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Despite being disproportionately impacted by the War on Drugs, Black people only make up single-digit ownership of the nation’s legalized cannabis market.
After New Jersey legalized cannabis, all eyes were on the state as it implemented equity measures not seen before in previous regulation in other states.
The state’s Cannabis Regulatory Commission is scheduled to release regulations Thursday ahead of an Aug. 21 deadline established by law earlier this year. Those rules and regulations are expected to lay the groundwork for what equity could look like in the Garden State’s projected $1.5 billion cannabis space.
In a white paper released in June by Leafly, a leading cannabis consumer news platform, estimated 2% of businesses among the nearly 30,000 nationwide are Black-owned. It ranked New Jersey No. 5 on a list that included the 19 states that had legalized cannabis for adult use.
“There are inequalities in the United States and those are reflected in a lot of different microcosms,” said Janessa Bailey, a culture editor at Leafly. “I would think it would be presumptuous to assume that the cannabis industry wasn’t also going to suffer from those same disparities — and then you put on additional layers like criminalization and healthcare.”
During Bailey’s research, the established benchmarks were based on expungement, licensing, medical access, equity investing, homegrow, data collection, education and career pipelines. Data collection, consumer education resources, career development and prohibiting people from growing their own cannabis were things that counted against it in the rankings.
The rankings however do not define end-all-be-all best practices so much as where things currently stand on what policies need to be advanced in order to make the market truly equitable, Bailey said.
Evaluating social equity effectiveness will require states to keep more detailed info whether their measures are actually working.
Those types of measurements will also require healthcare metrics for communities.
Macro-level impact measures will be key, said Leafly CEO Yoko Miyashita.
“We should be able to measure increase in wealth for Black and people of color communities, we should be able to measure, to some of the points on intersectionality, increased health metrics for these communities,” she said. “That’s the level of ambition we have because the potential is so huge if we do this right.”
John Bailey, no relation to Janessa, is a convenor of the Black Cannabis Equity Initiative (BCEI) and has been holding multiple panels throughout the state of New Jersey, most recently during an August panel in Princeton, where he has family. He believes the companies that claim they are for social equity also need a scorecard.
At his seminars, John Bailey has repeatedly noted how in the wake of the 2020 protests many companies released statements supporting social equity while failing to follow through on actions that required economic investment and increased transparency.
The underground market, referred to in the cannabis space as the legacy market — is majority Black and brown. The legalized cannabis market and the wealth it generates is majority white. A report card that separates which companies are about equity is tantamount, John Bailey said.
The report card uses measures such as Black participation on boards of directors, equity in ownership groups, employment, vendor relationships, media placement and community investment.
To think that a majority-white revenue stream would cede control to a majority of minorities without accountability mechanisms in place is naive, John Bailey said.
“That’s where the report card and all of those things come into play,” he said.
Including the legacy market is a necessity in terms of equity and economic ethics, said Edmund DeVeaux, president of the New Jersey CannaBusiness Association, at a recent NJ Cannabis Insider-sponsored panel for the New Jersey Certified Public Accountants Association Cannabis Conference earlier this month.
“There’s no such thing as perfect policy. But we do have to somehow make sure that people who were the backbone [of the legacy market] — even though it was an illicit market, even though it was an unregulated market — you can’t neglect them,” he said.
For legalized cannabis to become the most profitable to the population the War on Drugs was the least harmful to is unfair for the New York metropolitan area and the rest of the market as a whole, said Vicente Sederberg cannabis attorney Jennifer Cabrera at the conference.
“That’s not fair for the entrepreneurial young Black, Hispanic men and others, who were on the streets actually doing this job and for legacy growers who were risking — and they were doing something illegal, but does that mean they should be excluded from the industry? That just doesn’t seem right.”
Equity, legacy markets and better data will also have to come at the intersection of interstate commerce.
Under the current inequities in the system, many cannabis advocates and lawyers have warned that those inequalities could metastasize should commerce happen under the existing status quo.
Avoiding a market dominated by businesses who take advantage of high barriers to entry and politicking was the focus of policy recommendations by the Cannabis Regulators of Color Coalition (CRCC) vice chair Shaleen Title, a former Massachusetts state cannabis commissioner.
“The process of opening interstate cannabis trade needs to be done thoughtfully and deliberately in order to prevent Big Tobacco and other profit-driven companies from dominating the market,” Title said when she released her report in June. “To do that, we need to avoid opening the floodgates to interstate commerce all at once.”
Many of the recommendations centered around incrementally creating a national cannabis marketplace where priority licensing and capital for small business and minority companies would be foundational.
Approaches included making sure there were anti-consolidation efforts laced throughout the regulation and that cannabis be viewed through more of a civil rights framework.
“We consider regulation of the cannabis industry to be a civil rights and racial and economic justice concern,” the report noted. “Therefore, instead of placing permitting authority under the Secretary of the Treasury, the sections and authority regarding permitting would be moved to the independent Office of Cannabis Justice, housed within the Justice Department as part of a comprehensive and unified regulatory structure centered on equity and justice.”
“We need to implement those measures before we throw open the doors to interstate cannabis trade,” said Dasheeda Dawson, CRCC co-founder in the wake of Title’s recommendations. “If we don’t, by the time small businesses are up and running, massive multinational companies will already control the market.”
For Janessa Bailey, her conclusion, and that of many who see needed improvements, boiled down to a blunt assessment.
“The longer we wait, the longer people are still getting hurt,” she said.
Jelani Gibson may be reached at email@example.com Follow him on Twitter @jelanigibson1.
NJ Cannabis Insider is a weekly subscriber-based trade journal and events group produced by NJ Advance Media an Advance Local company, which also publishes NJ.com, The Star-Ledger and other affiliated papers. For more information, email staff here.