Paper: Building the Prison to Legal Drug Dealing Pipeline: A Comparative Analysis of Social Equity Policies in Recreational Cannabis Licensing

Since 2012, twenty-four states have legalized adult-use recreational cannabis. To varying degrees, state laws allow for the production, distribution, retail sale, and on-site consumption of cannabis in licensed businesses [1].1 In addition, recreational cannabis is decriminalized in the District of Columbia and the territory of Guam. Although legislative provisions vary across these jurisdictions, they have the combined effect of decriminalizing recreational cannabis for 54% of the U.S. population. A recent trend in cannabis decriminalization is that states have placed greater emphasis on incorporating social equity goals with the legalization of recreational cannabis. Prior to this shift in policy emphasis, cannabis legalization was more focused on curbing law enforcement costs, creating regulatory frameworks for medical uses of cannabis, and developing cannabis markets as a source of new tax revenue [2]. New York and other states that recently passed legislation to legalize recreational cannabis exemplify the increased focus on cannabis legalization as a tool to promote social and economic equity. A defining feature of New York’s 2021 Marijuana Regulation and Taxation Act (MRTA) was its social and economic equity provisions [3]. The provisions set aside at least half of the state’s recreational cannabis dispensary licenses for members of communities disproportionally impacted by punitive drug laws and provided business assistance to equity applicants. In addition, the Act earmarked revenue for taxes on recreational cannabis for projects and programs that directly benefit black and brown communities disproportionally impacted by the war on drugs.

The growing emphasis on linking social equity goals with the legalization of recreational cannabis should be viewed against the backdrop of the stigmatization of both marijuana in society and the entrepreneurs who are the expected beneficiaries of social equity provisions. Understanding how states have approached the creation and implementation of these types of business set-asides provides insights into the degree to which social and economic equity programs can achieve their goals. This is the case when a nexus exists between a highly stigmatized industry and a group of entrepreneurs, as well as in economic sectors that are more mainstream.

At its core, this article asks if, under their current structure and implementation, recreational cannabis laws achieve social equity goals. More specifically, differentiation in the social equity provisions of state laws governing business set-asides for recreational cannabis dispensaries is examined. The methods for this analysis are two-pronged. First, content analysis of public policy documents is used to examine social equity provisions in state and local cannabis laws applicable to large U.S. cities (2020 population > 600,000). Second, spatial analysis is used to gain insights into how the geography of cannabis businesses furthers or hampers the core social and economic equity goals of the law. The findings from the analysis are used to generate recommendations to strengthen the social and economic equity outcomes from the implementation of recreational cannabis policy nationally.