Legalizing Marijuana In New York: How It Hinges On How Money Goes To Communities Of Color

Richard Harding, part owner of Green Soul Organics, which is seeking to open cannabis businesses in Massachusetts. Photo: Uncredited

In Massachusetts, two aspiring cannabis entrepreneurs, Richard Harding and Taba Moses, talk openly about growing up in low-income minority communities.

They said they watched relatives and friends get trapped in the criminal justice system and barred from opportunities afforded to affluent neighborhoods, particularly after marijuana arrests.

“I’ve had family members who were directly impacted, incarcerated for lengthy periods for chiefly drug crimes and cannabis crimes that are now largely legal,” Harding said.

“The war on drugs was a sham, and really it just criminalized poverty.”

They described Massachusetts’ program as nearly inaccessible to victims of unjust pot prohibition.

In New York, a similar fight is underway as the state considers whether to legalize marijuana.

Leading Democratic lawmakers in New York said they would not approve a bill if marijuana revenue was not reinvested in communities of color and didn’t allow for minority-owned businesses to reap the benefit of the pot sales.

“We’re talking about a multi-decade problem that was created,” said Assembly Majority Leader Crystal Peoples-Stokes, D-Buffalo.

She said she’s hopeful a deal in New York can be reached in the state budget for the fiscal year that starts April 1. But she insisted any law must spell out how weed revenue will aid impoverished communities disproportionately hurt by decades of marijuana arrests.

“It’s not going to be solved in a couple of budgets. So it has to be in the statute. Because the next governor, whoever he or she may be, should have the same responsibility to invest in the lives of these folks as the previous governor.”

Advocates are demanding large portions of the projected $300 million per year in pot tax collections go to benefit communities hit hardest by the historic injustice of marijuana policing.

Civil rights leaders also urged lawmakers to prevent big cannabis companies from excluding people of color from New York’s legal weed industry, which is expected to hit sales of between $1.7 billion and $3.5 billion per year.

Central to the ultimatums are broken political promises in other states that touted restorative justice plans, only to have most legal cannabis profits funneled to marijuana industry conglomerates largely controlled by white men.

So far, Gov. Andrew Cuomo has offered indistinct measures for spending marijuana tax money on social equity, a stance that many advocates blamed for killing legal weed legislation last year.

Yet Cuomo’s newly hired director of cannabis, Norman Birenbaum, asserted the governor and legislators share a common goal of helping those harmed by previous cannabis prohibition.

“We have an opportunity to control our destiny here and make sure that we make the right choices for social and economic equity applicants, and that’s what we intend to do,” said Birenbaum, who joined Cuomo’s administration in December after overseeing Rhode Island’s medical marijuana program

Much of the negotiating is unfolding behind closed doors in Albany, where Birenbaum asserted a deal is being hashed out to include a cannabis legalization bill in the state budget.

The debate over including specific pot tax spending rules instead of more flexible ones remains the most substantial legislative sticking point.

“We’re narrowing that gap, and there are a few details that we look forward to ironing out with them,” Birenbaum said in a Jan. 31 interview with USA TODAY Network.

Some advocates, however, are skeptical of Cuomo’s plan to keep the money in the state budget’s general fund — instead of one exclusively dedicated to social equity and other marijuana-related programs focused on public health, safety and education.

The difference is key to ensuring the money doesn’t go to unintended purposes, such as plans to repair New York City’s subways discussed last year, advocates and lawmakers said.

“All the research says that if a family is separated through incarceration, which many of them were separated that way, that there is a negative impact on the livelihood of the children and the entire family,” Peoples-Stokes said.

“We’re all paying for that,” she added. “You have to understand there has been damage done to these families, and you have to try to repair it.”

Why marijuana social equity is struggling in other states

New Yorkers do not have to look far for examples of social equity failures plaguing the cannabis industry.

In Massachusetts, which legalized recreational pot in 2016, only about 6% of roughly 700 marijuana business licenses have gone to minority-owned applicants, prompting protests from civil rights advocates and minority business leaders.

Everything from financing hurdles to business training gaps have kept it beyond the reach of many people of color, Harding and Moses said.

“Massachusetts cannabis business is very dominated by large companies that are often owned by rich white males, and there are plenty of people out in the state who we believe ought to have an opportunity,” Harding said.

To understand the inequity, consider the state’s population is 22% Latino or African-American. And that same demographic makes up 75% of people imprisoned under mandatory minimums for drug crimes.

Similarly, Illinois recently became the 11th state in the nation to allow the sale of recreational marijuana. But when stores opened in Chicago on Jan. 1, white men were the ones raking in profits, city officials said.

In Chicago, where 11 dispensaries had been licensed, not one was owned by a woman or person of color.

That’s because the city’s initial licenses were only being awarded to owners of existing medical cannabis dispensaries, which have little-to-no minority ownership.

“It seems, historically, that we are never in the lead. We’re always told to wait our turn,” city Alderman Leslie Hairston said in December.

“The only people that benefit from this deal are the white people. Once again, we get thrown in the jails, and they get thrown in the banks.”

Moses expanded on the history of inequality that drives his fight to own a cannabis business, recalling his youth in subsidized housing projects in the shadow of Harvard and Massachusetts Institute of Technology.

“Our neighborhood never had a chance,” he said. “Now we can have access to a cannabis industry that used to be used to put us in jail and lock us up.”

The two men said they are part owners in Green Soul Organics, a 100% minority owned startup seeking to open several cannabis businesses in Massachusetts.

They’re also organizers behind the advocacy group Real Action for Cannabis Equity, or RACE.

Cuomo’s cannabis bill includes a variety of social equity measures, such as small business incubators and low- to no-interest loan programs catering to those affected by marijuana prohibition.

There are also measures to spend New York pot tax revenue on local community impact grants outside of the cannabis industry.

“Because these communities need help and they need investment and need resources and not all of them want to engage in the cannabis industry, which can be a volatile industry,” Birenbaum said.

Much of the playbook built upon efforts in legal weed states to correct past missteps.

“It’s really great to see states like New York paying attention and learning from our model and hopefully improving on our model,” said Shaleen Title, social justice leader on the Cannabis Control Commission in Massachusetts.

One of the key challenges nationally has been legal weed’s limited access to traditional banking due to the federal prohibition on marijuana. Systemic and unconscious racial bias within loan programs have also hindered financial equality in general, Title said.

As a result, Massachusetts joined other states that saw many of the early recreational pot business licenses go to existing medical marijuana companies.

Some advocates contend the head start was a byproduct of heavy lobbying and political campaign contributions.

“The medical marijuana companies are not stupid. When they got into the medical space, they were betting at some point it was going to go recreational,” Harding said.

Advocates have also criticized Massachusetts regulators for failing to prevent existing cannabis companies from pursuing questionable business deals with social equity applicants.

Harding asserted the deals involve people of color giving up ownership stakes in exchange for various investments from cannabis companies, citing reporting in The Boston Globe about efforts to circumvent the cap on pot business licenses for each entity.

“A few people from the hood, so to speak, make a couple of dollars while those companies get uber rich on the back of social equity, and it’s sickening,” Harding said.

Title asserted Massachusetts has strengthened regulations to prevent abuses of the social equity programs and expanded training programs. It is now granting new delivery business licenses to disadvantaged applicants.

Still, state legislators in Massachusetts have control over how the tax money from marijuana sales gets spent, and recreational pot sales hit nearly $400 million in the first full year.

“The reason there isn’t one magic answer is that there isn’t one magic problem,” Title said.