Minority Cannabis Business Association report outlines social equity and cannabis laws for advocates

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Founded in 2015, the Minority Cannabis Business Association (MCBA) is the premier national trade association dedicated to empowering and supporting minority entrepreneurs and their communities by creating a fair and sustainable cannabis industry.

The MCBA recently unveiled its National Cannabis Equity Reportwhich presents the first results of its national cannabis equity map – a dynamic digital tool for advocates and legislators seeking information on state and municipal social equity programs and cannabis laws that impact social equity program outcomes.

The equity card

The report describes the Equity Map as “a research tool that collects and stores data essential for understanding and analyzing cannabis equity policy. It includes citations to the law to facilitate research and the Comparative Study of Cannabis Laws”.

The original map was a digital tool to collect and track information on national and local cannabis equity programs, although throughout the research and analysis process it became apparent that in order to achieve its goal , the data needed to extend beyond existing equity programs. MCBA has expanded the Equity Map to include additional laws that could affect the outcomes of social equity programs, as well as barriers to entry for small minority operators in markets without social equity programs.

The resulting map includes data regarding (1) key features of social equity programs, (2) other equity and restorative justice provisions, and (3) other industry provisions. affecting fair outcomes in the cannabis industry. The latter two include data from states with and without formal social equity programs.

Social equity issues highlighted

The report highlights findings from 40 policy issues explored in the map. Among the issues highlighted, the MCBA found that the number and effectiveness of state social equity programs do not reflect the expressed commitment to achieving equity through cannabis. While cannabis has been legalized for medical or adult use in 36 states, only 15 states have social equity programs.

“Of the 15 state social equity programs, none has resulted in an equitable cannabis industry across all four pillars of equity (industry, justice, community, and access),” the report states.

The report also noted that many states continue to use state-level licensing caps to limit state markets, resulting in a lack of diversity and the proliferation of the legacy market. For example, the report shows that of 36 states where cannabis is legal, 26 have state-level licensing caps. The organization explained that limiting the number of licenses inflates the value of the license due to limited competition without providing access or incentive to transition to the legal market.
“Despite arguments of overcrowding in low-income neighborhoods, state-level licensing caps do not decrease the density or over-concentration of retail outlets, especially in low-income neighborhoods. Conversely, strong competition for limited licenses leads to lawsuits that delay the implementation of social equity programs and increase costs for potential licensees,” MCBA explains in the report. “State medical programs include significant homeownership and employment barriers that span the medical market to the adult use market, as well as significant benefits for medical operators seeking adult use licenses, including automatic co-location of an adult use license with a physician licenses, early market access and land use exemptions that create inequities on state markets for adult cannabis.

The report highlighted that socio-economic structural disparity prevents minorities from participating in the market while social equity applicants often lack adequate financial resources to support the application and start-up processes. In addition, requirements to secure premises prior to issuance of a license or conditional license continue to present a significant barrier to entry for social equity operators.

Photo by Lelen Ruete.

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