As cannabis emerges from the shadows of its illicit past, the socio-economic inequality created by decades of the “War on Drugs” stands in stark contrast to the substantial wealth being created by cannabis legalization.
While no other business has been as disruptive as cannabis in terms of breaking social norms, it still struggles with along history of social injustice in marginalized communities.
There is no question that the new cannabis economy has made major progress in terms of opening up the social justice dialogue, but in too many instances, actual social equity initiatives have been muddled by politics, inertia, and allegations of gaming by business interests.
Cannabis companies and regulators have an opportunity to permanently ingrain social justice into the DNA of this industry in ways that go beyond just lip service.
To date, no social equity program has gotten it quite right. In California, the largest and oldest legal cannabis market in the world, the Los Angeles Social Equity Program was recently assessed by the Minority Cannabis Business Association (MCBA) and given disappointingly low scores.
The MCBA found that many program applicants had been exploited for their equity by shareholders, the program did not promote the long-term success of new business owners, and some local government officials and city council members had used the social equity program to promote their personal agendas.
The MCBA cited similar findings in San Francisco, Oakland, and Sacramento.
The picture is not very different elsewhere in the country. In Illinois, on the eve of launching its adult use program, lawmakers there have received criticism that the state’s social equity program for medical cannabis has been dominated by a small group of powerful companies run by white men and backed by wealthy investors, raising concerns that the same will happen when adult-use licenses are awarded.
New Jersey and Maine continue to struggle with conflicting legislative political agendas as they work through the social justice implications of adult-use cannabis law in their respective states. New York failed to pass comprehensive cannabis reform and adequately address the legacy harm done to mostly black and Latino communities from marijuana enforcement.
The legalization of cannabis is not an event. It is a process, and a messy one at that. No industry in history has attempted to codify social justice into its regulations. No other industry has made righting the wrongs of the past a precondition of doing business. This is a bold experiment, and one that will fail unless we fully embrace the idea even as we fumble through the implementation.
The issue is too complex and solutions must fit the unique circumstances of each community, but one constant we must not forget is that it all starts with a successful business. A failed business helps no one.
Generally speaking, too many social equity programs today focus mostly on who gets a license and very little on how those licenses will generate economic vitality in the targeted communities. We must ensure that social equity licenses are backed by proper resources and partners to succeed.
For our part, the industry must recognize that social justice is not the cost of doing business in the new cannabis economy; it is the only way of doing business in the cannabis economy. It is as essential as sustainability and profitability.
Brian Mitchell is co-founder and chief executive officer of Shryne Group Inc., a Los Angeles-based cannabis holding company with a fully vertically integrated asset and license portfolio covering the breadth of California, the largest legal cannabis market in the world.
He has been a seasoned entrepreneur and real estate investor since 2003, when he was still studying at UC Davis. His deep knowledge of cannabis real estate and licensing combined with his diverse experience and passion for bringing talent together position him as a leader within the Shryne Group family and in the burgeoning California cannabis industry at large.
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