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Reparations Are Leading Today’s Cannabis Reform Movement – Here’s Why

By Alexander Beadle

Published: Jul 10, 2019   
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Last month, Illinois became the 11th state to legalize recreational cannabis, and the second to legalize the drug through its state legislature

But, perhaps just as importantly, Illinois became the first state in the nation to include language in their legalization bill which would offer reparations, in the form of a comprehensive social equity program, to local communities that had suffered disproportionately from strict cannabis prohibition during the country’s wider “war on drugs.” 

What are these social equity programs?

Drug policy experts and cannabis legalization advocates say that reparations and social equity programs are sorely needed in order to compensate for the decades of disproportionate suffering that certain communities experienced as a result of cannabis criminalization.

The Drug Policy Alliance says that lower income communities and communities of color often disproportionately bear the impact of these strict drug laws. Higher arrest and incarceration rates for these communities, they say, are more reflective of law enforcement’s disproportionate focus on these communities rather than any real increased prevalence of drug use

Prior drug convictions can provide a barrier to accessing many services, including securing business loans, applying for student aid, and seeking employment. These exclusions can make it extremely difficult for those who were criminalized in the “war on drugs” to participate in a now-legal cannabis market in their state. And beyond merely making it difficult, some states have made it outright impossible for a person with a past drug conviction to be involved in the legal market, by categorically barring those with historic drug offenses from working in the industry.

Even without previous drug offenses, many people of color and low-income individuals struggle to get involved in the legal market. Sarah Cross, the chief operating officer of Green Rush Consulting, told Buzzfeed News that it takes an estimated quarter of a million dollars to start up your own legal cannabis business. After centuries of systemic discrimination, black Americans are less likely to be able to raise the kind of amounts needed to start their own business; similarly, individuals from low income areas may face the same challenge. Also notable is the fact that while cannabis remains federally illegal, banks cannot give small business loans to cannabis companies.

Social equity programs exist to counteract these challenges. While the exact benefits available through social equity programs differ between regions, their general aim is to provide added support to members of disadvantaged communities who are seeking to get involved in the cannabis industry. Most often, this aid takes the form of prioritized license applications, subsidized license fees, and low interest business loans, but some also provide additional services such as professional mentoring or accounting assistance. 

The rising prevalence of these programs 

While Illinois is the first state to implement such a program alongside its legalization bill, social equity programs are becoming increasingly common in other parts of the nation.

As of the end of 2018, four cities in California have independently established their own social equity programs: Los Angeles, Oakland, Sacramento, and San Francisco. These cities offer support through their equity programs in the form of technical assistance and reduced rent or license fee payments. They also all offer a route to the expungement of past cannabis-related offenses on an individual’s criminal record.

Also in 2018, Californian Governor Jerry Brown has also signed off on the California Cannabis Equity Act, which offers financial and technical assistance to eligible small cannabis businesses in the state. In total, state lawmakers have allocated $10 million of initial funding to go towards implementing the aims of the Equity Act and providing additional support to the four pre-existing social equity programs. 

Massachusetts has also put in place a number of equity provisions. For a limited time after legalization was announced, the state’s Cannabis Control Commission operated an Economic Empowerment Priority Review program for applicants who could demonstrate that their business was based in, majority owned, and/or operated by people who have lived in identified “areas of disproportionate impact” within the state. The program offered to prioritize the review and decisions process for license applications from these eligible businesses to ensure “economic empowerment in communities disproportionately impacted” by prohibition. 

While this review program is now closed, the state still operated a social equity program which offers training and technical assistance, including business plan development and industry best practice education, to eligible applicants and licensees in order to reduce the barriers to entry in the state cannabis industry.

Inside Illinois’ equity program

Illinois’ new cannabis equity program, like those above, also supports business owners, employees, and licensees that have been directly impacted by cannabis prohibition, whether this is by themselves having a previous cannabis conviction, or through having ties to a community or area that has been disproportionately impacted by poverty and/or cannabis prohibition enforcement.

Social equity applicants will be given additional points boost in Illinois’ points-based business license application scoring system. A Cannabis Business Development Fund worth an initial $12 million has also been established by the state in order to provide social equity applicants with low-interest business loans. This fund is anticipated to grow to almost $30 million once additional early fees are transferred into the fund. 

Additionally, the state has set up a “Restore, Reinvest, and Renew Program,” also known as the 3R Program. The program will take a quarter of the total tax revenue raised from the sales of legal cannabis in the state and reinvest it directly into disadvantaged communities through the funding of local community groups and initiatives. 

A vision for the future

When California brought in its Cannabis Equity Act, its author Sen. Steven Bradford made a statement saying that “if people of color with financial capital and high business acumen are having difficulty gaining licenses, one can only imagine the struggles individuals with zero capital and previous convictions are faced with. Although California isn’t the first state to legalize the adult use and sale of cannabis, we can be the first state to do it right – by including those who were once punished but can now contribute.”

However, despite the best intentions of those who run and who advocate for these initiatives, some social equity programs are facing big challenges. Much of the discontent in California stems from problems with funding and staffing, and the long waits for licenses that some qualifying applicants experience.

“I don’t think we’ve passed the point where the social equity program can’t satisfy its intent,” said Donnie Anderson, co-founder of the California Minority Alliance, to Green Entrepreneur. Others who spoke to the news outlet were less optimistic, with Felicia Carbajal, an activist with California Cannabis Advocates saying she had “heard some social equity applicants who are like, ‘This is just a joke’.” 

While increases in funding and staffing could go a long way to fixing these flawed state and local initiatives, some are already looking towards a bigger picture, and towards federal legalization. 

Most recently, Representative Ilhan Omar has said that the federal legalization of cannabis must happen in order to ensure social equity and to end the disproportionately enforced prohibition in communities of color. 

“It’s important for us to [legalize cannabis] federally and not allow for the states to pick and choose, because what happens is you will have a state where someone is publicly and professionally able to profit, and in the next state someone could be sentenced to life for it,” said the congresswoman, in an interview with BET. “We want to make sure that there is equality in our laws. I don’t think it’s just for that kind of economy that exists within this policy [of conflicting state marijuana laws].”

Rep. Omar also went further, pointing out that pure legalization alone would not be enough to ensure equity, and so tandem efforts need to be made to center those from historically disadvantaged communities in the legal market.

“You have to have the capital to be able to start the business, to understand where to even begin,” she said. “But also many licenses for businesses are tied to your criminal record. And so there are a lot of things we have to make sure we’re taking care of so that we are setting the black and brown community to be in equal footing when that happens.”

Alexander Beadle

Science Writer

Alexander Beadle has been working as a freelance science writer since 2017 and has covered the cannabis industry for Analytical Cannabis since 2018. He has also written for our sister publication, Technology Networks, and the cannabis industry consultant firm Prohibition Partners, among others. Alexander holds a Master's in Materials Chemistry from the University of St. Andrews, where he won a Chemistry Purdie scholarship, and conducted research into zeolite crystal growth mechanisms and the action of single-molecule transistors.


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