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Washington State Social Equity Program?

Washington passed a law to address “Social Equity” which aims to compensate for the harm done to neighborhoods and people especially damaged by the War on Drugs. In other states this involves assuring that victims can get cannabis licenses, past criminal records are expunged, and those in prison for now-legal offenses are released. The concept was not invented until well after WA and Colorado legalized, so they have to catch up.

About a year after Colorado started opening legal storefronts the Denver Post mapped the locations and people noticed that the licensees were concentrated in the poorer neighborhoods with high concentrations of people of color. Meanwhile, Uncle Ike’s was one of the first stores to open in Seattle, likewise in a neighborhood with a large non-white population. Both observations triggered protests and demonstrations claiming “gentrification” with the demand that the pot shops not invade their community (“Crime! Traffic! Think of the kids!”)

Then there was a complete turnaround. The affected people asked why they weren’t represented among those getting licenses, why they weren’t reaping the profits after being beat up disproportionately by the War on Drugs [Joe Biden]. A few states that came later included provisions for favoring those victims to acquire licenses.

The WA law started out completely different than what was originally proposed. A few activists (white, current license holders) filed bills to address this, but it was quickly (during committee hearings) determined that the bill had no support or coordination with those affected. It took a lot of watering down to get something, anything, passed because the issue was real.

WA has limits on the number of licenses to issue, about 579 retail stores, for instance. And those have been issued. So even with social equity there weren’t licenses to issue. Except there were about 34 licenses currently unused and inactive. These were confiscated for rules violations, issued to a potential licensee in a jurisdiction that has banned cannabis, or the licensee failed to complete a build-out. The law requires that the Liquor and Cannabis Board issue those to qualifying individuals. There are no rules how this will be done.

Meanwhile, those later states that included equity in their laws went to work to identify and issue licenses. The first obstacle was that these people didn’t have the money to navigate the license process or construct a business from scratch, and the second was that they didn’t have the experience or skills to be successful in a very complicated business. To date, Massachusetts has one equity business opening today in Boston, and I believe Illinois has one or two. It’s taken years to find appropriate owners to achieve the goals.

WA set up a Technical Assistance Program to address the lack of skills in the regulatory and business aspects of the business, established a grant program (minutely funded), and, like all legislatures nationwide, set up a Study Group to examine the (mostly political) problem and write a report for the governor. These put off doing anything for at least a year or two.

Massachusetts is the most aggressive in pursuing it’s equity goals and it’s been quite the slog with little to show for it. Even when the state manages to tweak the system to issue a license to a person of color, access to capital, a large amount, usually isn’t available. And the right skills are rare among the potential licensees. Local jurisdictions are also quite successful in erecting even more roadblocks.

So whether these attempts can actually work is an unknown right now. This will become a hot topic this summer when Arizona debates the initiative to legalize, which does include a plan for equity. It’s already bogged down New York’s attempt to legalize (via the legislature), as well as a few other states.

There is little to say that Washington’s law will accomplish anything, except to delay the discussion until other states, with much greater needs, work out the fine points. Colorado has a similar problem. California, of course, has a massive problem because of the requirement for huge amounts of money to get into the game.

This topic will be debated for years….

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