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Social Equity in Cannabis

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A positive thing about the implementation of adult use cannabis programs in various states has been assurance that a portion of the cannabis tax/licensing revenue would be allocated for use in specific equity programs. Such programs are designed to address inequities for people of color—from the racist policies that placed the heaviest burden of the enforcement of the War on Drugs upon people and communities of color, to the lack of resources available to those groups to enter the regulated cannabis industry.

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Those inequalities are not a matter of opinion or liberal white guilt; it's a fact that the disproportionate enforcement of cannabis laws fell heaviest upon the same people who have less access to the capital needed to establish themselves in an industry which had over $12 billion in global sales in 2018, is expected to hit nearly $17 billion this year, and could top $31 billion by 2020.

But as it turns out, some programs are not exactly spending the money as it was intended, to support establishing stakeholder positions for people of color in cannabis. Portland Mercury News Editor Alex Zielinski has written an informative piece about the distribution of cannabis taxes in Portland, a must read. (Spoiler: Law enforcement took the majority of the money.) Yet Portland isn't alone.

The website Merry Jane recently summed up two programs struggling with similar well intentioned and underfunded goals. In Massachusetts, the state senate recently rejected a proposal by Sen. Sonia Chang-Díaz that would have provided zero-interest, cannabis-related business loans to "benefit small businesses, diverse owners and disenfranchised communities." The program would have cost a remarkably reasonable $1 million of a state budget totaling $43 billion, and would have become self-sustaining with a portion of the projected cannabis tax revenue and other sources. Chang-Diaz pointed out that of all the 19 dispensary licenses issued, none had gone to any of the state's numerous programs designed to support disenfranchised groups.

Los Angeles has an annual budget of over $10 billion, and set aside a mere $3 million to fund its new social equity program for the cannabis industry. Per CannabisWire, that's far short of what's needed to provide the technical support for what is expected to be some 1,000 industry applicants from minority communities.

The very superheroine in name and deed, Cat Packer, the Department of Cannabis Regulation director, asked the L.A. City Council for an additional $2.25 million to fully fund the social equity program—a move that had widespread support from the mayor and council.

L.A. officials also wanted more money for police and cannabis enforcement. In an effort to support and raise the tax revenue from cannabis sales, the mayor's budget requested an additional $10 million strictly for police enforcement against unlicensed cannabis businesses. Capturing the lost revenue from illegal sales could dramatically grow the current projections of $40 million in L.A. from cannabis tax revenue and fees. Still, $10 million for weed cops? Like me, that seems high.

Some cities and states are directing cannabis revenue toward programs which serve marginalized communities. Colorado has an impressive track record of funding education and programs to address homelessness with its canna-revenue. Last month, the city council in Clark County, Nevada—home to Las Vegas—unanimously allocated a total of $ 1.8 million in cannabis tax and fees to programs to end youth homelessness, and to house those with serious medical conditions.

The cannabis industry has a well-known diversity problem. One study estimated that only 17 percent of executive positions in the cannabis industry were held by minorities. A study in 2016 estimated that the number of cannabis dispensaries owned by African Americans was all of 1 percent.

The consolidation and homogenization of Oregon's cannabis industry is upon us, making it all the more important that we remain vigilant in supporting those numbers changing. There is a moral obligation that while the inevitable "rich white guys get richer" model will flourish, that it should be offset with adequate funding for programs which help level a vastly unlevel playing field. Be it cannabis arrest record expungement, incubation programs or no-interest loans and grants, social equity in cannabis should be undertaken now, to ensure everyone an option to participate.

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