/Don’t Forget About Social Equity in Cannabis

Don’t Forget About Social Equity in Cannabis

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One of the best things about the legalization of cannabis has been the accompanying assurance that a portion of cannabis tax and licensing revenue would be allocated for equity programs. These programs are designed to address discrimination against people of color (POC)—from the racist policies that placed the heaviest burden of the War on Drugs upon communities of color to the lack of resources available for these same groups to enter a now-regulated cannabis industry.

Those inequalities are not a matter of opinion or white liberal guilt. It’s a fact that, historically, the disproportionate enforcement of cannabis laws fell most severely upon POC. And POC now have less access to the capital needed to establish themselves in a flourishing industry—an industry that had more than $12 billion in global sales in 2018, is expected to hit nearly $17 billion this year, and could top $31 billion by 2022.

But as it turns out, some of these equity programs are not exactly spending the money as it was intended. The Mercury recently reported on the distribution of cannabis taxes in Portland (spoiler: Law enforcement took the majority of the money). And Portland isn’t alone in this failure.

The Massachusetts Senate recently rejected a proposal by Senator Sonia Chang-Díaz that would have provided zero-interest cannabis-related business loans to “benefit small businesses, diverse owners, and disenfranchised communities,” according to the Boston Globe. The program would have cost a remarkably reasonable $1 million from a state budget totaling $43 billion and would have become self-sustaining through a portion of the projected cannabis tax revenue and other sources. Senator Chang-Díaz pointed out that, of the 19 dispensary licenses issued, none had gone to any of the state’s numerous programs designed to support disenfranchised groups.

Los Angeles has an annual budget of more than $10 billion and set aside a mere $3 million to fund its new social equity program for the cannabis industry. Per Cannabis Wire, that’s far short of what is needed to provide the technical support needed for what is expected to be some 1,000 industry applicants from minority communities.

Cat Packer, director of the Department of Cannabis Regulation, asked LA City Council for an additional $2.25 million to fully fund the citywide social equity program. But LA wanted more money for police and law enforcement. In an effort to support and raise the tax revenue from cannabis sales, the mayor’s budget requested an additional $10 million for police enforcement against unlicensed cannabis businesses. Capturing lost revenue from illegal sales could dramatically increase LA’s current projections of $40 million from cannabis tax revenue and fees. Still—$10 million for weed cops? Like me, that seems high.

Some cities and states are getting it right, though, directing their cannabis revenue toward programs that serve marginalized communities. Colorado has an impressive track record of using canna revenue to fund education and programs to address homelessness. Last month, the commission of Clark County, Nevada (home to Las Vegas), unanimously allocated a total of $1.8 million in cannabis tax and fees for programs to end youth homelessness and to house those with serious medical conditions.

The cannabis industry has a well-known diversity problem. One study estimated that only 17 percent of executive positions in the cannabis industry were held by minorities. And a 2016 BuzzFeed News story estimated that the number of cannabis dispensaries owned by African Americans was all of one percent.

The consolidation and homogenization of Oregon’s cannabis industry is upon us, making it all the more important we remain vigilant in changing these numbers. While the inevitable “rich white guys get richer” model will no doubt continue to flourish, we have a moral obligation to offset it with adequate funding for programs to help level a vastly uneven playing field. Whether it’s through the expunging of cannabis arrest records, through small business incubators, or the implementation of no-interest loans and grants, social equity in cannabis needs to be undertaken now, ensuring everyone has the opportunity to participate.

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