CCG’s Eddie Armstrong shares his thoughts on the rising tide of social equity policy, and how the cannabis industry can lead the way

On June 17th, I had the honor of joining a panel of leading experts to discuss the state of social equity in the cannabis industry, and what we can do to make it a reality. You can watch the full hour-long webinar here.

Hosted by the good folks at Abaca, a leading provider of banking and financial services to the cannabis industry, the webinar addressed some of the most important issues facing social equity in the cannabis industry, from policy development to implementation. 

The following blog lays out a few of my top takeaways from the discussion, as well as some thoughts on how the cannabis industry can play a transformative role as an exemplar of social equity in action. 

Confronting Systemic Racism

Problems of systemic racism have been with us since before the Revolutionary War, and they continue to be reflected in many of our laws. Yet many influential people, such as Senator Tom Cotton, still openly question whether systemic racism exists at all. As a proud Arkansan, Mr. Cotton’s denial has been especially troubling to me. As we have seen with the ongoing debate over the appropriate response to climate change, there will always be individual and groups in power who would prefer to ignore the problem, or pretend it does not exist, than actually address them.

If we want to end systemic racism in this country, our leaders, both in government and in the private sector, must acknowledge the problem – and confront it head on. And that starts with our own industry.

Social Equity in the Spotlight 

Social equity programs in the cannabis industry have gotten a lot of attention lately thanks to Illinois’ recent Adult Use legalization. The new state law explicitly favors social equity applicants for cultivation and dispensary licenses, and includes a number of provisions to support broader social equity, including expungement and taxes earmarked to fund minority-owned business development.

Illinois has set a powerful example with its Adult Use legalization package. It’s commitment to expungement is especially exciting, and I believe it will become a new standard for states contemplating legalization.

Yet, while government reforms are essential to moving the needle, they are not sufficient. The cannabis industry must also embrace equity, and put it into practice. Few can doubt that much more still needs to be done to make social equity a reality in the cannabis industry. Consider Illinois, which is home to two publicly traded cannabis cultivators. Of their 16 total board members, only two are Black. 

Issues of exclusion and tokenism are still pervasive, as are challenges to would-be entrepreneurs who lack access to the financial resources necessary to participate in the rapidly growing cannabis sector. Even under the most comprehensive state laws, minorities can be used as the “face” of applications to gain social equity applicant status.

Taking Action

So, how can the cannabis industry do better, and what policy or regulatory changes are necessary to make social equity a reality for our industry?

Fundamentally, we must commit to democratizing the Green Rush. That means channeling investment toward minority entrepreneurs, and opening opportunities for people of color to participate in this generational opportunity. We need to build the necessary financial infrastructure in underserved communities, getting them banked, funding incubators and providing effective means of accessing capital. 

We must also commit to getting people of color and minorities into the industry at all levels through targeted community hiring and promoting diversity in recruitment. That means moving beyond tokenism, especially when it comes to Black people in the industry.

Seizing Our Opportunity

The cannabis industry faces a truly special opportunity. As a new industry, we are not burdened by all the institutional baggage that so often stymies meaningful change and reform. The youth and vitality of the cannabis industry is our greatest strength.

Cannabis is a booming industry with the potential to create enormous wealth for individuals, families, and communities. It is crucial that governments, companies, and investors commit to sharing that tremendous opportunity with those who have historically been left out in the cold. There is plenty of prosperity to go around.

Clearly, we have a long way to go, both as a society and as an industry. We each have a part to play in bending the arc of history toward justice, and I believe we can set a powerful example for others to follow.