The Critical Importance Of Social Equity In The Cannabis Industry

This article by Robert Hoban was originally published on Forbes and appears here with permission.

What happens when a movement becomes an industry? That’s precisely what’s playing out every day in the commercial regulated cannabis market. It’s important to consider how the cannabis industry has a more profound burden and responsibility to social equity than other industries.

It’s no secret that the prohibition of cannabis disproportionately and adversely impacted people of color. To counter this, many states and cities have implemented social equity programs in connection with the legalization of medical or adult-use cannabis. Social equity deals with justice and fairness within social policy. These programs attempt to ensure that people of color, and those with marijuana offenses prior to legalization, be afforded an opportunity to participate, meaningfully, in this burgeoning industry.

The first regulated cannabis states, including Colorado, have only recently taken action on this front. Their programs have had limited success, and as an industry, we’re looking for ways to craft better public policy by surveying the results in other jurisdictions, both nationally and globally. Many problems remain with the implementation of these programs.

Take the requirement in most early legal marijuana states that commercial cannabis growers get “married” to cannabis retailers. It’s often said that “plant people” (growers) and “people people” (sellers) do not mix. This led to tremendous disagreements and lawsuits. California’s marijuana social equity program have shown similar traits, including the “use” of people of color to obtain a license, but then have no meaningful participation. This is fertile ground for corruption and unequal treatment of individuals. Can it work? Only time will tell.   

The demand for social equity is currently very high in the industry and has been heightened by recent events: the mobilization of the Black Lives Matter movement, nationwide protests against police brutality, and the like. Numerous large cannabis companies are now talking about “reinvesting in communities” and “social equity,” but it remains to be seen whether they will put their money where their mouth is.   

Despite living in one of the less diverse places in the United States, the Hoban Law Group implemented social equity programs in cannabis before they were popular — by offering minority-owned businesses opportunities, advancing minority employees, and sharing stage time with less-advantaged people of color as I spoke around the world.

We recognize that we must do more. We created an Diversity and Inclusion Committee dedicated to advocating for Black, People of Color and LGBTQ employment candidates, clients, and employees. The intention of this committee is to challenge us and help us address the injustices each of us witnesses every day. Our entire staff will receive unconscious bias training for our entire staff, managers, and executive team. The submitted candidate pool for posted openings at HLG has been far less than diverse. While we can’t control that fact directly, we can (and will) take steps to ensure that we post job opportunities in a greater variety of forums to draw a wider pool of candidates.  

In addition, HLG will contribute to the American Bar Association (ABA) Legal Opportunity Scholarship fund. The fund encourages racial and ethnic minority students to pursue a law degree and to provide financial assistance for them to attend and complete law school. The ABA Legal Opportunity Scholarship grants 10-20 incoming diverse law students with $15,000 of financial aid over their three years in law school. Perhaps this effort will afford promising young minority students an opportunity to become lawyers and build a more diverse applicant pool for law firm jobs.     

As stated above, cannabis prohibition has been disproportionately deleterious to minority populations. This has led to many young people that have been deprived of educational opportunities and a future by virtue of being arrested for marijuana possession. Our firm is taking steps to advance the descheduling and/or legalization of marijuana. It is well documented that marijuana has been a key driver of mass criminalization in this country and hundreds of thousands of people, the majority of whom are Black or Latina/o, have their lives impacted by these arrests each year.

Despite this, federal law remains unchanged. Yet there is a case with the potential to remove cannabis from the Schedule I Controlled Substances List: Marvin Washington v. William Barr, No. 18-859 (2d Cir. 2019). The lawsuit asks the federal courts to declare that the Controlled Substances Act (CSA), as it applies to cannabis, unconstitutional, and to prohibit federal enforcement of the unconstitutional classification. The plaintiffs include: Marvin Washington – former NY Jets football player and Super Bowl Champion-turned-cannabis entrepreneur; two children – Alexis Bortell and Jagger Cotte – who need medical cannabis to live; the Cannabis Cultural Association – a non-profit organization dedicated to supporting and educating communities of color harmed by the war on drugs; and Jose Belen – a disabled Iraq War combat veteran who treats his PTSD with medical cannabis. 

The plaintiffs argue that this classification of cannabis: (i) is irrational as shown by, among other things, the federal government’s own acknowledgement of cannabis’ medical efficacy and safety – a violation of the 14th Amendment; (ii) this violates medical patients’ fundamental rights to preserve their health and lives with medically safe and effective treatments, and their fundamental rights to travel and petition the government for grievances (under the First Amendment), while having medical cannabis on their person; and (iii) violates the Equal Protection Clause of the Fifth Amendment due to its racist history and current enforcement. 

They are now filing a petition with the U.S. Supreme Court, asking for permission to appeal the lower courts’ decisions (the US Supreme Court must give parties a right to appeal, since it’s not automatically given). However, because the U.S. Supreme Court only grants a small percentage of these requests, it’s important for the plaintiffs to demonstrate the national impact of their appeal. That’s where amicus briefs come in. Our firm will work pro bono to file an amicus brief in this matter before the Supreme Court, a small step that could impact the lives of so many.  

We will continue to look for other pro bono opportunities that have the potential to exact social and racial justice as it relates to cannabis. It’s the least we can do as attorneys and participants in this commercial industry.  

Our own HLG Attorney, Sara Gersten, is the Executive Director and General Counsel for the Last Prisoner Project (LPP), which focuses on three key criminal justice reform initiatives: prisoner release, record clearing through clemency and expungement, and reentry programs. A core social justice focus is to release incarcerated cannabis prisoners. Data shows, however, that most released prisoners fail without the proper resources in place. Reentry programs work to greatly reduce recidivism. A criminal record can also be a significant barrier to employment, housing, financial assistance, and more, so we also work to provide record relief. Collectively these programs help cannabis prisoners become "fully free."HLG provided financial and human capital resources to LPP in 2019 and will continue to do so in 2020 and beyond in an effort to further social justice.    

In recent months, we’ve seen alarming images of local police forces acting violently. Police brutality disproportionately impacts minority populations, who have few resources to combat these wrongs on their own. The National Police Accountability Project (NPAP) is a 501(c)(3) organization and a project of the National Lawyers Guild, founded in 1937 as the first racially-integrated national bar association. In 1999, NPAP was created as a non-profit to protect the human and civil rights of individuals in their encounters with law enforcement and detention facility personnel. NPAP’s central mission is to promote the accountability of law enforcement officers and their employers for violations of the Constitution and the laws of the United States. With over 500 members and growing, it affects change in the flawed legal system and fights to put an end to police brutality of all forms. Our firm will provide financial support and volunteer services for NPAP.  

Since its inception, the HLG has supported the Minority Cannabis Business Association (MCBA), the first 501(c)(6) not for profit business league created specifically to increase diversity in the cannabis industry. The MCBA’s mission is to provide equal access for cannabis businesses and promote economic empowerment for communities of color by creating policy considerations, social programming, and outreach initiatives to achieve equity for the communities most affected by the war on drugs.  

In 2018, HLG sponsored, organized, financed, and provided programming for the MCBA’s first Denver-based opportunity summit. Minority-owned businesses have greater difficulty obtaining capital investment and other forms of financial support for their cannabis companies. As such, HLG will reach out to the MCBA and offer its members (and referring parties) free investor readiness sessions in order to assist in preparing these minority-owned/driven cannabis businesses for raising capital and M&A scenarios. We will also be reaching out to identify and support applicants for Colorado’s Social Equity Program on a pro bono basis.

Taken together, this represents our firms first formalized step toward creating social and racial justice in our community. We certainly don't have all the answers and will no doubt make mistakes on our path to improvement. As we watch the evolution of cannabis social equity programs and learn more about their imperfections, we all have an obligation to work for change.

Benzinga's Related Links:

• Cannabis And Social Equity: Challenges And Opportunities | Benzinga
• Why Social Equity Matters For Cannabis, And What States Are doing about it