MCBA Releases 2022 National Cannabis Equity Report
By Lauren Mendelsohn
February 11, 2022
You might have seen the latest episode of South Park (Season 25, Episode 2, “The Big Fix”), which touched on social equity in the cannabis industry. All joking aside, this is a serious and important topic. The War on Drugs has disproportionately impacted certain communities, in particular people of color. As jurisdictions legalize cannabis and craft rules to govern the industry, it is important to take this history into account and make sure that opportunities in this space are available and easily accessible to those who suffered most from prohibition.
One way this can be accomplished is via “social equity programs” (sometimes simply referred to as “equity programs”), which are designed to encourage and support participation in the legal cannabis industry from such disproportionately harmed individuals and communities by offering advantages such as priority licensing; waiver or reduction of licensing fees, taxes, and/or other regulatory costs; technical assistance; direct grant funding; and other benefits.
Unfortunately, there is still much work to be done in this area. Some states are doing better than others when it comes to creating social equity programs that work, but many states have no such program at all. An exciting development in this area came recently from New York, which announced the creation of a $200 million public-private fund to help equity applicants in the Empire State.
Here in California, while there is a state law regarding cannabis equity programs, the programs themselves (with the exception of the DCC’s fee waiver program) are administered at the local level, and only a handful of the State’s 58 counties and 482 municipalities have cannabis equity programs – resulting in many people who would be eligible for such programs unable to access the resources. Thus, if one’s business isn’t located in a jurisdiction where such a program exists, they can’t take advantage of the benefits that it would provide, which could include things like local fee reductions and waivers, technical assistance with applications and business operations, priority processing, and more. Furthermore, California makes jurisdictions compete for equity funding by submitting grant applications stating what they will do with the money, inevitably leaving equity operators from jurisdictions whose grant applications didn’t score high enough without resources due to no fault of their own. The latest round of such grants was recently announced.
This week, the Minority Cannabis Business Association (MCBA) published their “2022 National Cannabis Equity Report” as well as a map and other online resources related to equity. Some of the main challenges identified by MCBA in the report include (but are not limited to) license caps, the high cost of real estate in an industry where a location typically must be secured before submitting an application, limited availability of direct-grant funding for equity operators, proof of capital requirements, and bans on individuals with past drug-related convictions from being involved with a cannabis business. This report and similar data demonstrate the importance of social equity programs, and provide a roadmap to policymakers looking to ensure such programs are effective.
This information is provided as a public educational service and is not intended as legal advice. For specific questions regarding cannabis equity programs, contact the Law Offices of Omar Figueroa at 707-829-0215 or info@omarfigueroa.com to schedule a confidential legal consultation.