Michigan cannabis regulators rolled out a groundbreaking list of social equity proposals last January, but since then a few more complicated solutions have been abandoned, according to the agency and members of an agency workgroup.
A report issued in July by the Michigan Marijuana Regulatory Agency’s Racial Equity Advisory Workgroup detailed some programs that have been cut loose, like a marketplace for cannabis licenses, while others that have moved forward, like a new microbusiness license.
Michigan, which has few non-white cannabis license holders, also has a provision in the state constitution barring racial-preferences when awarding any state contracts or licenses. The provision, added in a 2006 ballot initiative, was upheld by the U.S. Supreme Court in 2012. According to information highlighted in the MRA Racial Equity Advisory Workgroup – Final Recommendations, 3.8% of cannabis license owners are Black and only 1.5% are Latino.
Formed in July 2020, the MRA’s Racial Equity Advisory Workgroup proposed 16 ideas, many of which reached far beyond racial equity, such as promoting cannabis medical research, providing municipal leaders education on the impact of legalizing cannabis in their communities, and creating a certification program for cannabis workers.
“We have been busy trying to implement as many of the suggestions as we possibly can,” said Jocelyn Thomas, an MRA social equity representative. More updates will be coming, said Thomas, since the agency is working to obtain legislative approval for some of the proposals.
Chris Jackson, part owner and general manager of “Sticky Ypsi” dispensary in Ypsilanti, Michigan and a Social Equity Advisory Workgroup member, told Grown In that some proposals are moving along quicker than others.
“Not every state has a social equity program,” Jackson said. “To take it a step further, [MRA] Director [Andrew] Brisbo recognized that the program had not accomplished what it was supposed to accomplish and so, kudos to him for taking a step back and saying, ‘What can we do to improve it?’ and then ask actual stakeholders their perspective in order to formulate what would be the plan for the MRA moving forward.’”
As a member of the workgroup, Jackson feels positive about the proposals coming to fruition.
Creation of a new license type, a Class A microbusiness that combines attributes of the existing microbusiness license, is among the proposals that are moving forward.
“It was specifically related to a quick, rules change that could be done at the MRA level,” Jackson said.
Additionally, the Joint Venture Pathway Program (JVPP), a proposal meant to facilitate communication between qualified social equity candidates, adult-use licensees, and prospective adult-use licensees for the purpose of potential joint business ventures, employment, incubator programs, and mentoring opportunities has also moved along. A survey sent to 1,498 qualifying social equity participants to gauge interest in JVPP garnered 271 responses.
“The thought is that it’s a start and it continues to evolve,” Jackson said of the program.
While some of the proposals are moving along quicker than others due to ease of process, others require legislation, and some won’t be pursued any further due to regulatory challenges.
Another proposal, The Michigan Marijuana Market, a market for Michigan residents to sell and purchase shares in Michigan cannabis companies to crowdfund projects through community members, is no longer being pursued.
Although the concept had support, the Workgroup decided against pursuing it further, describing it as good in principle, but incompatible with existing federal exemptions for exchanges.
Moudou Baqui, a spokesperson for Decriminalize Nature in Detroit criticized eliminating the marijuana market proposal as problematic. He added that finding alternative access to capital should be a priority.
“One of the biggest barriers is the financial barrier,” Baqui said. “If you take that away, having a social equity program is like a hollow promise.”
A proposed 1.5% Intra-Licensee Transaction Tax to fund local social equity programs and municipal infrastructure projects and a reinstated 3% medical cannabis excise tax, also to redirect funding to local governments, is no longer being considered, since it “would increase the cost to Michigan’s medical marijuana patients,” according to MRA.
Another proposal, to create a Social Equity Presentation Tour requires the MRA to create more time slots for individuals to attend social equity presentations and bilingual content. In the past, according to MRA, the agency provided various dates, times, and locations for the social equity education and outreach sessions but the in-person sessions, however, were not the most efficient way to impact community engagement since few people attended, according to language in the July update.
With COVID-19 restrictions in place, the social equity team utilized virtual platforms to expand their outreach efforts. Participation numbers and community feedback from the virtual sessions exceeded in-person session participation numbers and feedback, according to proposal updates.