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What’s the problem with cannabis equity programs?

Why aren’t they working, why aren’t they enough, and how do we change course while the cement is still wet on legalization?
Written by
Dr. Amanda Reiman
May 26, 2024

When pondering the potential benefits of legalized cannabis, it is important to also recognize the harms of prohibition. The criminalization of cannabis and those involved caused immense harm to individuals, families and entire communities. Criminal justice involvement for cannabis goes beyond incarceration. Unlike other crimes, drug crimes carry with them a lifetime of collateral sanctions including denial of student aid, employment, public housing, voting rights, child custody and the inability to obtain professional licensure or participate in adoption. To put it simply, being arrested and convicted of a cannabis crime can rob a person of the experiences and services that contribute to a successful, happy, stable life. And it’s not just the individual who suffers. Children growing up without their parents, communities without a workforce and consistent unemployment drive poverty, mental health issues and lack of social cohesion. I have written before about how all of that was the point of the drug war, and, from the perspective of its architects, it has been wildly successful. When we started talking about moving cannabis out of criminalization and into legalization, a common question was, what about the people who have suffered at the hands of prohibition? How can we use the new system to make up for the harms inflicted on so many? And although I do believe that most cannabis equity programs have good intentions, they have been largely unsuccessful at both repairing the damage done by prohibition and bringing those harmed by it into the legal cannabis industry.

So let’s take a look at equity programs. Why aren’t they working, why aren’t they enough, and how do we change course while the cement is still wet on legalization?

What is harm and who has experienced it?

One of the first barriers to implementing a social equity program is figuring out who is eligible. This process can be hampered by state law. For example, I was on the Cannabis Regulatory Commission for the City of Oakland when we looked to establish one of the first equity programs prior to the passage of Prop. 64 in California. For those who don’t know, California has outlawed affirmative action. Meaning that no special privileges can be bestowed on a person because of their race, gender or sexual orientation. We know that people of color were significantly more likely to be impacted by cannabis prohibition due to racist policing practices. But, we could not include race in our eligibility requirements. So, we instead looked at areas of the city that were most policed during prohibition and made living in one of these areas a requirement to be in the equity program. We also included people who had been arrested for cannabis in Oakland. Other cities and states have taken similar approaches, but no approach will capture the population perfectly. There will always be people who should qualify but don’t, and people who should not but happen to. Cannabis prohibition has negatively impacted so many lives, devising a clean and clear way to identify them is a gigantic task.

Repairing harms vs. giving opportunities

Most social equity programs have the focus of giving those impacted by cannabis prohibition the first opportunities to enter the legal industry. Sometimes there are support services connected to this (more on that in a bit), but more often it consists of licensing priority. In a competitive market, being first in line for a license can be helpful, especially if there are caps on the number of licenses available. However, it also begs the question, what if I, my family and my community have been harmed by prohibition…but I don’t want to start a cannabis company? It seems like we have decided that repairing drug war harms = opening a cannabis business. This is not true. There are many people who have been harmed by prohibition who want nothing to do with the cannabis industry. Why should opportunities to benefit from legalization be tied up in opening a business? There are some examples of cannabis tax revenue going to directly fund programs for communities that were hardest hit by prohibition. The Community Reinvestment Fund in CA is a good example. The grant was $48M last year and went to fund local health departments and qualified community-based nonprofit organizations in communities that were most affected by the war on drugs. The grants fund services like job placement, mental health treatment, substance use disorder treatment, system navigation services, legal services to address barriers to reentry, and linkages to medical care. And in 2019, the city of Evanston, IL began using cannabis tax revenue to support a reparations fund to provide cash grants directly to those who have been impacted by prohibition. But, most equity programs still require people to open cannabis businesses in order to benefit from them.

Performative equity

Tied to needing to open a cannabis business to benefit from social equity programs, many programs stop their support after a license has been issued. Anyone in the cannabis industry can tell you that running a successful cannabis business is tough and expensive. It may be a feel-good gesture to give licenses to those who have been impacted by prohibition. But are these businesses open a year later? Five years later? Or do people sink their life savings into them only to lose the business? The value of having a cannabis license plus the capital required to successfully operate a cannabis business can result in predatory partnership offers. Equity program participants may be approached by wannabe business partners who offer a great deal of capital for part of the business only to usurp that business if it does not become profitable. Some states are offering financial and technical support to equity businesses after they are open. Vermont has both an accelerator and access to grant money and technical assistance through their Cannabis Business Development Fund. Washington has developed a video series covering finance, marketing, taxes and business development available only to equity applicants and businesses. Colorado, Connecticut, and Massachusetts all have opportunities for equity businesses to pair up with licensed entities or vendors approved by the state for technical training and assistance. Equity support should not stop with licensure and should be an opportunity for the owner to gain skills and knowledge about running a business.

The harms of prohibition are intense and multi-generational. Equity programs, in some ways, seem like white people allaying their guilt for not being as impacted as their brothers and sisters of color. But there is no room for guilt and symbolic attempts to address the issue. People’s lives were ruined by the criminalization of cannabis and further, the laws were set up to do just that. So, where do we go from here? My suggestions:

  1. Cast a wide net. Cannabis prohibition impacts not just the arrestee, but everyone in their life. Some equity programs do include family members, but more must be done to accurately and generously include the branches and leaves of the impact universe, not just the trunk.
  2. Community investment, not just business licensing. Opening a cannabis business should not be the only way someone can benefit from cannabis legalization. Cannabis tax revenue should be funneled into communities that have been most impacted, whether through grants for services or direct cash reparations.
  3. Support that is long lasting and more than skin deep. Running a successful business in any industry is tough. In cannabis, it can feel nearly impossible. Licensing priority is a great place to start, but it is just a start. Ongoing technical and financial support is necessary to ensure that equity businesses don’t just hang their sign, but grow and thrive.

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