What Does Social Equity Mean in the Cannabis Industry?

Introduction:

The impact of the war on drugs has been significantly felt by Black and Brown communities and their residential areas. Despite the increasing legalization of cannabis nationwide, the lingering consequences persist.

According to the ACLU, statistics show that, on average, Black individuals are 3.64 times more likely to face arrest for “marijuana possession” compared to their White counterparts, despite similar usage rates across both ethnic demographics.

Social equity in the cannabis industry refers to the fair and just involvement of individuals and communities that have been disproportionately affected by cannabis prohibition and enforcement. This includes initiatives to provide opportunities for these groups to participate in the legal cannabis market, such as through licensing programs, job training, access to capital, and community reinvestment programs. Some states have expanded the definitions to include groups from economically disadvantaged areas.

The Difference Between “Equity” and “Equality”:

“Equity” and “equality” are terms often used interchangeably, but they represent distinct concepts with different implications, particularly in the context of social justice and fairness.

Equality refers to the state of being equal, where everyone is treated in the same manner regardless of their circumstances or needs. This concept is often represented by the image of individuals standing on boxes of the same height to see over a fence, regardless of whether they require the additional height to have an equal view. While equality aims to ensure fairness by treating everyone equally, it does not necessarily account for existing disparities or varying needs among individuals.

On the other hand, equity emphasizes fairness and justice by acknowledging and addressing the inherent inequalities and systemic barriers that certain groups may face. It recognizes that different individuals or communities may require different levels of support or resources to achieve true equality of opportunity. Equity involves distributing resources, opportunities, and support based on the specific needs and circumstances of individuals or groups, aiming to level the playing field and address historical and systemic injustices.

In the cannabis industry, the distinction between equity and equality is crucial, especially concerning social equity initiatives aimed at addressing the disproportionate impact of cannabis prohibition on marginalized communities. While equality in licensing or access to opportunities would mean treating all applicants or businesses the same, regardless of their background or circumstances, equity recognizes the need to provide additional support and resources to those who have been historically disadvantaged.

“Social Equity” Varies from State to State:

In New Jersey:

The NJ Cannabis Regulatory Commission centers social equity in its work through two primary initiatives: the prioritization of social equity businesses in the cannabis business licensing process, and the investment of tax revenues raised from cannabis sales into communities negatively impacted by cannabis prohibition. Social Equity Businesses are owned by people who have lived in an Economically Disadvantaged Area of the state or who have convictions for cannabis-related offenses (expunged or not). Social Equity applicants are prioritized in the business license application process. This means that these applications are reviewed before all other applications, regardless of when they are received. All applications are accepted on a rolling basis – there is no deadline. Social equity microbusinesses are considered first, then social equity standard businesses, then those applying for conversion from conditional to an annual license. In an economic environment where resources such as real estate and capital are finite, this prioritization helps to level the field for social equity applicants.

In New York:

On March 31, 2021, New York State legalized adult-use cannabis (also known as marijuana, or recreational marijuana) by passing the Marijuana Regulation & Taxation Act (MRTA). A major focus of the MRTA is social and economic equity. The MRTA incentivizes participation in the new industry for individuals disproportionally impacted by cannabis prohibition, automatically expunges an individual’s past marijuana convictions, and invests 40% of the adult-use cannabis tax revenue toward rebuilding communities harmed by the War on Drugs.

In California:

In California, social equity in the cannabis industry is defined by various local governments and state agencies, such as the Bureau of Cannabis Control (BCC) and the Cannabis Equity Act. The focus is on addressing the historical disparities and injustices caused by cannabis prohibition, particularly in communities disproportionately impacted by enforcement.

In Colorado:

The Marijuana Enforcement Division is committed to fostering an inclusive and equitable cannabis industry in Colorado that acknowledges the effects of decades of criminal enforcement of marijuana laws on communities of color. As part of Colorado’s commitment to equity, diversity, and inclusion, the MED is focusing on outreach and engagement resources to support diversity initiatives in the cannabis industry. The MED’s efforts aim to increase diversity in the number of Owner Licenses, which has less diverse representation in comparison to the number of Employee Licensees, so the industry is more reflective of Colorado’s demographics. A person who meets the eligibility criteria for a Social Equity Licensee can participate in the Division’s “Accelerator Program” or may apply to independently own and operate a Regulated Marijuana Business license.

In Massachusetts:

The Social Equity Program (SEP) is a free, statewide technical assistance and training program that creates sustainable pathways into the cannabis industry for individuals most impacted by the War on Drugs, including disproportionate arrest and incarceration as the result of cannabis prohibition. The SEP is not a license type. By completing this program, participants will acquire tools and training to help apply for a license through the Cannabis Control Commission if they are interested in owning a “Marijuana Establishment” or “Medical Marijuana Treatment Center”. However, participants in the Entrepreneurship track are not guaranteed licensure from the Commission. Furthermore, alternative SEP pathways to becoming a manager or worker, or providing contract services to the industry, do not require a license application to the Commission.

Looking Ahead: What Should Change in the “Social Equity” Landscape?

Regulators should consider legislation that expands social equity to family members of those who have been disproportionately impacted by the war on drugs.

Extending social equity initiatives to encompass family members of individuals affected by the war on drugs can significantly enhance the breadth of support and opportunities for communities disproportionately impacted by cannabis prohibition. By broadening eligibility criteria to encompass relatives, including parents, siblings, or children, who have endured the consequences of drug-related convictions or enforcement, regulators can more effectively address the systemic inequities entrenched within these communities.

Furthermore, robust reporting mechanisms are essential to ensure accountability and transparency in the implementation of social equity programs. Regulatory bodies should mandate comprehensive data collection and reporting on the demographics of license holders, recipients of social equity benefits, and the overall impact of these initiatives on affected communities. Making this data publicly accessible and easily navigable promotes transparency and allows stakeholders to assess whether statutory requirements are being met while evaluating the effectiveness of social equity measures in mitigating historical injustices.

By addressing social equity issues, the cannabis industry can become more inclusive and reflective of the diverse communities it serves, fostering a more equitable and just environment for all stakeholders involved.