What Does Cannabis Equity Look Like?

Journal Back to Archive07.8.20

How does the cannabis industry overcome the legacy of prohibition, and help victims of unfair drug enforcement? And how do we ensure those who paved the way, stay in the industry as it moves towards big business?

 

In 1996, California passed the Compassionate Use Act, becoming the first state to permit the sale and use of cannabis for medical purposes. At the time, it was hard to imagine how a small adjustment in the legal landscape could spur such rapid change in Americans’ attitudes and behavior, and even the most well-informed policy experts made some lousy predictions. Some foresaw a spike in road fatalities. Others expected an uptick in violent and property crime. But these never materialized, and over the next two decades, a lot of the pessimists’ worst fears about commercial cannabis have been proven magnificently, hilariously wrong.

 

Of course, the optimists got a lot wrong, too. These are disappointing times for anyone who thought legalization could reverse some of the racial inequities intensified by the War on Drugs, and there’s a growing concern that cannabis now resembles a big, hierarchical industry like any other, in which people of color are chronically held back from positions of power and authority. An article in Buzzfeed estimates that only one percent of the country’s thousands of storefront dispensaries are owned by black people, and despite all the evidence that the cannabis industry can benefit minority entrepreneurs, a huge amount of potential is still untapped.

 

Some of these problems are being addressed by state and local governments. Getting a dispensary license, for example, is expensive and time-consuming, but decidedly easier for applicants who have stable capital and flexible credit, and who don’t mind spending more upfront on real estate, insurance, vendors, or staff. As a corrective, states like Michigan have lower fees for applicants from communities that have been affected by unfair drug enforcement; this provides a small leg up to new owners, who may already have expenses they need to cover. California has taken a similar approach, making loans, grants, and technical assistance available to people just getting into the industry, and these are buttressed by city programs in Los Angeles and San Francisco. Both Illinois and Pennsylvania offer extra license application points to dispensaries that are managed or operated by African Americans or Latinos, and Massachusetts has encouraged applications from people with drug records, while also offering training and mentorship to prospective shop owners. 

 

In other ways, the path to cannabis equity is being paved in the private sector. Organizations like Equity First and the National Diversity and Inclusion Cannabis Alliance have made huge strides in educating the public, and if you care about the racial or economic barriers that prevent people from getting their slice of the $146.4 billion cannabis pie, they may be worth joining. Even for-profit companies like Vangst have their own ambitious social equity hiring programs: the cannabis-only recruiting platform, based in Denver, launched theirs recently with a San Francisco Cannabis Career Fair. The event coincided with National Expungement Week and included clinics and other resources to help people with criminal histories find employment.

 

“One of the really unique things we’re working on is helping clients, from day one, prioritize diversity and inclusion,” founder and CEO Karson Humiston told Cheddar last month. “We really have a chance to define how cannabis companies roll out, especially around their hiring.”

 

Earlier this year, Vangst announced they’d raised $10 million in Series A funding. The company has gotten a lot of positive press for helping city governments in Los Angeles and Oakland to connect cannabis businesses with qualified candidates, and Humiston is confident that they can extend their equity program to other states. 

 

But they’ll have their work cut out for them, and the pace can be frustrating. Last month, an article in the Boston Globe described a young black entrepreneur with a marijuana record who was forced to wait for a dispensary license while ten wealthier, white-owned companies got quick approval. Steven Hoffman, chairman of the Cannabis Commission, sympathized with people whose optimism had gone sour.

 

“We’re nowhere near where we need to be, but we’re doing a lot,” he told the Globe. “We need some help from the state [Legislature] and the municipalities and from private industry—and I’m confident that’s all going to come together—but it takes time, and it’s hard.”

 

In the meantime, there are lots of positive steps that non-professionals can take. One strategy is to donate directly to nonprofits: the Minority Cannabis Industry Association, for example, drafts model policies, provides legal counsel to new businesses, and interfaces directly with lawmakers to advocate for reform. Ordinary people can write to their representatives, too, and the Equity First Alliance is always looking for volunteers. And of course, it always helps to shop at minority-owned dispensaries like Simply Pure, in Denver; Blunts and Moore, in Oakland; or Detroit’s BotaniQ. Political activism has its place, but so does voting with first is to vote with your wallet.