How to ensure legal marijuana works for everyone.

Some tips and tricks for creating a more equitable cannabis industry in New York State—and across the country.

#equality but I still don’t know what ba” (CC BY 2.0) by leighblackall

Our Social Equity Recommendations:

Passing ‘adult-use’ legalization legislation with robust social equity measures before federal legalization will be the best way to a) ensure impacted communities get access to economic opportunities in the industry and b) protect the health & safety of New Yorkers. The adult-use market should be developed in such a way that all New Yorkers — not just wealthy, well-connected and/or disproportionately white interests — are able to access social, legal and economic opportunities in the industry.

1. Create equity-focused licensing initiatives. New York — like Illinois and Massachusetts — should adopt a licensing model that prioritizes individuals that were harmed by the War on Drugs. This would include people who’ve lived in — or can demonstrate familial or otherwise significant ties to — communities that are disproportionately impacted by high rates of arrest and incarceration for offenses under the Controlled Substances Act. Same goes with businesses majority owned by individuals who had (pre-expungement) marijuana possession charges on their record. Given the extremely high costs of starting dispensaries and/or cultivation facilities (various sources estimate the price of entry for vertically-integrated licenses is between $15 and $30 million) — the law must allow for the development of less-capital intensive ‘tiers’ of businesses (i.e. delivery businesses, catering businesses, micro/craft-cultivation, social consumption spaces/cannabis lounges & restaurants, etc. Furthermore, legalization legislation should prioritize business applications from entrepreneurs from impacted communities for these licenses. Prioritized license review should also be granted to businesses where the majority of employees either a) reside in areas of disproportionate impact and/or b) have cannabis possession-related charges on their records.
2. Facilitate cannabis industry employment & entrepreneurship. Revenue from marijuana taxes should provide entrepreneurs and workers from impacted communities with the training, space and technical support they need to start businesses, find jobs and grow their careers in the state’s legal cannabis industry. The state’s marijuana regulatory agency can partner with community colleges to offer cannabis industry classes and certification programs, and work with private cannabis companies to develop internships, apprenticeships and employment opportunities for individuals who want to pursue careers in the industry. Local governments should partner with nonprofits and private businesses to provide low-interest loans, discretionary grants and tax credits to ”social equity” entrepreneurs. They should also help these entrepreneurs secure real estate, facility design and navigate the local approval processes.
3. Incentivize community investment by private cannabis companies. Cannabis companies are struggling when it comes to social equity and corporate social responsibility. While these initiatives are increasingly important to the regulatory compliance and financial health of their businesses, limited bandwidth makes prioritizing and administering impactful social equity programs operationally challenging — and so little has been done. As a result, lawmakers must incentivize — and sometimes mandate — cannabis businesses play a bigger part in advancing social equity goals. These companies will strongly benefit from “win-win” solutions — practical, business-friendly initiatives that achieve social equity goals, while also addressing other business challenges like workforce growth, employee retention, competitive differentiation, and customer growth. Examples include:

• “Reducing barriers to entry in the industry” by providing free and/or heavily discounted mentoring, professional and technical services for individuals and businesses facing systemic barriers.
• Promoting sustainable, socially and economically reparative practices, and/or providing business assets (time, skills, financing) to endeavors in a geographical location designated as a disproportionately impacted area that will have a positive impact on the members of that community or the community as a whole”.

Cannabis companies who demonstrate material support for equity-focused ‘economic empowerment initiatives’ should get access to discretionary grants, tax credits and prioritized review of their business applications. Some examples of suitable economic empowerment initiatives are a) creating apprenticeships and other workforce development programs for individuals from impacted communities b) deploying funds/resources to incubate cannabis-industry businesses started by underserved entrepreneurs, and/or c) making monetary donations to community organizations and/or public services that serve impacted communities (youth programming, public libraries, educational campaigns, etc.). New York should also incentivize legal cannabis companies to recruit workers from traditionally underserved labor markets, especially low-income black, Latinx and rural communities.

Reinvest in impacted communities. Lastly, the state should reinvest a large proportion of the tax revenues generated by cannabis sales in the communities most affected by the War on Drugs. These dollars should fund community centers, youth programs, public libraries, health education programs, and other public benefit initiatives. Funds from tax revenues should be supplemented with discretionary funds allocated by the state and donations from cannabis companies, nonprofits and consumers.