. That's not good either.

Fontan: No. But Oregon also [dragged] its feet and really didn't take it as serious as Colorado did. I mean, let's be honest, Colorado was really the adult in the room … initially. So, [Colorado] implemented and took things properly in a direction that it needed to.

A BPG budtender, one of 120 BPG employees, assists a customer with a transaction.

So, we were very heartened when California decided to follow Colorado because as one of the largest economies in the world, we realized the repercussions that we were going to have. We love what you have done there in Colorado, but we're not mimicking exactly what's there. We have learned to listen from other states where they have had successes and failures, because we are neophytes in this regulation world. Whereas you're five years ahead of it.

We were given these rules literally less than 30 days before we had to open our doors under this new permitted system. We've had to build the airplane as we're flying. And we're used to that here in California.

Brooks: How did BPG choose an area of focus for its CSR?

Fontan: The majority of the initial creators of Berkeley Patients Group were activists. I'm a Gulf War veteran, so, for myself, I got involved after the Gulf War in '92 with Cannabis Action Network out here in California. I was very fortunate to do rallies in 47 states … so I had a lot of experience going around the country.

One of the things that I learned is that you have to listen nationally but act locally. We were big supporters initially of Marijuana Policy Project (MPP), Marijuana Majority, Drug Policy Alliance, Students for Sensible Drug Policy. Americans for Safe Access was created out of Berkeley Patients Group—out of our frustration of watching our dear friend, Ed Rosenthal, get arrested and have to go to trial.

We realized that we still had a national effort, and you have to fund those types of efforts.

Locally, we looked across the street. We have the Center for Early Intervention on Deafness, and they needed a playground. So, we were happy to donate a playground. Then we looked at things like the Women's Cancer Resource Center, Berkeley Food and Housing Project, and Lighthouse Community Public Schools.

You … listen to your community. It involved going … to city meetings, going to local neighborhood meetings. What's important to the community? For us, it became things like the To Celebrate Life Breast Cancer Foundation, Berkeley Youth Alternatives. We have multiple transgender employees, so we also realized the social implications, so we make sure to give to things like the local Transgender Law Center.

BPG customers can skip the line by using the store’s self-service cannabis vending machine.

We want to support healthy projects that are around locally. You can also look at things as simple as your library. Local libraries are losing their money, and they could use simple things like books. Those are easy things to start off with.

But then we look at the reality of those that are incarcerated. So, we support things like legal services for prisoners with children. We also support simple things like Toys for Tots at our Berkeley Police Department.

When they're raffling off something like a dinner at the firehouse, support that, contribute to it. Win it so that you and your staff can then go to that fire department and educate them and talk to them, because now you have their full ear, so you have a great chance to influence.

Brooks: Our focus has been mostly on veterans and poverty. We fund several food banks here in Colorado. And there's a few veteran's groups that we work with, too. Right now, we have eight retail locations here in Colorado, and our focus has been trying to find something within the community that each store services locally, just at that store, that can have direct impact on the citizens.

We've been working with a group locally here that helps find those opportunities. Then once we do, we work with them on a granular basis to figure out what their needs are and then try to help. Sometimes it's not just about the money. There’s other things they need that we could help them with, whether it's a food drive or they just want hand-warmers or toys.

Fontan: Our founder, Jim McClellan, passed away … due to AIDS, so we never forget our grassroots and that resolve of giving back to the community.

Now, even with the changes that are coming in California, we still are going to give back to our communities. We still donate cannabis to our patients. It's just now, they have to have the state card, as opposed to certain other registration requirements.

Brooks: How are your employees involved in CSR efforts?

Fontan: Actively listen to your employees. Your employees are one of your most important resources. When we have transgender employees, they educate us on the transgender needs as well as the legal realities. It made us aware of these organizations that were out there that needed legal help and support.

People tend to spend their money where they feel their money is socially going somewhere. So, when we had our original Berkeley Patients Group location, we had space to allow things like yoga and on-site consumption, [and] we would have people come in and assist with learning disabilities. We had people that would teach reading or knitting. And when [patients] gather in your area, they will also actively tell you about what they do and support. So, it's also important to actively listen to your constituency.

Brooks: What have been some of your favorite challenges?

Fontan: When Berkeley Patients Group was evicted by the federal government [in 2012], the City of Berkeley enjoined our case. If we had not been respectful of our community or our city council and our mayor, and working with them for years, we would have never arrived at that point or had that type of luxury.

But that didn't come without five years of blood, sweat, tears and frustration. And even though we're past that, they came after us again [in 2013] for [our current] location. So even though you may think the government has left you alone, you still sometimes may have to rely on your community for the ultimate support, and that's the biggest challenge.

One of Lightshade’s lobbies, which resembles a Colorado ski lodge.
Photo courtesy of Lightshade

Brooks: With things where they are currently in California, do you see industry CSR efforts changing? Do you think anything's going to evolve?

Fontan: One of the things we did early on was join our chamber of commerce in our city. Go to your chamber of commerce meetings. And now as a pillar of the community, start sponsoring those meetings and those gatherings.

You will find, when you go to these events, how much support you have in your community. And once your community is there, they're going to engage you and tell you what is needed in the community, and it's your job to actively listen. We're going to see that in California because all these businesses that have had to act underground now are pillars of their communities. Now they can be the philanthropists because they're taxed and regulated and respected. They're no longer those things that are told to hide in the shadows.

Brooks: In Denver, now it is required to have a community engagement plan. Is there anything required in California or Berkeley?

Fontan: Well, [in] Berkeley … 2 percent of your profits must go toward the community. … Berkeley was proactive early. Whereas, the state of California does not have that currently.

In Emeryville, with our new permit, there is an actual program there for a certain foundation of the arts [and] … a certain amount of volunteer time is expected of [us]. … I think that other communities are going to see what Emeryville is doing and the benefits to its community. I could see other municipalities definitely mimicking that.

Brooks: We try to impact on a local level exactly where our stores are operating currently and finding ways to intertwine and get involved in those communities.

Hopefully, California will do the same thing. It's nice if it grows organically from the industry itself rather than having a state or municipality requiring it. I think as we give back more and more, these communities will be more accepting and more willing to listen to the cannabis community.

We've found the more we get involved with the community, the more they understand what we're doing, and the less they're scared of the industry. It opens up the dialogue with these communities. It's just been amazing for us. We absolutely really enjoy doing it, and we want to do it.

Fontan: Giving back feels good. It absolutely feels good when you can affect change. But people need to realize [that] you need to budget for monthly giving and also quarterly giving so that you can realize what donations and organizations mean the most to you. There's immediate places that you can look around your community that need money right now. It's up to you to engage them and find ways to communicate to them your willingness to help.

Editor’s note: This interview has been edited for length, style and clarity.