Oregon’s easy cannabis licensing rules allow for some social equity, but more funding needed

(This is the fourth in a series of stories from Marijuana Business Daily examining social equity regulations and business opportunities in key U.S. markets. Part 1 covered Illinois, Part 2 covered Michigan, Part 3 covered California and Part 5 covered Washington state.)

Oregon’s social equity provisions might be lacking compared to other statewide programs, but some industry analysts cite the relatively low barrier to entry for cannabis entrepreneurs as one way the regulations foster racial diversity.

The analysts also point to Oregon’s largest city, Portland, as pushing the conversation forward in terms of greater opportunities for minority cannabis entrepreneurs.

The state’s cannabis regulations, for good or ill, are well-known in the industry for offering some of the lowest licensing fees and, for several years, not limiting the number of permits.

Those provisions led to an oversupply of wholesale marijuana flower, a steep drop in prices and the departure of companies from the fiercely competitive market.

But since the market recently started to correct and wholesale flower prices began rising, the small-business-friendly nature of the regulations has also allowed entrepreneurs from more limited socioeconomic means to apply for cannabis business permits.

“When you have that open licensing opportunity, then people have the chance to get in there and compete,” said Jesce Horton, a Portland-based cannabis cultivator and former chair of the Minority Cannabis Business Association.

Still, Horton admits that Oregon has struggled to adopt a statewide social equity law.

“Without a doubt there is a lot of room for growth,” he said.

Horton also points out that the market has changed in the past few years: Fewer business licenses are being issued, and the permit approval process has slowed.

Capital access

But even with a low barrier of entry for cannabis entrepreneurs, the lack of access to capital for those who are socioeconomically disadvantaged remains a significant stumbling block to success in the industry.

Enter the NuLeaf Project, co-founded and directed by Jeannette Ward Horton, who until earlier this year ran communications for Denver-based cannabis software firm Akerna. She’s also married to Jesce Horton.

Her Portland-based project is geared toward helping social equity applicants gain the access to capital necessary to succeed through grants and funding from cannabis tax dollars.

Ward Horton agrees that Oregon has one of the best licensing structures for creating equity, but “the problem is capital.”

Her organization has helped businesses get funding, including grant money. It also provides coaching and mentoring.

All this comes amid discussion about how cannabis tax revenue is being used, particularly in Portland, where roughly 80% of the money was being funneled to fund law enforcement.

Ward Horton said that tax money has been redirected from the police to the general fund, though the funds can still be used for law enforcement.

Another way to remove a hurdle, according to Ward Horton: Lower costs for cannabis companies by reducing arbitrary regulations, such as requiring labels to be a set size and printed on special paper.

Progress in Portland

At the city level, Portland is leading the state’s conversation about increasing opportunities for would-be cannabis entrepreneurs who come from socially disadvantaged backgrounds.

The city’s Office of Community and Civic Life recently tapped Dasheeda Dawson to be its new cannabis program supervisor.

According to Dawson, the conversation about how social equity should be defined has begun.

“That’s why I was selected to oversee the Portland program,” she said. “There is a lot of work to be done.”

Dawson said social equity has been defined as a theory for policymaking and city programs as a way to ensure everyone has equitable access to take advantage of what is available to all citizens.

But she noted that certain barriers have “caused inequity across a lot of our society.”

For example, Dawson cited rules that bar people from working for or owning a cannabis company if they’ve previously been arrested for marijuana-related charges.

Social equity rules, she added, should help to correct that.

Her goals are to execute on the intent of the social equity push and to track how social equity money is performing in the industry.

To date, the city has given out about $1 million in grants for social equity initiatives, according to Dawson.

Not enough

Kendra Freeman, chief product officer at Portland-based sports CBD company Mendi and board member of the Oregon Cannabis Association, noted that while the licensing fees are relatively low at $6,000, the other costs associated with starting a marijuana company can be prohibitive.

She would like to see more statewide grants and tax allocation for the Black and brown communities.

“This plant became illegal because of racism,” Freeman said, questioning why social equity wasn’t part of Oregon’s rules from the start.

“Even today as we’re talking, there are people sitting in jail for marijuana crimes and there are people making billions of dollars with the same plant. That’s not right.”

Freeman called on the leaders of Oregon to look at the “big picture.”

Without leveling the playing field for minority marijuana entrepreneurs, “the cannabis industry will always look a certain way, and that’s not diverse,” Freeman said.

“They didn’t get it written in the legislation, but I’m hoping the leaders are listening now,” she added.

Oregon should do better than even Illinois, Freeman said, because she expects once business licenses in that state start going out, there won’t be people of color filling the role of executives.

“People are tired of hearing social equity is working when it’s really not,” she added.

Bart Schaneman can be reached at [email protected]

For a sampling of organizations and efforts that support, foster and enhance social equity in the cannabis industry as well as opportunities for minorities, overall diversity and racial justice, click here

Leave a Reply

Your email address will not be published. Required fields are marked *