Social equity in the marijuana industry remains elusive
Efforts to help blacks and browns succeed as cannabis entrepreneurs are not working, despite efforts in states where weed is legal to encourage diversity in ownership and management.
Why is this important: People of color have been disproportionately targeted in the “war on drugs”, so as the pot industry grows, cities and states have tried to make social justice a priority in the granting of licenses.
- But people from under-represented groups often do not have access to the capital they need to tackle “big marijuana”.
- They also lack the family and friendships that give others a boost.
Driving the news: In July, three Democratic Senators (Cory Booker, Chuck Schumer and Ron Wyden) released debating bill to remove cannabis from the federal list of controlled substances – a move to “end decades of human injury. communities of color ”.
Comments have poured in on the Cannabis Administration and Opportunity Act, which:
- Automatically eliminate federal non-violent marijuana crimes.
- Enable medical research on cannabis.
- Give legitimate cannabis companies access to banking services.
- Stop people from being denied public housing or federal student loans for using cannabis in states where it’s legal.
- Create a “trust fund” from federal cannabis tax revenues “to reinvest in communities hardest hit by the failed war on drugs, as well as to help level the playing field for them. entrepreneurs of color who continue to face barriers to entering the industry. “
The big picture: Some states that have legalized cannabis have reserved licenses for under-represented operators, but that hasn’t moved the needle.
- “Ownership and representation of senior executives – they’re still mostly white males,” Morgan Fox, spokesperson for the National Cannabis Industry Association, a trade group told Axios. “It’s a trend in the right direction, but there is still a long way to go.”
- “Most social equity programs have failed – even programs that were designed to cede a multitude of minority owners, ”says Amber Littlejohn, executive director of the Minority Cannabis Business Association.
- Too many winners of social equity licensing lotteries “have sold their licenses or, in truth, are supported and managed by companies that are not owned by minorities,” Littlejohn told Axios.
- Dedicated programs are “bright and pretty and everyone feels good about themselves, but they often don’t kick in until tax revenue funding arrives” from cannabis sales.
In numbers : A 2017 survey by Marijuana Business Daily found that less than 10% of marijuana business owners are black or Latino, a percentage that drops when you count only ‘plant touching’ businesses like dispensaries and farms. .
- Littlejohn, whose organization submitted 30 pages of comments on the Booker-Schumer-Wyden draft, said she suspected the numbers were in fact missing. down since.
- Too many social equity lottery winners “have sold their licenses, or, in truth, are supported and managed by companies that are not owned by minorities,” Littlejohn says.
Nationwide black consumers are 3.6 times more likely that white users to be arrested on cannabis charges, despite roughly equal rates of use, according to New Frontier Data, a cannabis consultancy.
- An estimated 40,000 people are incarcerated for cannabis-related offenses, according to a New Frontier Data report.
- “At the end of the day, what is really needed is more education at the police force level” to close the application gap, Giadha A. DeCarcer, Founder and CEO of New Frontier told Axios. Data.
What they say : Nicholas Vita, CEO of Columbia Care, one of the world’s largest multi-state cannabis operators, says federal legalization is inevitable but not imminent – and BIPOC operators must be a critical part of industry expansion .
- Vita – a white Columbia University graduate whose company is public – says so many Fortune 500 companies are sniffing the cannabis market that it will be an ongoing challenge for under-represented operators to compete.
- “How do you create a national legal entity, where you have a lot of minority entrepreneurs entering an industry with a lot of historic associations, and not deprive them of the right to vote before they have a chance to get out of the starting gates? ” he asks.
Reality check: Any federal law will be a tough sell.
- On the right, there are objections to the legalization of marijuana, amnesty programs and the erasure of offender records.
- On the left, there are complaints that the bill does not go far enough in correcting racial inequalities or compensating targeted communities.