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Back in 2019, many marijuana industry experts trumpeted Illinois as setting a new bar for social equity: State lawmakers created a potential blueprint to provide greater opportunities for minority entrepreneurs in Illinois’ new recreational cannabis industry.
But three years later, the social equity program is still struggling to get off the ground, in part because of lawsuits and the COVID-19 pandemic.
Increasingly, a group of larger companies known as multistate operators, or MSOs, dominate the industry. While still small compared with, say, liquor companies, the largest MSOs have dozens of stores and hundreds of millions in annual revenue. Leading MSOs such as Curaleaf, Cresco Labs, and Columbia Care have raised money by going public in Canada.
Sales of highly taxed marijuana that have topped $1 billion are popular in a state with a $3.9 billion budget deficit. But other states are watching Illinois’ experiment that promised to ensure people of color could reap revenue in a rapidly growing, multi-billion dollar industry.”
That’s not happening.
A bill legalizing marijuana in New Jersey could soon be puff, puff, passed after the state legislature and Gov. Phil Murphy came to an agreement late Friday.
The governor announced a deal had been reached on Twitter, saying that a framework for the legalization was in place. He went on to say that making marijuana legal in the state is a "critical step in reducing racial disparities and social inequities that have long plagues our criminal justice system."
What’s in (and not in) A-21/S-21?
“[The bill] has been introduced as the most progressive cannabis legislation in the country yet it falls short of substantive social equity provisions seen in other states,” said Jessica Gonzalez, General Counsel for Minorities for Medical Marijuana (M4MM), in an email to Cannabis Business Times and Cannabis Dispensary.
Why the cannabis industry needs social equity programs
Throughout the war on drugs era, the heavy-handed enforcement of marijuana prohibition resulted in the lopsided criminalization of people of color.
Despite a near equal propensity between whites and people of color for possessing marijuana, police have historically targeted Black and Latino communities when doling out criminal repercussions.
In a series of recommendations to the Los Angeles City Council, L.A.’s Department of Cannabis Regulation proposed an immense overhaul of its marijuana business licensing structure and social equity program.
The DCR’s proposals are set to be taken up Tuesday by a City Council committee.
The recommendations, if adopted, could be far-reaching for many marijuana entrepreneurs hoping to win a city business license. The recommendations were both hailed and derided by industry officials after their release.
Of the 18 states that legalized medical or recreational cannabis sales since 2016, six have taken considerable measures to boost diversity in their marijuana programs.
While that doesn’t represent a majority of markets, those that have implemented significant social equity programs are projected to grow much larger than those without.
