More funding needed for New York’s Cannabis social equity entrepreneurs
Challenges and Calls for Equity in New York's Cannabis Industry.
In 2023, some 6,900 New Yorkers applied for adult-use recreational licenses, competing for approximately 900 to 1,500 licenses expected to be issued by the NYS Office of Cannabis Management this year.
It’s essential to acknowledge the long road ahead in achieving true equity within the industry. While the Marijuana Regulation and Taxation Act aims to address the injustices of the past, there remains a glaring disparity in the allocation of resources, particularly when it comes to supporting social equity applicants.
One of the fundamental pillars of this legislation is the promise of social and economic equity for communities disproportionately impacted by the War on Drugs. However, the reality is stark: there is a severe lack of financial support for those who need it most.
While there is talk of providing capital for farmers, who are predominantly white, there is no money in the budget to provide technical support to social equity applicants and community education and communications.
An allocation of $130 million for social equity entrepreneurs is a step in the right direction.
Those who are the best capitalized and most prepared – locations, leases, consultants (read: lots of money) – are going to open first, leaving SEE entrepreneurs in the dust.
Critical start-up costs such as land leasing, cultivation skills, product procurement, and staff training require significant investment. Without adequate funding, many social equity entrepreneurs will struggle to even enter the market, let alone compete with established players.
The lack of cannabis-specific technical and business support services further exacerbates the challenges faced by social equity applicants. Navigating the complex regulatory landscape of the cannabis industry is daunting for anyone, let alone those who have been historically marginalized.
$80 million for technical assistance
Following licensure, compliance with the voluminous laws and rules in the cannabis market is its own particular challenge, and trained legal professionals and case managers are required to help ensure that SEE entrepreneurs, who are the most vulnerable to inadvertent non-compliance (and therefore stiff fines and potential loss of licensure), have ongoing access to legal and technical compliance assistance.
Funds must be dedicated to CBOs and small business incubator entities that are general and cannabis business subject matter experts and who work in collaboration with credible messengers in communities disproportionately impacted by prohibition to help SEE entrepreneurs get started.
An estimated $80 million is required for these efforts.
$50 million for OCM and community-based organizations
Many potential SEE entrepreneurs still lack information about how the legal cannabis market will work and how they can enter it. Additionally, local communities, consumers and boards also need community education to understand the critical importance of buying legal cannabis, its medical benefits, and to counteract the negative impacts of the illicit market.
Therefore, an estimated $50 million should be spent directly on community education for both the OCM and community organizations.
Just thinking about the farmers isn’t right; there should be a match in the budget for social equity.
It’s time for the state to fulfill its promise of true social equity in the cannabis industry. This means not only providing financial support but also investing in the necessary resources and infrastructure to empower marginalized communities.
By prioritizing transparency, accountability, and inclusivity, New York can set a precedent for equitable cannabis legislation that other states can emulate.
