Lawmakers in Oakland, California have passed a series of cannabis industry regulations aimed at incorporating the city’s African American residents. The new rules will only allow Oakland residents to operate cannabis businesses in the city, and offers a number of support tools and preferences for residents of neighborhoods where people have been disproportionately persecuted in the past.

According to SFGate, the residency clause was a late addition during Tuesday’s City Council meeting, as well as the most controversial new ordinance. For established cannabis businesses with owners who live outside the city, the new rule will force them to find new locations in neighboring cities. For Dan Grace who runs Dark Heart Nursery, a multi-million dollar grow site in Oakland, and lives in nearby San Leandro, the residency rule is crushing.

“We’re sitting here with millions of dollars of investments, millions paid in taxes to the city and 60 local employees. And we’re going to have to shutter our doors,” Grace, who employs 60 Oakland residents, said.

But for Oakland residents who support the legislation, the regulations are only a small step at getting the city’s black population rooted in the industry that is set to grow exponentially in the coming years. Carroll Fife, a local organizer who pushed for the equity laws, has been fighting for years to get better representation for African Americans in the cannabis industry.

“Black folks built this city and we demand ownership in the industry,” Fife said. “We’re watching the end of an empire… And the part that we need to do to make sure that happens is have that economic base. We do that as owners, not as workers.”

The new rules set up two separate city permit application periods. In the first application period, half of the available permits will be awarded to Oakland residents who have spent at least 10 of the last 20 years living in one of several police districts where cannabis crimes were disproportionately enforced. The equity permits must also be given to residents who make at or below 80% of the city’s median household income. People who have been arrested for marijuana related crimes after November 5th, 1996 would also be considered as equity applicants.

The other half of the first period permits will be given to “incubator” businesses that are providing free rent or real estate to an equity applicant.

The second application period will have no equity regulations, but will still only award permits to residents of the city of Oakland.

In 2015, black residents made up 77% of Oakland’s marijuana arrests, despite making up less than a third of the population. Meanwhile, white people also make up 31% of Oakland’s population, but represented only 4% of the city’s marijuana arrests despite similar cannabis consumption rates. The residency and equity laws were put in place to help curb this long-standing racism.

“We have great disparities between more well off and less well off operators — those that, especially in the cannabis industry, can’t get a traditional loan from a bank, can’t get traditional business advice, (compared to) those that have mom and dad offering a loan to help start your business (who) haven’t been arrested and convicted of a cannabis offense,” Greg Minor, assistant city administrator, who worked on the report told SFGate.

“If we were to just open permitting today, we would just be maintaining those disparities into the future, if not exacerbating them.