Creating Inclusive Policy

Have we lost focus on why social equity programs were established?

By Gia Morón

Since the emergence of the legal cannabis industry, community leaders from marginalized communities have called out the imbalance and lack of representation of ownership. These advocates created a new awareness that, in addition to safe and legal access, a focus needed to be placed on social equity, justice, and reinvestment as an integral part of any new legislation. But it has been an uphill battle.

As more states legalize medical and adult-use cannabis, Black and Latinx cannabis activists continue to highlight unfair processes and selections of licensees. Diverse application teams and advocates remain committed in lobbying for change in these patterns of injustice. It is a cycle seen too many times state over state, and industry leaders are raising their voices louder to demand fair and equitable opportunities pushing for new or amended legislation. Issues often lie in how policy is written, what’s included, and what’s left out of legislation.

As we see today, states are beginning to respond to advocate demands for social equity and justice. In my home state of New York, for example, several organizations, including Women Grow, came together to push for change. After several years of lobbying, the Marijuana Regulation Taxation Act (MRTA) passed.

This piece of legislation was critical for impacted communities across the state. The bill offered social equity applicants options at various entry points in the soon-to-be-legal New York adult-use market. Like many states, New York’s current entry price is astronomical for the average person. So, where would that leave a start-up business owner, who has no access to the kind of capital and other resources needed to ensure success in this emerging market?

New York currently has ten medical license holders. Only one company is women owned and led. All of the current license holders will have access to the New York adult-use market when it officially launches in the near future. To date, among license awardees in New York, there is not a single person of color. Yet the state remains one of the most diverse in the country with over 300 languages spoken.

It was the advocates who worked tirelessly with NY legislators Majority Leader Crystal Peoples-Stokes and Senator Liz Krueger — who sponsored the MRTA bill. In March of 2021, the MRTA passed in New York, making history. Social Equity was a big part of this bill, with 50% of the adult-use licenses earmarked for social equity applicants. While traditional vertical licenses will not be awarded, the structure was broken down to create affordable options for smaller operators. This bill also includes micro licenses and cooperative options. Other states saw this as a breakthrough in the framework of how social equity can work for the people most impacted. New York is still awaiting regulations for operators but this bill serves as a first step in a better direction for applicants.

Why is this important?

When the industry discusses the so-called war on drugs, it is actually referring to a war on people — predominantly Black and Latinx from low-income communities. Through advocacy, cannabis social equity was developed to ensure that people and communities most harmed have an opportunity to participate in the expanding number of states we see entering into this market. According to an article in Cannabis Industry Journal, “Where Are We Now? Social Equity in the US Cannabis Industry,” of the 19 states with adult-use cannabis, 13 have social equity programs created to help marginalized people enter and lead in the industry.

In its 2021 Jobs Report, Leafly touches on Black ownership in the industry, citing racial

Photo: iStockphoto.com/kate_sept2004

DRUG ENFORCEMENT AND POLICY CENTER Fair and Square: How to Effectively Incorporate Social Equity Into Cannabis Laws and Regulations

Author: Shaleen Title

Table of Contents About the Author .....................................................................................................................................................1 Executive Summary ................................................................................................................................................2 Who is your social equity program for? ...............................................................................................................2 What benefits do eligible participants receive? ...................................................................................................2 Principles for creating an effective licensing program .........................................................................................3 Introduction: How We Got Here ..............................................................................................................................3 Grounding Principles for Launching an Equity Program .........................................................................................4 Creating a Comprehensive Social Equity Framework for the Cannabis Industry ...................................................5 Who is your social equity program for? ...............................................................................................................5 What benefits do eligible participants receive? ...................................................................................................6 Principles for creating an effective licensing program .........................................................................................8 Closing Thoughts ................................................................................................................................................. 11

ABOUT THE AUTHOR Shaleen Title is an Indian-American attorney and longtime drug policy activist who currently serves as Distinguished Cannabis Policy Practitioner in Residence at the Drug Enforcement and Policy Center. Title is co-founder of Parabola Center and vicechair of the Cannabis Regulators of Color Coalition, and in 2021 was named to Boston's 40 Under 40 List. She was appointed by the Massachusetts governor, attorney general, and treasurer to serve as one of five inaugural commissioners of the Cannabis Control Commission from 2017 to 2020. During her time as a regulator, she was widely recognized for her focus on racial justice and her efforts to make the cannabis industry more fair and inclusive. Before her term as commissioner, she worked on multiple state marijuana legalization campaigns, and as a founding board member of the Minority Cannabis Business Association she led the drafting of the first model bill created to give states guidance to implement a process of reinvestment and reconciliation. She is an advisor to Supernova Women, a nonprofit organization providing a space for women of color in cannabis, and the THC Staffing Group Mentorship Program. Shaleen is a frequent lecturer on cannabis policy and has testified in front of governmental bodies around the world about restorative justice in marijuana laws. She has been interviewed by numerous media outlets and she routinely partners with leading drug policy organizations to support drug policy reform. Shaleen holds a business degree, law degree, and graduate degree in accounting.

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Electronic copy available at: https://ssrn.com/abstract=3978766

Shaleen Title

disparity as the major challenge. Today, there is about 2% Black ownership of plant touching (cultivation and dispensaries) businesses in the U.S., and of that, less than half of the owners are full vertical businesses with a fraction of that percentage operating in multiple states. While Latinx ownership may be slightly higher, the percentage has yet to reach double digits. For further clarity, there are over 35,000 cannabis businesses operating in the U.S., with a combined ownership of Black and Latinx businesses they still do not make up 10% of the national market share.

Listen to the people doing the work.

As we look at the industry today versus 3-5 years ago, social equity has made progress, but the criteria for equity seems to be changing. Why? Recently, former Massachusetts cannabis regulator Shaleen Title authored a report that was released by Ohio State University — Moritz College of Law: Fair and Square: How to Effectively Incorporate Social Equity Into Cannabis Laws and Regulations. It is an outlined framework for regulators. Big cannabis businesses could also benefit from the report and use it as a guide when considering how to best support social equity programs.

Replicating failing programs will not correct our growing social equity gap. The people who are in communities working with the people and relaying messages to legislators can offer the best insight to addressing what is beginning to sound like a diluted definition of social equity. These programs were put in place as a response to the impact of the war on drugs on specific communities.

The first three points of Title’s report speak to the demands of impacted communities: governments need to acknowledge they created the problem and be responsible for repairing; social equity is everyone’s responsibility to repair; and the most important point she makes is, “speak to the communities directly impacted.” How can we effectively improve programs if we are not connecting with the impacted community? It’s the most important voice missing from the table. Translation is lost if all parties are not heard.

Stay focused. Include instead of exclude.

Policymakers and businesses cannot lose sight of why social equity programs were created. They are necessary and a must for people who feel voiceless in a rapidly growing industry that has historically excluded and persecuted them. There are lives and livelihoods at stake. Impacted communities must be given the opportunity to build businesses and create generational wealth in an industry that criminalized neighborhoods, for a product once deemed illegal, and today is seen as one of the fastest growing and most profitable markets.

Collectively we have an opportunity to build a stronger foundation by uplifting the people who have been pushed aside. These programs have yet to be perfected, but there is still time to keep working on improving. We must be the architects of this blueprint. We must include the people most harmed. ❖

Photo: iStockphoto.com/SolStock

FROM DUST TO

A Cannabis Tech Zone in the Heart of the Desert

Section compiled by Ebby Stone

DANK

What comes to mind when you think of Arizona? Do you envision the sprawling Grand Canyon in all its majesty? Maybe you think of turquoise gemstones or saguaro cacti. Beyond Arizona’s Hoover Dam and 113,000 square miles of unique geology is a thriving tech center that is embracing cannabis faster than any other state in the nation.

Since legalizing adult-use cannabis sales in January 2021, Arizona has already earned nearly $1 billion in cannabis revenue. Jobs are opening up rapidly to meet demand. Employment company Vangst reported the Grand Canyon state will create 25,000 cannabis jobs over the next five years. Since 2017, positions in the cannabis sector have increased from 120,000 to over 320,000 in the first quarter of 2021.

What’s so alluring about this southwestern state? Companies might be drawn to its low corporate tax structure (just 4.9%), or its robust workforce of more than 3 million people with a median age of 37. Arizona also has some of the lowest labor costs in the country, according to the Arizona Department of Agriculture. The state boasts 80+ airports and more than 66,000 miles of highway — a great pairing for importing and exporting goods.

While Arizona may seem too dry for agriculture (it’s home to four deserts), it has plenty of rivers and streams to support farming. Its warm climate allows for year round production of many crops. The Arizona agricultural sector exports vegetables, nuts, fruits, wheat, cotton, eggs, beef, and milk to more than 70 countries across the globe.

Since legalizing medical marijuana in 2010, the state has been evolving its understanding of the plant and in many ways preparing for its recent legalization of adult-use sales. Now that the market is open, there’s no end in sight for this robust cannabis marketplace. This section will explore some of the people and companies making the Grand Canyon State a thriving cannabis tech zone. ❖