Hopeful cannabis license applicants attend an Illinois briefing in December 2019. Credit: Mike Fourcher / Grown In

A new report from The Minority Cannabis Business Association claims a disconnect between states’ social equity goals and how licenses are awarded.

“While it’s encouraging to see states have made progress in adopting social equity programs since cannabis was first legalized for medical use,” said Michelle Bodian, counsel for Vicente Sederberg’s Boston and New York offices. “It’s disappointing that implementation of these programs has not yielded more diversity in the industry.”

The goal of the report, Bodian says, is for states to see hard data in black and white, showing the underrepresentation in social equity candidates obtaining licenses and help them reflect on what is working and what’s not.

“No state has gotten the system right,” Bodian says. “This makes it easier to compare each state to each other. It does seem like each state is learning from the prior state. New Jersey, New York and Connecticut have robust social equity compared to other states. I’m encouraged. Maybe states are learning.”

Pennsylvania is highlighted in the report positively, as a state that reserves points in its application process for a medical business license applicant’s diversity plan. The state is also lauded for its outreach and application materials that are tailored to diverse groups.

Maryland did not earn the same grade. The report details that although the state requires social equity in its medical license applicants, out of it’s first 15 grower licensees, none were awarded to Black-owned businesses.

One in three residents in the state of Maryland is Black.

Currently in the state, per the report, only four of the 26 companies with grow licenses are owned by women or persons of color.

“There’s more that we can do,” said Antonio Valdez, co-founder of the National Hispanic Cannabis Council. “We just launched as an organization last March, but we have done our own research as to how we can better support and drive more Latinos to the industry.

“Not just for careers, but for people who want to have skin in the game and be a part of the cannabis economy. There’s only so many licenses. That’s why we need to have an influence on decision makers in politics, to get more minorities at the table.”

The report paints a positive picture of New York, showing its fee reductions and waivers provided for social equity applicants, as well as the efforts to provide funding beyond such discounts.

The data provided does continue to harp on the one main theme surrounding social equity candidates. How, without funding, will social equity applicants be able to afford the cost of the application process and future requirements set by each state?

“Some states include an income threshold,” said Bodian. “They want you to prove you don’t have the money, but then you have to have the money to move forward. There are definitely predatory lenders out there, sharks in the water, that are looking to prop up a social equity candidate.

“But there’s good investors too. I think, collectively, the industry sees this as an issue, but there hasn’t been a solution to it. If New York hits on it, they sound like they’re going to do build outs and then rent to social equity applicants. … When one state hits on a winning combination, we hope other states follow their lead.”

Bodian and her firm have done pro bono work to help support the social equity cause. Valdez wants to educate the hispanic community on the economic aspects of cannabis to help empower and support participation in the industry. Neither have connection to the MCBA report, both just a vested interest in the future of social equity in regards to the cannabis market.

“One of the things we are really working on is how do we get funding to create these opportunities,” said Valdez. “And once they have that funding, how do they get the skills to be better business owners?”

Said Bodian, “I just want to be able to help social equity applicants.”

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Rob Edwards

Rob Edwards is currently the Mid-Atlantic Regional Reporter for Grown In, reporting on the cannabis industry. He was previously a content producer/reporter for NJ Advance Media and a former beat writer...