Chart: Not all states’ cannabis social equity programs are equal

There is no one-size-fits-all approach to addressing equity and diversity in the marijuana industry.

While a growing number of states have included social equity provisions in their marijuana programs, they’re approaching the issue in a variety of ways – with varying results.

On the recreational side of the industry, California, Illinois and Massachusetts all made social equity a key component of marijuana legalization.

Initiatives in each of those states are attempting to reach individuals who have been economically disadvantaged, disproportionately impacted by the war on drugs or both.

However, Massachusetts’ program has hit several speed bumps, and the state reports that only 1.2% of marijuana businesses are owned by minorities.

That stands in contrast to earlier social equity initiatives adopted in Ohio’s medical market, where the law mandated that 15% of licenses go to racial minorities – a rule that was eventually found unconstitutional.

Before that ruling, however, licenses were already issued and the state saw a significant boost in minority participation – resulting in more than 16% of licenses held by minorities.

In Oklahoma’s medical market, social equity was not part of the state’s legalization bill, but very low licensing fees and no caps on the number of cannabis business licenses that can be issued has lowered barriers to entry – and some industry experts believe this could do more to promote diversity than other, more targeted outreach efforts.

Markets without significant statewide equity provisions – such as Oregon – have seen some cities step up to tackle the issue.

For example, businesses in Portland whose owners or staff have previous marijuana convictions are eligible for reduced license fees, and a city marijuana sales tax was put in place in 2016 to generate funds for economic and education programs in communities where drug laws were disproportionately enforced.

Several states, such as Maine and Missouri, are still hammering out the details of their marijuana programs.

While no social equity provisions have been developed in those states yet, they could emerge before sales get underway.

More data about how social equity efforts are faring across several markets in the U.S. and an overview of the barriers faced by women and minorities looking to enter the cannabis industry can be found in Marijuana Business Daily’s recently released report, Women & Minorities in the Cannabis Industry.

Eli McVey can be reached at [email protected]

5 comments on “Chart: Not all states’ cannabis social equity programs are equal
  1. Chris Lindsey on

    Just to get into the details a little, Illinois has 5 areas that are equity-related: expungement, addtl points for equity applicants, access to low-interest loans for equity licensees, non-equity licensees have to meet a significant number of equity-oriented standards including additional fees, and there is a substantial community development program called 3Rs (funded with 20% of revenue).

    “Equity applicants” in this program are a little unusual. These are individuals who where arrested, charged, jailed, or convicted of a cannabis related offense, or who are related to someone who was, or who come from a community that was disproportionately impacted by law enforcement efforts in the war on cannabis. I think its the first equity program that is based on harms from the war, as opposed to race specifically, which is tricky to do. Once the program is fully in operation, there will be an analysis to see if the approach actually resulted in racial diversity – something we couldn’t really test for before the program actually exists. We have big hopes the equity provisions will actually deliver, and it will be interesting to see how it all unfolds.

    • Roz McCarthy on

      You are absolutely right Chris. We(M4MM) are also anxious to see how the program unfolds. Some of the other states are still having challenges 2 years in. Holding a social equity permit and not being operational is still a challenge due to lack of experience and lack of funding. And we won’t talk about how bigger companies try to come into the state and game the social equity program system for their benefit. (No name calling just being honest)

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