Opinion: Is Studying and Qualifying “Equity” a Barrier to Entry?

Opinion: Is Studying and Qualifying “Equity” a Barrier to Entry?

“What is social equity?” 

On its face, this question, and the efforts that come along with answering it, may seem well-intentioned. But ask yourself: through which lens are you viewing it? 

In recent cannabis trends, policy and legal experts spent countless hours crafting carefully worded legislation to identify and empower targeted communities to participate in the industry. But posing questions like “What is Social Equity” and implementing complex legal structures to achieve it can often delay processes and create barriers to entry. 

States with competitive and limited license structures sometimes appear to have the best of intentions towards social equity; developing qualifying criteria to ensure that specific individuals should be involved. These processes, lottery or otherwise, inevitably result in various lawsuits that hold up patient and consumer access for years (see Alabama and so many more).

Then in other states as supply chains struggle and small operators are left out in the cold, governments are completing disparity studies and soliciting feedback about social equity cannabis programs (See Illinois). These efforts seem, again, well-intentioned, but during times when the challenges the industry is facing are so readily apparent – why wait? Should we require completion of a two-year long study to identify the problems that we already know exist? Often some of the answers to questions like these are staring us right in the face. 

What is social equity?

Here are some examples of policy ideas that could create a more equitable market:

    • Legalizing home grow and letting businesses evolve organically without complex state licensing processes. 
    • Freeing up capital for targeted communities to participate in the industry. 
    • Reducing tax burdens on all parties, not just a select few. 
    • Most importantly: freeing every last non-violent cannabis prisoner and helping impacted people expunge their records. 

Other states like New Mexico and Mississippi have chosen to embrace some of these principles and found success. These markets have opted for open, ongoing licensing systems which seems to have resulted in fewer barriers to entry and more opportunities for local, small, and often minority-owned businesses. These markets still have their fair share of challenges with market saturation, but at the very least these companies are allowed to compete on their merits. That’s capitalism!

Why do states even issue licenses? The revenue, of course. But this multi-billion-dollar industry has the ability to generate significant tax revenue through operator and sales taxes alone. When is enough, enough? We are no longer a nascent industry and we deserve better, it’s time we ask—nay, we demand—more. It’s time to organize, locally and federally.