(This story has been updated to clarify that Harvest Ohio reached a $500,000 settlement with Ohio regulators and that payment was not a fine.)
The U.S. cannabis industry’s record on social equity is patchy at best, and it is the large multistate operators who have generally failed so far to take significant leadership on the issue, according to social equity advocates.
Recent news might well support that claim.
For example, just as Washington state is enacting a new law giving social equity applicants exclusive rights to revoked cannabis licenses, Harvest Ohio – a privately held group with ties to Arizona-based MSO Harvest Health & Recreation – reached a $500,000 settlement with Ohio regulators after claiming minority ownership to boost its chances of gaining licenses in the state.
MSOs are beginning to take the issue more seriously, but their efforts so far are still lacking, according to social equity advocates.
“There really isn’t anyone who has stepped up and done it right,” Shanita Penny, founder of Baltimore-based consulting group Budding Solutions and former president of the Minority Cannabis Business Association, told Marijuana Business Daily.
“There is a lack of genuine interest and commitment from the MSOs when it comes to social equity.”
The moral case for greater minority participation in the U.S. cannabis industry is indisputable, campaigners for social equity argue.
It is an industry that, when completely illegal, discriminated against minorities – particularly a large number of African Americans who remain incarcerated for simple possession.
“The big MSOs are stepping on the backs of prisoners. Your business opportunity only exists because so many people went to prison,” Jackie McGowan, a California-based consultant, told MJBizDaily.
For its part, Harvest has worked since September 2019 with well-known cannabis entrepreneur Steve DeAngelo‘s Last Prisoner Project, which aims to offer clemency and rehabilitation for people imprisoned for marijuana offenses. DeAngelo is the founder of California-based medical and recreational marijuana retailer Harborside.
Harvest also recently hired a chief strategy officer to head up its various programs and is setting up a pilot program in Ohio to boost its social equity efforts there.
However, the COVID-19 pandemic has delayed the launch of the company’s social equity programs and any start dates cannot be predicted, a company spokesman wrote in an email to MJBizDaily.
Massachusetts-based Curaleaf, another large MSO, hired Khadijah Tribble – an expert in social equity – as its vice president of corporate social responsibility in early March.
The company’s new chief marketing officer, Jason White, who joined the company through the acquisition of Oregon-based Cura Partners’ Select cannabis brand, is also behind efforts to improve the company’s social equity record.
“We all have to own the past, but we have to make sure we do it right going forward,” White told Marijuana Business Daily. “I can tell you that (CEO) Joe Lusardi is 100% supportive of what we want to do in the social equity space.”
Companies such as Curaleaf have had to focus on expanding their geographical footprint before solving some of society’s bigger issues, White added.
“We have to grow this industry. We have to be one of the leaders that continue to drive the industry.” he said.
“Without this growth, these conversations do not happen.”
Good business practice will help legalization efforts
Moral arguments aside, it also makes business sense to do right by the communities where MSOs operate, both advocates and marijuana operators agree.
“It is possible to be a big cannabis player and a good cannabis player,” Tribble at Curaleaf said.
People of color and socially conscious millennials, for example, will respond to a greater emphasis on social equity and that likely can improve a company’s bottom line, Penny at Budding Solutions said.
And, if federal cannabis legalization ever happens, the industry in general will have to have a more robust social equity component, she argued.
Curaleaf’s Tribble echoed that sentiment, adding that companies must meet their own responsibilities regardless of any eventual federal legalization, which she agreed must have a social equity focus.
“Curaleaf understands the path forward with or without government mandates,” she said.
Both Tribble and her colleague White pointed to the growing focus on social equity issues among new adult-use states such as Illinois, saying the program there represents the path forward.
That state, which launched adult-use sales Jan. 1, has relatively robust social equity regulations and is seen by observers as a possible blueprint for the industry going forward.
“There is a responsibility first and foremost that the policies and regulations that allow for social equity show up as a priority,” Tribble said.
The road to true social equity remains a difficult one, however, and not one that MSOs have generally handled well so far, Penny at Budding Solutions added.
But she remains hopeful.
“It will take radical collaboration to make social equity work, and we have the perfect opportunity in cannabis to show how it can work,” she said.
“We need the MSOs to truly understand the value of social equity as it relates to society so that we can set an example to other industries.”
Nick Thomas can be reached at email@example.com