Minority Cannabis Business Association Report Outlines Social Equity And Cannabis Laws For Advocates

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

The MCBA recently unveiled its National Cannabis Equity Report, which presents initial findings from its National Cannabis Equity Map - a dynamic digital tool for advocates and lawmakers seeking information on state and municipal social equity programs and cannabis laws that impact the outcome of social equity programs.

The Equity Map

The report describes the Equity Map as “a research tool that gathers and stores data critical to the understanding and analysis of 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 gather and track information on state and local cannabis equity programs, though throughout the research and analysis process it became evident that to serve its purpose the data had to extend beyond existing equity programs. MCBA expanded the Equity Map to include additional laws that could affect 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 concerning (1) key features of social equity programs, (2) other equity and restorative justice provisions, and (3) other industry provisions affecting equitable outcomes in the cannabis industry. The latter two include data from states with and without formal social equity programs.

Highlighted Issues Pertaining To Social Equity

The Report highlights the findings of 40 policy issues explored in the Map. Among the highlighted issues, MCBA found that the number and efficacy 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, not one has resulted in an equitable cannabis industry across all four pillars of equity (industry, justice, community, and access),” states the report.

The report also noted that many states continue to utilize state-level license caps to limit state markets leading to a lack of diversity and the proliferation of the legacy market. For example, the report shows that out of 36 states where cannabis is legal, 26 have state-level license 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 oversaturation in low-income neighborhoods, state-level license caps do not decrease retail outlet density or overconcentration, especially in low-income neighborhoods. Conversely, heavy competition for limited licenses leads to lawsuits that delay the implementation of social equity programs and increase costs to prospective licensees,” MCBA explains in the report. “State medical programs include significant barriers to entry to ownership and employment that carries from the medical to adult-use market, along with significant advantages for medical operators seeking adult-use licenses, including automatic co-location of an adult-use license with medical licenses, early market access, and land use exemptions that create inequality in state adult-use cannabis markets.”

The report highlighted that socioeconomic 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, the 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.