California Pot Mogul Denies Bill Was Written As A Favor To Him

Steve DeAngelo is one of the most powerful cannabis businessmen on the planet, but he has a drug felony on his record. A bill in the California legislature would deal with that issue—for him and very few others.

A bill in the California State Assembly that would supposedly make it easier for drug felons to obtain marijuana licenses is so narrow in scope that it appears to have been written for one powerful white California entrepreneur: Steve DeAngelo, who is likely the most powerful legal marijuana business owner on the planet.

If the bill is passed, DeAngelo will glide through the marijuana licensing process, while most other cannabis felons, including many of the people of color who were disproportionately targeted by the war on drugs, will need to individually convince a licensing board that they have been rehabilitated. A source close to the Assemblymember who wrote the bill told BuzzFeed News that it had specifically been introduced as a favor to DeAngelo.

“It’s like a running joke in the industry at this point. Steve got a bill written for himself,” said Casey O’Neill, who cultivates cannabis, flowers, and produce at HappyDay Farms in Northern California. O’Neill has a felony conviction for cannabis cultivation on his record, but it would not be covered under this bill.

Having co-founded three of the cannabis industry’s most important and influential companies, the outspoken and ambitious DeAngelo is quickly shaping up to be the Elon Musk of pot. Not only does he run Harborside Health Center, the largest marijuana dispensary in the country, but he also helped start the most respected and reliable chain of marijuana testing labs, Steep Hill Labs, and the industry’s biggest and most influential investor network, The ArcView Group.

But before he became a fixture on the conference circuit in his signature homburg hat and long pigtail braids, the 57-year-old DeAngelo — like many people in the cannabis industry — worked with drugs on the black market. As a result, he has a felony conviction on his record stemming from an arrest for the distribution and possession of cocaine and marijuana in Maryland in 2001. DeAngelo was ultimately only convicted of possession with intent to distribute marijuana and given a five year suspended sentence and three years of probation. That conviction later prevented his brother and business partner from acquiring a medical marijuana license in Massachusetts.

California's medical marijuana regulations, passed last fall, include a provision that anyone with a drug felony conviction on their record will need to prove they have been rehabilitated before acquiring a cannabis business license when they become available in 2018.

On February 19, Assemblymember Rob Bonta (D-Oakland) introduced a bill that would prohibit the state from denying a license to drug felons who meet three very specific criteria: First, the conviction must have occurred out of state. Second, the conviction must not have resulted in jail time. And third, the felon must also be approved by a local licensing body. DeAngelo, who already has licenses to operate in Oakland, San Jose, and San Leandro, perfectly meets all three qualifications.

“This would unfairly impact people in similar circumstances with convictions in the state of California,” said Diane Goldstein, a retired police officer and activist with the group Law Enforcement Against Prohibition. “We should support any bill that lessens the barriers to entry in the industry and we should not hold people’s past criminal convictions against them for things that now we as a society accept. But our first priority should be for encouraging businesses from residents of California.”

Records show that DeAngelo’s dispensary spent $10,000 between October and December lobbying the legislature and the governor’s office on the state’s new medical marijuana regulations. However, DeAngelo denies that he asked Bonta’s office to introduce this bill.

“I don’t want a Steve DeAngelo clause,” DeAngelo told BuzzFeed News. “They may have thought by crafting something like this that it would win my support, but we are not backing this approach.”

Bonta’s legislative aide Max Mikalonis dismissed the bill’s importance, saying in an email that it "is not moving forward in the legislative process. It will be held in the Business and Professions committee without being taken up for a vote.” Mikalonis did not respond to a request for comment on the impetus for writing the bill in the first place or to questions about whether it had been written at the behest of DeAngelo.

As BuzzFeed News recently reported, marijuana and other drug-related felony convictions have been preventing thousands of qualified people from getting involved in the burgeoning legal cannabis industry. Laws excluding drug felons disproportionately affect people of color, who are significantly more likely to get arrested for narcotics crimes, even though people of all races use and sell drugs at the same rates.

Law enforcement and legislators in every state with legal marijuana have decided to prevent most drug felons from participating in order to keep the industry ostensibly free of criminals. However, white people with experience on the black market who do not have drug felony convictions are often sought after by investors and state licensing boards for their cannabis expertise.

DeAngelo is very conscious of these racial dynamics and often discusses them in public.

“Of course Steve DeAngelo is going to get a license. Steve DeAngelo is white,” DeAngelo told BuzzFeed News. "He is articulate, and he’s able to present his case. What I’m concerned about is all the black and brown people who have been arrested at wildly disproportionate rates."

A handful of people in the marijuana industry expressed skepticism about DeAngelo’s commitment to civil rights over his own bottom line, and not only because of this one bill. Although he often claims to advocate for open markets, DeAngelo has lobbied to limit the number of store-front dispensaries in Oakland, where his own flagship store is located. And while he has recently criticized the mandatory distribution layer of California’s new medical marijuana regulations, claiming to speak on behalf of small farmers, others argue that having a separate entity move cannabis from farm to dispensary is necessary to protect farmers from federal raids and prosecution by proving they aren't diverting cannabis to illegal markets.

"Certain people put a lot of money and invest a lot of money in shaping the perception of who they are in the public,” said Sean Kiernan, a veteran who uses medical cannabis for his PTSD and helps provide marijuana for other vets through the Weed for Warriors Project. “The fact that he gets special treatment, or someone gets special treatment, just raises red flags to me.”

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