Cannabis Accounting

The War on Drugs, Cannabis & Social Equity

By June 18, 2020March 31st, 2021No Comments

This post is dedicated to sharing some resources to better understand systemic racism, the war on drugs, and the important role of social equity programs.

This video does a great job explaining some of what systemic racism is and how communities of color are not set up for economic success in the current system.

Here’s some recent information the some drastic statistics between racial communities.

You can check out the whole article here.

Here are a few links from thought leaders that can help you better understand what is going on from a few thought leaders, here are some links.  

Here are a few definitions that we think are important to share.

The war on Drugs

The war on drugs unofficially stated in the early 1900’s with Reefer madness, and officially started in 1971 with President Nixon and grew massively during the Regan and Clinton eras.

The war on drugs, coupled with the pipeline to prison, 3 strikes and your out, and mandatory minimums has disproportionally harmed communities of colors economically and socially.

 According to Betsy Pearl for the Center of American Progress, “Black Americans are four times more likely to be arrested for cannabis charges than their white peers” and “make up nearly 30 percent of all drug-related arrests, despite accounting for only 12.5 percent of all substance users.”

Cannabis crimes aren’t petty sentences for communities of color and you can see how the pipeline to prison has destroyed communities of color. If you haven’t already, please watch this documentary on netflix.

The Green Rush and Social Justice

Operating a cannabis business isn’t like opening up an online website.

There’s a punitive tax code and entrepreneurs can’t access capital through traditional routes due to cannabis still being federally illegal.

Substantial capital and access to capital are needed to start and run a successful cannabis business.

Licensing costs alone can be upwards of $100,000, startup capital could be in the millions (depending on the license type), and operating costs are anything but light.

The cost of starting a cannabis business is high and requires access to capital.

Cannabis social equity programs are a way to remove barriers that have kept the populations most impacted by cannabis prohibition out of the legal market.

The thought behind social equity is to give those that had been impacted by the war on drugs an opportunity to participate in the “green economy.”

Without social equity programs, many African-American, Latino-American, and Native-American communities, who have historically lacked access to capital wouldn’t have an opportunity to participate in this billion-dollar industry. Make sure you watch this video.

However, not all states that have legalized cannabis, have social equity program

In fact, only 9 states of the 34 states that have medical programs and 11 states that have adult-use programs have social equity programs as of June 19, 2020. 

We will update this list as we get more information.

  1. California
  2. Illinois
  3. Michigan
  4. Massachusetts
  5. Oregon (Portland)
  6. Missouri
  7. Maine
  8. Ohio
  9. Pennsylvania

Not all states are creating their social equity programs equal. Here’s a great article that dives into the major differences. https://mjbizdaily.com/chart-not-all-states-cannabis-social-equity-programs-are-equal/

It’s important that as we continue to fight for cannabis legalization, we push the agenda for social equity programs forward. However, it’s important that the social equity programs are well thought out and provide economic support to applicants and license holders throughout their entire business, not just at the beginning. That is EQUITY.

What is your Equity Plan?

As an entrepreneur and a business owner, regardless if there’s a social equity program in your state, our challenge to you is to build an equity plan, and build it collectively with the community you are working in. The worst type of equity plan is built in a silo by a board that thinks a like, sounds a like, and even looks a like.

Organizations that are supporting minorities in Cannabis

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