The first states to legalize cannabis, Colorado and Washington, didn’t give a great deal of thought to social equity – the idea that those most harmed by the War on Drugs should benefit most from a legal industry – when developing their frameworks for a legal marijuana market and determining how to allocate and reinvest cannabis tax revenues. It took until this year for each state to pass legislation to introduce social equity in the marijuana industry.

Almost 8 years after Colorado and Washington legalized marijuana, the consequences of this oversight are clear. Washington’s Commission on African American Affairs estimates only 1 percent of marijuana business licenses are in the hands of black people. This gross under-representation is partly explained by the cruel fact that prior convictions for cannabis offenses in Washington can exclude a person from applying for a marijuana business license.

This is especially problematic when you consider two things; that before marijuana was legalized, black people in Washington were nearly 3 times more likely to be arrested for possession than white people; and that the state only passed legislation to facilitate the expungement of cannabis-related convictions last year. From the outset, black people have been at a structural disadvantage when it comes to participating in Washington’s legal marijuana industry. And that’s without even considering economic disadvantages.

The story is much the same in Colorado. There’s no statewide data on the racial backgrounds of cannabis business owners and stakeholders but recent research into Denver’s marijuana industry revealed 74.6 percent of business owners are white while only 5.6 percent are black. Like Washington, Colorado has persisting racial disparities in marijuana arrest rates post-legalization. Like Washington, individuals with marijuana-related convictions were excluded from the legal industry until very recently. Earlier this month Gov. Jared Polis signed a bill into law to expedite the pardon process and allow individuals with marijuana-related convictions to apply for a cannabis business license.

Nationwide data, courtesy of Marijuana Business Daily, on the racial backgrounds of marijuana business owners and shareholders paint a similar picture; 81 percent are run by white people, with only 19 percent in the hands of people of color (POC). Of this figure, black people constitute 4.3 percent.

The experiences of Colorado and Washington show marijuana legalization is not, in itself, a solution to problems of racial injustice. Indeed, some cannabis reform advocates in Florida and in New Jersey have opposed marijuana legalization proposals on the basis that the provisions would entrench racial inequalities by excluding disadvantaged black communities and creating another industry monopoly headed up by white people.

Recent efforts at state level to craft marijuana reform legislation often attempt to incorporate social equity goals but all too often the rhetoric does not match with reality. Massachusetts’ Cannabis Control Commission established a program to encourage the participation of people “from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement.” So far, after two years of legal marijuana sales and 79 operating businesses, not one social equity applicant has received a marijuana business license.

Illinois, the most recent state to legalize cannabis, was lauded for the social equity provisions in its adult-use marijuana legislation. This included automatic expungement of all non-violent cannabis offenses and its Restore, Reinvest and Renew (R3) program which ensures that 25 percent of marijuana sales tax revenues are allocated towards social projects and services in disadvantaged communities.

At the same time though, Illinois suffers from even worse racial disparities in marijuana business ownership than Massachusetts, Washington and Colorado; not one operational pot shop in Illinois is owned by a black person. This is because the first batch of marijuana business licenses were reserved for preexisting medical cannabis dispensaries which are all, more or less, owned by white men. This was supposed to be remedied six months later by the second batch of 75 licenses earmarked for social equity applicants but Gov. JB Pritzker postponed the plan because of the COVID-19 pandemic. Whether Illinois makes good on its social equity promise, therefore, remains to be seen.

That said, California illustrates the difficulty in determining the success or failure of state level attempts to promote social equity in an emerging industry for a substance that has historically been weaponized against minority communities. The residents of some cities, such as Oakland, report generous social equity provisions which have aided their participation in the legal marijuana industry, while in LA the whole program is set for an overhaul after a series of failures and complaints.

To help state officials and lawmakers promote social equity within marijuana markets, the National Association of Cannabis Businesses (NACB) recently announced it is working on social equity recommendations based on the experiences of states that have legalized marijuana so far. One takeaway from these experiences, as understood by the NACB, is that advancing the interests of those most harmed by the war on drugs requires a comprehensive approach, not single policy goals. This means, at a minimum, ensuring social equity applicants for marijuana business licenses are equipped to deal with the bureaucracy involved, they have access to the necessary capital and they are not impeded by criminal records for offenses which are no longer illegal.

Still, a question remains as to whether state and local governments are even equipped to meaningfully help small businesses owned by people of color whilst funneling much of the tax proceeds to disadvantaged communities when considered against the financial interests of large marijuana industry players. To counteract the power of these companies in the interests of social equity would likely require the assistance of the federal government. But with Donald Trump currently occupying the White House and his presumptive challenger for the presidency, Joe Biden, still opposed to marijuna legalization, the chances of that happening any time soon aren’t looking great.

Marijuana legalization is no guarantee of social equity; lawmakers must ensure those harmed by the War on Drugs will benefit from a legal industry

state marijuana laws