Chart: Diversity still a hot topic in Maryland’s medical marijuana industry

Over 35% of those with an ownership stake in a Maryland medical marijuana company – and nearly 60% of those employed by MMJ businesses – are racial minorities, according to preliminary data released by the Maryland Medical Cannabis Commission.

But some industry watchers believe those numbers don’t tell the whole story and still contend that the state failed to adequately ensure racial diversity when licensing MMJ businesses.

Four years after Maryland legalized medical cannabis, sales through licensed dispensaries finally began last week.

The licensing process for cultivators, however, was delayed by a legal challenge.

A cultivation company that failed to win a license is arguing that the Maryland commission did not consider an applicant’s race when handing out the preliminary grower licenses – a requirement spelled out in the initial law legalizing MMJ.

Though sales are underway and final licenses have been awarded, the issue of racial diversity in Maryland’s MMJ industry hasn’t been resolved.

State lawmakers will consider “emergency legislation” to expand the MMJ program industry when they reconvene early next year.

Here’s what you need to know about the situation:

  • Maryland’s commission released diversity data in June based on survey responses from 79 preapproved MMJ businesses. A total of 321 business owners and 238 employees were considered as part of the survey, which will be conducted annually.
  • Most businesses participating in Maryland’s MMJ industry were included in the survey. Eleven growers, nine processors and 59 dispensaries provided demographic data, representing 73%, 60% and 58%, respectively, of all companies granted preapproval.
  • The survey data reflects the percentage of respondents who have any ownership stake in a business, not necessarily a controlling stake. For example, 10% of a business may be controlled by a racial minority, meaning the business has a minority owner but is not minority-owned.
  • A national survey of cannabis business owners and founders conducted by Marijuana Business Daily last August found that 19% of respondents who launched a cannabis business and/or have an ownership stake in a marijuana company are racial minorities.

Though Maryland’s efforts to boost diversity in its MMJ program have been criticized, the data clearly shows a higher rate of minority ownership in marijuana businesses relative to the national average.

It’s also important to note that Maryland’s diversity data refers only to plant-touching businesses, whereas the MJBizDaily survey includes ancillary companies – like marketing firms or law offices – where the rate of minority business ownership is higher.

Eli McVey can be reached at [email protected]

7 comments on “Chart: Diversity still a hot topic in Maryland’s medical marijuana industry
  1. Lyle Courtsal on

    See how the growers are running scared? Uh-huh. . . . That’s where the laws are the worst. So time for a serious dedicated legal defense fund, huh. . . . Becuz here comes the Sessions monster.

  2. Angela on

    Here I thought we put affirmative action to bed decades ago. Whining non-minorities… RACE should never be an issue and NEVER be a part of deciding who can/should be an owner in any cannabis related business. Shame on Maryland.

  3. AmericanMade on

    Here’s the deal. . . . .

    1) If everybody who wanted a license, could get a license, the market would be flooded.
    2) Due to the cost of starting up, money can only come from people with access to it.

    Knowing the above 2 factors, it is predictable that people who do manage to get a license, are not “mom and pop shops”. . . . .(Or these M&P’s sell their business immediately afterwards to a large corp who only needs their license.)

    The Oakland equity program, ensures that an individual from Oakland is a 50% owner in order to fast track the license process and get ahead of all the other people jockeying for a limited number of licenses.

    Below is what Oakland is asking for to have an equity partner:

    2. Verification of Equity Status
    OMC 5.80.010 and OMC 5.81 define an “Equity Applicant” as an Applicant whose ownership/owner2
    1.   Is an Oakland resident; and
    2.   Has an annual income at or less than 80 percent of Oakland Average Medium Income (AMI)
    adjusted for household size; and  
    3.   Either  
    (i) has lived in any combination of Oakland police beats 2X, 2Y, 6X, 7X, 19X, 21X, 21Y, 23X, 26Y,
    27X, 27Y, 29X, 30X, 30Y, 31Y, 32X, 33X, 34X, 5X, 8X and 35X for at least ten of the last twenty years
    2 “Ownership” shall mean the individual or individuals who:

    i. With respect to for?profit entities, including without limitation corporations partnerships, limited
    liability companies, has or have an aggregate ownership interest (other than a security interest,
    lien, or encumbrance) of 50% or more of the entity.

    ii. With respect to not for?profit entities, including without limitation a non?profit corporation or
    similar entity, constitutes or constitute a majority of the board of directors.

    iii. With respect to collective has or have a controlling interest in the collective’s governing body.

    (ii) was arrested after November 5, 1996 and convicted of a cannabis crime committed in Oakland.
    Please provide supporting documentation as described below.

    For proof of ownership please provide entity formation documents or documents filed with the California
    Secretary of State (e.g. articles of incorporation, stock issuance records, operating agreements,
    partnership agreements).  
    For proof of income please provide federal tax returns and at least one of the following documents: two
    months of pay stubs, current Profit and Loss Statement, or Balance Sheet.   
    For proof of conviction should be demonstrated through Court documents, Probation documents,
    Department of Corrections or Federal Bureau of Prisons documentation.
    For proof of residency please complete the below Proof of Residency Chart and provide a minimum of
    two of the documents listed below, evidencing 10 years of residency shall be considered acceptable proof
    of residency.   All residency documents must list the applicant’s first and last name, and the Oakland
    residence address in applicable police beats.
    ? California driver’s record; or
    ? California identification card record ; or
    ? Property tax billing and payments; or  
    ? Verified copies of state or federal income tax returns where an Oakland address is listed
    as a primary address; or  
    ? Utility company billing and payment covering any month in each of the ten years.

    Let’s not forget about the need for you to describe, how much you get paid, what odor mitigation you will have and what city beautification program you will sponsor.

  4. Dr Denise A. Valenti on

    While equity initiatives are to be encouraged, so far the discussions are not truly equitable or inclusive or true diversity. Diversity is never the exclusion of federally recognized socially and economically disadvantaged groups. Where is the inclusion of disabled? There seems to be lack of diversity. This is certainly odd given that the marijuana industry is seeking federal recognition. Ignoring federal standards around diversity is certainly not the way to obtain credibility. Excluding entire categories of diversity is not equity, but selective and preferential treatment.

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