Legal cannabis continues to be a buzzworthy topic in 2019, as more states and cities across the U.S. have legalized or decriminalized cannabis. As the call mounts for more legalization, there have also been distinct and thorough calls for equity programs to be established to include people of color in the cannabis boom. These generally go beyond just striking cannabis convictions from people’s records (although that’s an important first step) and actively push for people of color to profit off of cannabis.
However, there’s a swirling cloud of doubt that is surrounding these efforts, fueled by controversy and, in some cases, even a hint of improper practices.
California has been the leader with these initiatives – to date, Los Angeles, Oakland, San Francisco, and Sacramento have set up their own programs. Governor Jerry Brown signed the California Cannabis Equity Act into law late last year. This bill helps their Bureau of Cannabis Control direct funds to local businesses looking to go into the legal weed retail industry, specifically in communities targeted by the war on drugs from the 1980’s and 1990’s. State senator Steven Bradford said of the bill he authored, “Although California isn’t the first state to legalize the adult use and sale of cannabis, we can be the first state to do it right – by including those who were once punished but can now contribute.”
Which is all well and good, if it works. Los Angeles’ Department of Cannabis Regulation rolled out a process for applicants last year, but the program now suffers from a lack of funding. Legislators have put $10 million dollars that was set aside for equity programs on hold, crippling programs like the one in LA.
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In addition, L.A. has also canceled the application process without setting forth a new timeline, which has infuriated applicants who were vexed by the slow process to begin with. To add to the swirling anger, the city’s Budget & Finance Committee made a recommendation that $5 million from the equity funding go to the Los Angeles Police Department instead, to cover their overtime. That didn’t go over so well.
Those in Oakland know this pain all too well – their social equity program launched in 2016, with the expressed intent of half of the available permits for retail going to equity applicants. This was defined as any Oakland resident who earned less than 80 percent of the city’s average, as well as those who either lived in one of the city’s high crime areas or had been convicted of a cannabis-related offense in the city after November of 1996. There was also a provision for general applicants to partner with equity applicants as incubators, providing free space for a period of three years. When first reported, this program was seen as a possible beacon of hope for other programs. But almost three years later, the program might collapse due to lack of municipal support to those equity applicants, and issues with their incubator spaces and the entities behind them.
Another issue in California that makes it more difficult equity programs to engage people in the legal cannabis industry is the fact that unlicensed cannabis dispensaries and delivery services are still being listed with Weedmaps, a website directory for these businesses, without the state regulatory board cracking down. This encourages people to remain in the black market, as they’re able to sell more product with less regulatory hassle and zero tax. And anyone who does go legal is forced to go up against completely unregulated competition.
There is supposed to be more pressure put on the company to cease and desist as of January of this year but since the problem first came to light, initial reporting on this situation took place, there were still a third of the illegal operations running. And there are now signs that companies are taking advantage of a loophole caused by Proposition M, which governs existing medical marijuana dispensaries. It allows companies to take over existing medical marijuana licenses, enabling them to fund an equity applicant’s application, and then assume control after it went through.
This is similar to what’s going on in Maryland, which saw larger companies swoop in to seize control of local dispensaries. This compounds a growing dissatisfaction with how the state has handled things after initially calling for more racial diversity in the budding industry. The state set up a license application process for growers that demanded equity, but ultimately not one of the 15 license approved was held by a Black-owned company.
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These situations are making other states who want to legalize cannabis take a more serious look at how equity programs can be effective. Massachusetts, which legalized cannabis for sale last November, has stood out for being more detailed in their approach. Part of this is seen in the selection of their cannabis commissioners, one of them notably being Shaleen Title, a lawyer who was a co-founding board member of the Minority Cannabis Business Association. She also co-authored the state’s legalization referendum, making her an expert on both legalization and equity. Title has worked to increase public awareness of the state’s equity program, by inviting cannabis professionals in the state to network and get more involved in the program. Massachusetts’ Cannabis Commission has also provided online resources for those affected by previous cannabis-related offenses to seek help in clearing their records.
New York and New Jersey were two states where many thought that cannabis legalization would happen, but concerns about equity actually held it up in both cases. Both measures were shelved as state lawmakers felt there needed to be more focused and detailed criminal justice initiatives to go with proposed business equality measures. As early adopters like Colorado and Missouri have seen equity measures defeated in their state governments, groups like the MCBA are stepping in to make sense of it all. They’ve begun conducting post mortems on failed equity programs, with the goal of getting them done right and getting lawmakers back on board with the effort. A case study in Los Angeles will be their first, with Denver slated to be next. Hopefully those studies can help, before it’s too late.