Social Equity Advocates Push to Diversify the Cannabis Industry
Before the coronavirus pandemic disrupted nearly every aspect of our everyday lives, the Philadelphia Association of Black Journalists (PABJ) was gearing up to host cannabis industry stakeholders, policymakers and media for two days of discussion on the state of the marijuana market throughout the Mid-Atlantic.
It was the second such event the PABJ had organized. Last April, the group hosted a public conference that brought reporters together with prospective business owners and mostly non-Caucasian speakers for a first-of-its-kind meetup aimed at elevating “the region's understanding of cannabis, its connection to the media and the criminal justice system and current legalization efforts happening across our state.”
Last year’s conference had a secondary purpose: to give the media a better understanding of how to cover legalization and its aftermath; encourage journalists to diversify their sources; and teach newsrooms to examine their own coverage for bias and naivety around the role the press has played in spreading reefer madness.
“Media played a pivotal role in the criminalization of cannabis,” event organizer and newspaper reporter Tauhid Chappell told THCnet. “It was never the danger the media said it was.”
These days, the recreational use of cannabis is more widely accepted. Multiple polls conducted throughout 2019 found that two-thirds of Americans are in favor of federal legalization. Meanwhile, the existing legal American cannabis market supports more than 243,000 full-time-equivalent positions, a figure that is expected to grow to 414,000 by 2021.
According to cannabis recruiting agency Vangst, cultivation, extraction and manufacturing experts will make upwards of $167,000 annually while trimmers and packagers make around $15 per hour.
Rightfully, people of color -- who for years were unfairly targeted by the failed “War on Drugs” -- want to be included, and not at the bottom.
As Edmund DeVeaux, executive vice president of New Jersey’s Burton Trent Public Affairs firm, explains, 20th century drug-crime penalties went from “criminalized to weaponized.”
“Marijuana was put in the same category as heroin. It was a way of suppressing voices,” he said. “Marijuana was the drug of negros and jazz musicians. In the late 60s and early 70s (the users) were black people and hippies who were the most vocal opponents of Vietnam.”
And the problem isn’t relegated to the past. According to drugpolicy.org, just under half of people arrested for breaking drug laws are Black or Latino, despite those groups comprising less than one-third of the American population.
The ACLU lays the problem even more bare. It finds that in the U.S., a black person is 3.7X more likely to be arrested for marijuana possession than a white person, even though both races consume at similar rates.
The war on marijuana, it says, “had a staggeringly disproportionate impact on African Americans, and comes at a tremendous human and financial cost. The price paid … can be significant and linger for years, if not a lifetime.”
How? For starters, convictions for possession can permanently reduce positive outcomes for public housing, student financial aid, employment, child custody and immigration status.
As cities and states increasingly decriminalize and legalize cannabis, public policy is trending toward expungement. It’s a start, and it’s one that’s happening at various speeds across the country.
The National Conference of State Legislatures reports that at least 15 states passed some form of expungement law between 2014 and 2019.
But justice doesn’t just mean pardoning those with low-level marijuana convictions. It means actively offering public and private programs to ensure minorities get more than an equal shot.
These programs are generally referred to as “social equity programs” and the people targeted for inclusion are usually called “social equity applicants.”
One state where industry stakeholders are pushing licensors to prioritize social equity applicants is Massachusetts. According to the state’s Cannabis Control Commission, white Americans made up 81% of national cannabis business owners and founders in 2017, compared to African Americans at 4.3% and Hispanics at 5.7%. The remaining 9% were Asian and “other.”
But as the pace of industry growth speeds up, those working on cannabis equity know they don’t have time to waste, especially as major alcohol companies like Anheuser-Busch InBev (Tilray), Constellation Brands (Canopy Growth) and Molson Coors (HEXO) sharpen their focus on the sector.
These types of companies have the resources and connections to significantly influence how the industry takes shape. They can hire lobbyists, cozy up to politicos and position themselves to more effectively navigate the arduous and expensive process of applying for a canna-business license.
“Minorities don’t win,” said Bershan Shaw, an African-American entrepreneur and business coach. “The licenses go to the wealthy and the big boys -- companies that have won multi-state licenses.”
Shaw -- who oversees a 17-person investment team of women and people of color -- is applying for a cultivation license in New Jersey, which has a legal medical marijuana industry, an upcoming referendum to vote on adult-use, and no social equity program.
“In New Jersey, you have to already have a lease to apply for a license,” she said. “You have to pay an engineer, application writer, architect for the drawings, lawyer, a lobbyist. That’s already $200,000-$300,000 right there.”
One can shrug and call it the natural consequence of capitalism or one can take a more realistic, holistic view of American society and offer the needed assistance.
The Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, which was written to address some of this inequity, passed the House Judiciary Committee last year. The bill would exact a 5% retail sales tax on pot products and dedicate that revenue to boosting cannabis opportunities for disadvantaged individuals by funding job training and small-business loans and eradicating some of these communities’ barriers to licensure.
Vermont Senator Bernie Sanders, who earlier today ended his 2020 presidential campaign, has outlined a plan to initiate a $20 billion grant program within the Minority Business Development Agency that would give minority entrepreneurs money to start businesses. He’s also pushing for the establishment of a $10 billion grant program to support businesses in areas attacked by the War on Drugs.
At the state level, organizations like the Minority Business Association write pro-equity policy and lobby to get it enacted. These laws differ but share similar intent. The results may vary, however.
In Illinois, for example, social equity applicants can receive “technical assistance and support … on everything from creating a business plan to applying for a license.” Graduates of these programs earn points toward their application assessments, pay reduced fees and can access low-interest loans.
Meanwhile, experts have applauded Massachusetts’ directive that every license applicant submit a plan to address the disadvantages the drug war has placed on communities of color. Minorities interested in joining the industry can pick an educational track from entry level to entrepreneur and attend a program designed to get them into the field.
California, on the other hand, doesn’t mandate any attention to equity for its jurisdictions that opt into adult-use cannabis. Rather, it gives grant money to cities and counties that want to legalize and lets local-level lawmakers set their own rules.
In its 2018 annual report, the state’s cannabis commission committee that advises municipalities on diversity issues wrote, “Efforts to promote participation in the new legal cannabis industry by members of communities impacted by enforcement of the war on drugs have by most measures been unsuccessful.”
The committee noted problems like the lack of funding for programs or tools for equity applicants. Yvette McDowell, a California-based consultant in cannabis law, has additional complaints. Among them is the unfair ability of big-moneyed interests to easily lobby local legislators.
“We’ve had a mess with the social equity program,” she said. “You have politics being played ad nauseum where politicians are being influenced to do things that suit (big money) interests and stakeholders.”
Andrew Jones, assistant chief of intergovernmental and external affairs for California’s bureau of cannabis control, says the state kept the laws vague to let its diverse mix of jurisdictions legislate as they see fit.
“Local actors are best equipped to know what licensees need there,” he said.
With so many critiques of the various systems’ status quo, some activists, entrepreneurs and organizations are implementing their own campaigns and taking their solutions straight to the streets.
Shaw, for instance, intends to run her New Jersey cultivation company as an incubator that offers internships, public workshops and other programs that teach prospective business owners and executives how to enter and thrive in the industry.
As President of Minorities for Medical Marijuana and a member of many related boards, Leo Bridgewater preaches the direct-to-consumer approach to leveling the diversity playing field, starting with “boot camps” that guide minority would-be entrepreneurs through networking, accessing capital, filling out byzantine licensure paperwork, and more.
And Vangst, which offers career services, helps match equity applicants with companies looking to hire them.
Looking toward what isn’t yet legally possible, Craft Cannabis Alliance founder Adam Smith travels the country advocating for interstate commerce.
His recommendation is to put “qualified equity applicants first in line” for the chance to distribute, market and sell the imported product in the receiving states.
“This would move millions of people out of illicit markets years sooner and completely invert the distorted economics of state-siloed production,” Smith and Minority Cannabis Business Association president Jason Ortiz argued in an op-ed earlier this year.
Last summer, a few members of Congress introduced the State Cannabis Commerce Act to keep federal agencies from meddling in state cannabis industries, and Oregon became the first to pledge to enter this type of interstate commerce agreement as soon as possible. Smith expects Colorado and California to be next.
For his part, Bridgewater believes that many of the legacy cannabis advocates fail to use their institutional knowledge to look beyond legalization.
“We have advocates fighting so long (for legalization) they don’t know how to do anything but fight,” he says. “We’re asking a bunch of Flintstones to play a Jetsons game.”
The problem, he said, is that the established generation of activists aren’t conveying the current generation’s imperatives to equally out-of-touch lawmakers.
Instead, Bridgewater urges people of color to think about building generational wealth when they plot their entry into the industry.
DeVeaux encourages fellow African-Americans to do that by putting their existing capital into building an ancillary business, like one that provides janitorial services to dispensaries, with far lower financial barriers to entry than a dispensary or grow facility.
And later this year, Chappell will finally host his second cannabis conference. Not only will the conference educate participants, but it will provide services as well. The Philadelphia Defender’s Association, for instance, will be on hand to begin the expungement process for drug-law violators, and a doctor will register qualified Pennsylvania residents for a medical marijuana card.
“We want to transform how people want to get involved in the space,” he says. “When legalization happens, they’ll be one step ahead of the game.”