“Social Equity should not be simply a false slogan for politically connected, well-capitalized and opportunistic opportunists who want to distort or exploit new marijuana markets.”
By Geoffrey Lawrence & Khurshid Khoja of the Reason Foundation and Greenbridge Corporate Counsel
Ohio voters recently approved the recreational use by adults of marijuana. Florida, Hawaii New Hampshire Pennsylvania and Wisconsin could soon join the 24 states that have legalized marijuana for recreational use. The metaphorical genie will not be put back into the bottle because drug prohibition has led to violence and destroyed many lives.
Social equity programs are becoming more common in the marijuana legalization movement as a result of the bipartisan consensus that cannabis should become legal, and that the failed war against drugs has imprisoned too many Americans. Social equity programs aim to provide restorative justice for those who have been imprisoned, or otherwise affected by the enforcement of drug prohibition policy. Ohio is now the 17th state with a statewide program for social equity.
Social equity programs are implemented in most states and cities. This includes California, New York City, Arizona, Michigan and New York City. They reserve a portion of the available cannabis business licences for those who meet the legal definitions of “qualified social equity applicants.” While these definitions differ, no jurisdiction defines them as only individuals who have been arrested or incarcerated on marijuana-related charges.
Individuals are more likely to qualify for a license that allows them to enter the cannabis industry legally if they live in an area with disproportionately high rates of arrest or a low income. Those who have not been directly affected by drug wars can often access the same benefits as those who are. Many times, corporate interests have employed or partnered individuals who meet the social equity criteria in order to act as mere figuresheads (often without their knowledge) on license applications.
An study on applications submitted to Arizona’s exclusive licensing round for social equity applicants revealed that at least 58 per cent of the applications had ties with large cannabis corporations. Contracts have also been revealed that show businesses luring individuals to become applicants by paying modest amounts upon receiving a licence, but denying them any rights to the business’ earnings or control.
Second, as part of their social equity initiatives, states and cities will divert a portion of the marijuana tax revenues to grant money to community-based groups that offer job training, or have more vague goals, such as “addressing the causes of violence.”
This money does not reach the victims of bad policies over decades, no matter how good restorative justice may be. The laws that govern these grants do not usually impose auditing requirements on recipients. They do not impose any performance metrics that recipient organizations must meet to demonstrate their competence. The officers and directors can absorb the grant money as salary.
If advocates of criminal justice reform are determined to include social equity programs in marijuana legalization laws then those programs must be redesigned.
First, the government should make it easier for cannabis entrepreneurs who want to move from an illicit market to a regulated one. The acquisition and maintenance of business licenses, which can cost millions of dollars, cannot promote social equity.
Second, all benefits intended to compensate victims of the drug war should be provided directly to them. We shouldn’t create a way for non-victims of the drug war to receive this assistance.
We believe that compensation can be provided to victims without adding additional burdens to unrelated parties. Tax credits could be offered to marijuana companies who agree to deposit equity into a fiduciary fund for these victims. The stock portfolio that is accumulated in this publicly administered trust fund would eventually receive capital gains or earnings distributions from which they could then make regular distributions to the drug war victims.
It would be in their best interest to reduce their tax bill and improve cash flow immediately. This approach is sensible because cannabis taxes can be excessive.
We do not believe that it is prudent to assess tax to fund restorative justice. Taxpayers who were not involved in the drug war should not be penalized for the way the government applied drug laws. Excise taxes are seen as social equity measures, but they make legal marijuana products less competitive with their illicit counterparts.
Individuals who suffered the gravest injuries directly as a result of cannabis criminalization–having their freedom stripped, their families shattered, their lives stunted and their economic opportunities blunted–are still owed true restorative justice.
Social equity is not a mantra that opportunists with political connections and capital can use to manipulate new marijuana markets, or take advantage of the public purse. There is enough evidence to show that the drug war has been designed and implemented in a discriminatory manner. However, efforts towards restorative justice shouldn’t enable corruption or create new injustices.
Geoffrey Lawrence works as the research director for Reason Foundation. Khurshid Khoja, founder and CEO at Greenbridge Corporate Counsel as well as chair emeritus for the National Cannabis Industry Association is Khurshid Khoja.
NORML report shows that over 2.3 million marijuana records have been expunged by states since 2018.
Photo by Chris Wallis // Side Pocket Images.
The article Marijuana Social Equity programs Should be Redesigned to Directly Support People Hurt by Criminalization (OpEd) first appeared on Marijuana Moment.
