10 reasons why now is the right time for social equity programs.

If legislators don’t act quickly, they may miss a valuable opportunity to help create a diverse and equitable legal cannabis industry.

Image courtesy of Jopwell

We’ve already made the ethical case for social equity initiatives. Now we’re making the practical one. As New York (once again) threatens to de-prioritize legalization, we’re concerned about the impact the delay could have on the long-term health and viability of the state’s social equity programming.

Politicians — and the general public — should be aware that there’s real urgency around passing social equity-focused legalization legislation. If our legislators don’t act quickly, they could miss out on one of their last chances to make real change.

Why? We lay out ten reasons below.

1. Heightened public awareness around the failure of America’s War on Drugs. There’s broad consensus — amongst both the general public and America’s political class — that marijuana prohibition has not only failed to curb cannabis use and stop crime — it’s been a key driver of the racial and economic inequities the country is currently facing.
2. We’re in a watershed moment for criminal justice reform. A national reckoning with the failures of the War on Drugs — as well as the devastation brought about by mass incarceration — has resulted in a groundswell of bipartisan political support for broad-based criminal justice reforms, including an end to marijuana prohibition. We should take advantage of these shifting sentiments to advocate for restorative justice and social equity programming.
3. The rise of progressive politics. The conversation around income inequality now occupies a central role in America’s public and political consciousness. Not only has this forced the nation to reckon with the discriminatory policies that continue to fuel the country’s racial wealth gap, it has led to growing public demands for policies that work to rectify these historical injustices.
4. Growing public appetite for social equity initiatives. Across the country, cannabis industry lobbyists — including former House Speaker John Boehner, who now occupies a lucrative seat on the board of publicly traded cannabis company Acreage Holdings — have worked to sell through legalization legislation by painting a picture of opportunity and prosperity for all. Industry reps pledged legal marijuana would become a much-needed economic engine in the (disproportionately urban, low-income and/or minority) communities that were most harmed by cannabis’s criminalization in the first place. However, recent events have worked to expose the industry’s dirty little secret; despite all the talk of a brand-new, radically-inclusive industry, 80% of legal cannabis companies are controlled by white men. And it goes beyond bad optics. The industry’s homogeneity has spurred widespread interest in programs and policies that aim at help communities realize the diverse and equitable industry they were promised.
5. The increased efficacy of social equity programming. More and more states and municipalities have rolled out social equity initiatives over the past few years. The proliferation of these programs allows us to access robust data sets related to the successes (and failures) of current social equity initiatives — as well as recommendations as to how we could improve these programs. Now that legislators, industry leaders and policy people are able to leverage these insights, they’re in a much better position to create more efficient, impactful social equity programs (as well as improve existing initiatives).
6. The cannabis industry is facing mounting public — and political — pressures. The breathless media coverage that accompanied the early days of this emerging sector has been replaced by more measured, comprehensive (and oftentimes critical) reporting on cannabis industry antics. This increased scrutiny has forced cannabis companies to search for ways to demonstrate they’re responsible members of the business — and broader civic — community. Showing support for social equity programs is a strategic way for a cannabis company to convey to politicians, regulators and consumers that they’re behaving as good corporate citizens.
7. The maturation of the cannabis industry. Many cannabis companies now have the financial and operational resources required to support more robust social impact initiatives. And given how crowded the cannabis marketplace currently is, creating a social impact program is a smart way for a company to differentiate themselves from their competitors — as well as to appeal to new, mission-driven customers.
8. The potential impact of federal legalization on the legal status of social equity initiatives. Most politicians and industry experts now agree the US is on the cusp of federal legalization. When that does happen, social equity programs will likely fall under the fed’s regulatory purview. As evidenced by the recent rulings in Ohio and Maryland, this increased scrutiny could result in state-run social equity programs being deemed unconstitutional. That said — while no court has directly opined on the issue, many policy experts predict federal courts would allow a state’s (previously made) licensing decisions to stand on precedent. Avoiding this legal limbo is one reason why state legalization is so urgent. In order to safeguard social equity programs, we must pass (and implement) social-equity focused legislation before the clock runs out.
9. The likely impact of federal legalization on the success of social equity entrepreneurship. Even if federal courts do find in favor of state-administered preferential licensing processes, the end of federal prohibition could still have a devastating impact on the survivorship rate of social equity businesses. Federal legalization would remove many of the barriers to entry cannabis companies are currently facing (access to banking services, 280E, etc.,). This loosened regulatory environment will only incentivize larger, more sophisticated players to enter the (already hyper-competitive) legal cannabis landscape. Without discounted and/or preferential licensing programs already in place, the increased influence of these well-capitalized cannabis companies may make it all but impossible for small and mid-sized social equity businesses to enter — and succeed — in the industry.
10. The expected impact of federal legalization on the sustainability of social equity businesses. We’re already seeing big, well-financed companies start to sideline small-scale and/or social equity businesses. And — as if this increased competition doesn’t make it hard enough for social equity businesses — easier access to banking services, interstate commerce, etc. would allow these larger cannabis companies to operate even more efficiently. This shift could see cannabis prices plummet. Social equity-focused legalization legislation is one way states can work to ensure these large corporations don’t completely drive out craft production and ‘mom and pop’ retailing. That said — for reasons explained earlier — it’s crucial we ensure these initiatives are in place prior to federal legalization.

Questions, comments or just want to say hello? Drop us at line at hello@equityorganization.org.