Representing the “Most Harmed” in New York state.
New York pride is proving it’s the state of leadership. Where other states have failed in providing fair starts to the most harmed by marijuana drug laws, we have a chance to make it right.
We the Cannabis Social Equity Coalition – NYS have come up with actionable ideas to ensure those most affected by prohibition can enter the market competitively, with resources and education that can provide sustainable growth.
The goal of the Cannabis Social Equity Coalition - NYS is two fold:
First, work with the Cannabis Control Board, the Cannabis Advisory Board, the Office of Cannabis Management and the Chief Social Equity Officer to ensure that the social equity provision is implemented in ways that substantially benefit social and economic equity applicants (particularly the Most Harmed) and communities disproportionately impacted by marijuana criminalization, consistent with the intent of the legislation.
Second, provide on-going education, training and expert services to social and economic equity applicants, the Most Harmed and adversely impacted communities.
Make Funds Immediately Available
Advocate for the immediate release of funds designated to support social and economic equity applicants and communities. Funds must be released before the marijuana market is saturated and multi-million dollar companies dominate the market.
The marijuana legislation requires the creation of a social and economic equity plan. The plan must be designed to give social service and economic priority to individuals and communities adversely impacted by the marijuana drug laws. Part of the social and economic equity plan must include monetary support to individuals and communities adversely impacted by the marijuana drug laws. To provide monetary support to adverse communities, the legislation created three (3) funds: the New York State Drug Treatment Public Education Fund, the New York State Community Grant Reinvestment Fund and the New York State Lottery Fund.
The money for each of these funds will come from tax revenue collected from the sale of recreational marijuana by licensed companies. Twenty percent (20%) of the tax revenue will go to the New York State Drug Treatment Public Education Fund, forty percent (40%) will go to the New York State Community Grant Reinvestment Fund and the remaining forty percent (40%) of the tax revenue will go to the New York State Lottery Fund.
These funds are designed to support communities adversely impacted by the marijuana drug laws. To monetarily support individuals adversely impacted by the marijuana drug laws, the legislation requires that the social and economic equity plan give low-interest and zero-interest loans to social and economic equity applicants who are awarded a license from one of the nine (9) license categories. The legislation also requires the creation of an incubator program to provide social and economic equity applicants with counseling support, small business coaching, financial planning and regulatory compliance assistance.
According to the legislation, to fund the low-interest and zero-interest loans and the incubator program the Cannabis Control Board, which oversees the implementation of the marijuana legislation, has the authority to assess registered organizations with a one-time special licensing fee to sell recreational marijuana as a cultivator, processor, distributor and retail dispensary. Such fee shall be assessed at an amount to adequately fund low-interest and zero-interest loans and incubator assistance.
The Cannabis Social Equity Coalition is of the view that both the support to communities and individuals adversely impacted by the marijuana drug laws put forward by the legislation is clearly an improvement over support provided by other states to impacted communities and individuals. However, without adequate funding and the timely release of funds, New York will fail to reach its goal of creating social service and economic opportunities that redress the harm done to impacted communities and individuals, as did other states.
The cannabis social equity coalition takes the position that the one-time licensing fee that will be imposed on registered organizations will fall far short of the funds social and economic equity applicants will need. There are only 10 registered organizations in New York State. Any reasonable licensing fee requested would not be enough to support 50% of the licenses given to social and economic equity applicants (a requirement of the legislation), particularly if they are seeking the more lucrative cultivation, processing or distribution license.
In addition, the money for the Community Grants Reinvestment Fund, the Drug Treatment Public Education Fund and the Lottery Fund will come from taxes paid by licensed organizations. As a result, the money provided by these funds will not be available for years, i.e., after the taxes have been collected and dispersed according to legislative priority. What we know from other states that legalized recreational marijuana is that after approximately two and a half (2.5) to three (3) years, the market becomes saturated with marijuana, pushing prices down and putting small licensees out of business. Therefore, it is only within the first two (2) to three (3) years that opportunities exist for social and economic equity licensees to make a large enough profit to effectively compete with the multi-million dollar companies in the market. If the funds and other resources are not available until three (3) years after the multi-million dollar companies have been up and running, it is unlikely social and economic equity companies will be able to effectively compete in the market.
Finally, US Senate Majority Leader Chuck Schumer and Senators Cory Booker and Ron Wyden recently submitted a bill to congress for legalizing marijuana. If the democrats continue to control the two houses of congress and the executive branch, it is likely this bill will pass within the next couple of years. With its passage, the current prohibition on cross border sales of marijuana will be lifted, making it possible for big cultivators and processors from any state to sell their product in any other state. Once that happens, it will be extremely difficult for small marijuana producers in New York to compete in the market.
Based on these findings, the cannabis social equity coalition is asking that the cannabis control board, the cannabis advisory board and the executive director of the office of cannabis management request that the state budget include funds that support the social and economic equity plan and that can be released immediately to social and economic equity applicants. Alternatively, we are asking the office of cannabis management in collaboration with the cannabis control board and the cannabis advisory board to issue state bonds that can sufficiently and immediately support the social and economic equity program or access funds from the Tobacco Master Settlement Agreement for this purpose.
50% of all licenses issued
Ensure that individuals and communities adversely impacted by the marijuana drug laws receive 50% of the licenses from each of the nine (9) license categories:
- Cultivation
- Processing
- Distribution
- Dispensary
- Cooperative
- Micro-Business
- Delivery
- Nursery
- On-Site Consumption
In addition to making funding available that gives priority to communities and individuals impacted by the marijuana drug laws, the legislature requires that the social and economic equity plan awards fifty percent (50%) of the licenses from the nine (9) categories to social and economic equity applicants. However, the legislation does not say whether the social and economic equity plan should include all, some or only one of the nine (9) license categories. It is possible that plan developers (the cannabis control board) could reach the 50% goal by only making one of the categories available to social and economic equity applicants.
For example, in a 100 license environment 50 social and economic equity applicants can be given a license in the "delivery" category and the remaining 50 licenses not reserved for the social and economic equity population can be spread across the remaining 8 more lucrative categories. This would achieve the 50% licensing goal but would limit social and economic equity applicants to the less lucrative licenses.
To avoid being relegated to the less lucrative license categories, the cannabis social equity coalition is requesting that social and economic equity applicants be awarded 50% of the licenses in each category.
The Most Harmed
Advocate that priority treatment be given to people "Most Harmed" by the marijuana drug law. Heightened priority should be given to impacted African Americans and Latinos who have been arrested and convicted of a marijuana offense. Priority should be given to them over distressed farmers, disable veterans and Non-African American or Hispanic women-owned businesses.
The legislation defines social and economic equity applicants as the following:
- Individuals from communities disproportionately impacted by the enforcement of cannabis prohibition
- minority-owned businesses
- women-owned businesses
- minority and women-owned businesses
- distressed farmers and
- service-disabled veterans.
The legislation also states the following:
Under the social and economic equity plan, extra priority (emphasis added) shall be given to applications that demonstrate that an applicant:
- is a member of a community disproportionately impacted by the enforcement of cannabis prohibition
- has an income lower than eighty percent of the median income of the county in which the applicant resides and
- was convicted of a marihuana-related offense prior to the effective date of this chapter, or had a parent, guardian, child, spouse, or dependent, or was a dependent of an individual who, prior to the effective date of this chapter, was convicted of a marijuana-related offense.
With respect to disproportionately impacted communities, the legislation defines them as communities that have a history of arrests, convictions and other law enforcement practices in a certain geographic area, such as, but not limited to, precincts, zip codes, neighborhoods and political subdivisions, reflecting a disparate enforcement of cannabis prohibition during a certain time periods, when compared to the rest of the state.
The cannabis social equity coalition wants African Americans and Latinos included in the group of applicants given extra priority. With their inclusion, the cannabis social equity coalition considers these applicants the "Most Harmed" and wants extra priority given to this population.
The cannabis social equity coalition defines disproportionately impacted communities as communities with high rates of incarceration in comparison to incarceration rates from other communities within the surrounding city. Impacted communities are communities with inadequate healthcare systems and inadequate education systems unemployment rates. They are communities that have been historically neglected.
The cannabis social equity coalition considers these communities the most adversely impacted by the marijuana drug laws and they should be given extra priority for grant funding.
Capacity Building Assistance
Provide capacity building assistance, management and administrative training and back-office resources to “Most Harmed” individuals and communities applying for cannabis licenses and grants. These individuals and communities will be identified and supported by coalition partners.
The cannabis social equity coalition will provide training and “turn-key” professional service support to individuals and communities identified by our coalition partners.
OPEN LETTERS TO NEW YORK STATE LEADERSHIP
Letter 1
Letter 2
