Washington state playing catch up on social equity

Washington State may have been a pioneer in the fight to legalize cannabis, but when it comes to racial equity in its legal industry, the state lags far behind. Throughout the 2000s, minority entrepreneurs operated many of the more than 1,500 dispensaries in Washington’s quasi-legal medical market. In the eight years since the voter-approved Initiative 502 legalized adult use, the number of minority entrepreneurs in the industry has dwindled significantly. 

Today, the industry is even whiter than Washington’s general population, already one of the whitest states in the nation. African Americans make up 4% of Washingtonians, but only 1% of cannabis licensees. Of the 49 licensed dispensaries in Seattle today, Black owners control none of them. 

The Washington Task Force on Social Equity in Cannabis, established by the legislature in 2020, aims to right some of these historic wrongs and inject some racial and economic justice into the industry.

Launched in September, the social equity task force includes members representing communities that have historically borne the brunt of the War on Drugs—including the African American, Latinx and Indigenous communities—plus various state agencies, the legislature, cannabis businesses, and law enforcement. It exists to advise the Liquor and Cannabis Board (LCB) on creating a social equity program for cannabis licensees.

Throughout the fall, the task force conducted a series of listening sessions to gather input from stakeholders on ways that lawmakers and state agencies could promote minority participation in the industry.

At its January 26 meeting, just in time for the 2021 legislative session, the task force voted to prioritize race, rather than geography, in its programs and policy advocacy, as well as to allow current cannabis licensees who fit social equity criteria to participate in its programs, reports Ganjapreneur. That means minority applicants from throughout the state—not just from locations disproportionately impacted by the drug war—could receive grants from a $1.1 million fund established to provide technical assistance in obtaining new producer/processor or retail licenses. And at least $150,000 of the fund would go to existing retail licensees for equipment upgrades, mentorship, and other technical assistance. Grant recipients will have one year to report back on the completion of their projects.

Following the January meeting, two lawmakers who sit on the task force filed legislation to update state laws in line with the recommendations. The house bill, HB 1443, was filed by Rep. Melanie Morgan (D-Parkland), while the companion bill, SB 5388, was sponsored by Sen. Rebecca Saldaña (D-Seattle).

Paula Sardinas

“This bill is a healing process for the Black community,” said Paula Sardinas, the social equity task force co-chair, at a February 5 House Committee on Gaming hearing on HB 1443, reports Cannabis Observer. Sardinas, who represents the Washington Commission on African American Affairs (CAAA) on the social equity task force, thanked the backers for their “incredible” legislation. 

“This is a culmination of more than 300 interviews the commission has conducted from Spokane to Bellingham,” Sardinas continued, saying the interviews showed that many communities were “left out of I-502…and they needed some diversity, equity, and inclusion.”

Sardinas presented a 1-minute video enthusiastically endorsing HB 1443.

Testimony at the hearing was overwhelmingly supportive of the bill. 

Losing out in the green gold rush

While members of the social equity task force are hopeful about the prospects for racial justice in the cannabis industry going forward, some observers are not so sanguine. 

“The industry which we built was ripped from us,” Aaron Barfield, of the group Black Excellence in Cannabis, told The Seattle Times in December. “Our businesses were hijacked.”

Barfield knows of what he speaks. He was one of the many Black medical dispensary owners who lost their businesses in 2016 when the ironically-named Cannabis Patient Protection Act (SB 5052) went into effect. Meant to close the door on the unregulated medical pot market and complete the switch to a fully-regulated adult use market, the law forced all dispensaries that had not obtained a retail license under I-502 to shut down. Stores with a retail license could apply for a medical endorsement if they met certain criteria and put their staff through specialized training.

The problem was, Washington had about 1,500 medical dispensaries at the time, but the LCB decided to issue only 222 licenses with medical endorsements under the I-502 regime. The impact on medical retailers like Barfield was apocalyptic.

The new law included language directing the LCB to prioritize license applicants with a history of involvement in the industry. But competition for the tiny pool of licenses was fierce. Many of the mom-and-pop dispensary owners didn’t have the resources or know-how to navigate the new, more bureaucratic licensing process. And a loophole in the language spawned a bizarre black market in old pay stubs from budtenders who had worked as little as one day at a medical dispensary prior to 2013. As The Stranger reported at the time, old dispensary pay stubs were being advertised on Craigslist for upwards of $100,000. In the end, many well-heeled newcomers obtained licenses, while many legitimate long-time medical operators were left empty-handed.

Whether it was bureaucratic incompetence, unscrupulous investors jockeying for advantage in the green gold rush, overly-cautious policymakers, or outright racism in licensing, it’s hard to point a finger at a single cause of the precipitous drop in minority ownership. All of the above were certainly factors. Whatever the cause, Barfield aims his ire squarely at the LCB, which he accuses of incompetence and outright racism in its enforcement and implementation of the I-502 regime.

Black Excellence in Cannabis calls out cronyism

“Ultimately, cannabis should be removed from the control of the LCB,” Barfield told MJBI via email. “They have proven that they are incapable of administering a fair system.” He would rather have cannabis regulation overseen by the state Departments of Health and Agriculture, and a huge increase in the number of licenses available. “The scarcity model that the LCB has adopted has empowered rich white men to sell millions of dollars of cannabis in communities where Black men were arrested at a shamefully disparate rate. They have created a system of cannabis appartheid in Washington under the pretense of maintaining strict control.”

Going forward, Barfield is skeptical that the social equity task force will have any significant impact, as long as it has no power except to make recommendations to the LCB. Black Excellence in Cannabis has called for legislation that would force the LCB to increase the number of licenses available, and take steps “to repair the damage they’ve done to minority cannabis providers whose livelihoods they ruined.”

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