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 |  Subject: Limited-license marijuana markets hamper diversity and equity, study says  Mon Feb 14, 2022 9:51 pm | |
| Twenty-seven states have limited-licensing schemes that lead to the lack of diversity in the marijuana industry, according to a new study on equity, underscoring a growing debate about how best to boost cannabis business participation among minorities and those affected by the war on drugs.
The issue of license caps has exposed a fault line in the multibillion-dollar cannabis industry’s effort to be inclusive, often pitting minority and entrepreneurial applicants against multistate operators better positioned to afford a pricey business permit in a limited-license market.
“The best thing you can do for social equity is open up the market,” said Amber Littlejohn, executive director of the Minority Cannabis Business Association (MCBA).
The MCBA on Thursday issued a sweeping study that examined equity in 36 state-legal marijuana markets. It identified limited licensing as one of the barriers to equity.
The 39-page report concluded that, so far, none of the 15 states with social equity programs have created an equitable cannabis industry.
Social equity provisions especially are prominent in young and emerging recreational marijuana programs such as Arizona, California, Connecticut, Illinois, Massachusetts, Michigan, New Jersey and New York.
Littlejohn stressed that limited licensing is one factor among many that hamper efforts to promote greater minority participation in the marijuana industry.
But a consensus is growing among many that state licensing caps – which is the prevalent regulatory framework around the country – is a fundamental obstacle to equity and inclusion.
“I think we’ve got it all wrong,” Demitri Downing, founder of the Arizona Marijuana Industry Trade Association (MITA), told MJBizDaily.
“We should be moving away from the paradigm of limited licensing,” Downing said.
“We should promote a free market that is also helping social equity applicants” with funding assistance and low barriers to entry.
A number of MSOs emphasize limited-license markets as core to their strategy to prosper and grow.
In regulatory filings, MSOs talk about pursuing highly populated, limited-license markets that also have recreational marijuana or are on the trajectory to legalize adult use.
Markets frequently mentioned include Florida, Illinois, Massachusetts, New York, New Jersey, Pennsylvania and Virginia.
Littlejohn noted that Illinois-based Green Thumb Industries (GTI) even used the word “oligopolistic markets” as part of its strategy in a 2018 annual report, but the company since has quit using that term.
For their part, MSOs increasingly are touting their efforts to promote industry equity.
“We do not believe that limited licensing as a barrier to entry is inherently anti-social equity,” Massachusetts-based Curaleaf Holdings wrote in a detailed email comment to MJBizDaily.
Curaleaf wrote that it advocates for license “set asides” for minority-owned businesses and noted that it has supported cannabis entrepreneurs through mentoring and legal and technical services.
As for limited-license frameworks, Curaleaf wrote, social equity recipients “can benefit from those restraints on unlimited competition – which if left unchecked could have an even greater impact on equity goals.”
The media representatives for several other MSOs – including GTI and Florida-based Jushi Holdings – were contacted for comment but didn’t immediately respond.
.https://mjbizdaily.com/limited-license-marijuana-markets-hamper-diversity-and-equity-study-says/
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