Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Wednesday, December 7, 2016

"Can Oakland, a new capital of legal weed, undo the injustices of the war on drugs?"

The question in the title of this post is the headline of this lengthy and interesting recent California Sunday Magazine article. Here are excerpts:

Last year, U.S. legal marijuana was a $5.4 billion business, and that figure is expected to quadruple by 2020. According to one 2016 estimate, the industry and supporting businesses already employ between 100,000 and 150,000 people in the U.S., more than General Motors.  California’s recent vote to legalize recreational marijuana   — medical marijuana has been legal in the state since 1996  —  created the world’s largest legal market and sent the clearest signal yet that widespread legalization is inevitable. (Seven other states legalized medical or recreational marijuana as well.)

The most glaring irony of legalization is that for decades black and Latino communities have disproportionately suffered under harsh drug laws, and now, with those laws in retreat, the entrepreneurs cashing in on the booming business are overwhelmingly white.  California, like the four states that had previously legalized recreational pot, imposes restrictions on convicted felons joining the industry; some states also require business-license applicants to demonstrate cash reserves of hundreds of thousands of dollars or more.  Both criteria weigh heavily against minority entrepreneurs seeking to enter the industry....

A diverse city with a history of tolerant pot laws, Oakland was hoping to lead the way in creating an industry that compensates for the racial inequalities of the past, but it was struggling with how to translate decades of injustice into still-hypothetical profits.  Weeks earlier, Oakland’s city council had passed a remarkable, first-of-its-kind “equity amendment,” guaranteeing 50 percent of cannabis business licenses to former marijuana felons and to residents of several neighborhoods considered especially damaged by the war on drugs.  In public statements, Oakland City Council member Desley Brooks, who introduced the amendment, made clear that her intention was to foster minority-owned businesses.  “When you look at the cannabis industry here with respect to the ownership, it is predominantly white,” she said from the podium in the drab chamber of Oakland’s city council. People of color “are tired of simply being employees.  When do they get an ownership piece of the pie?  That is what this is about.”....

Most jurisdictions consider cannabis businesses something between a nuisance and a threat, but the city government in perennially broke Oakland was quick to recognize the economic opportunity in legal pot.  It was an early jurisdiction to decriminalize adult use of marijuana, in 2004, and it became the first in the country to license medical marijuana dispensaries, also in 2004.  Harborside, which celebrated its tenth anniversary in October, was one of the first dispensaries to open in the city, and it helped pioneer the widely imitated idea that dispensaries should be clean, welcoming spaces, more like Apple stores than smelly, cramped head shops.  It now brings in a reported $30 million in annual sales and is an important Oakland taxpayer.  After the Justice Department initiated a case against the dispensary in 2012, Oakland took the unprecedented step of suing the federal government on behalf of a cannabis business. (The Justice Department dropped its case earlier this year.)...

As legalization has spread, other jurisdictions have recognized the moral urgency of creating diversity in the industry.  So far, none has succeeded.  This past summer, Maryland issued its first 30 medical marijuana business licenses, but the process was thrown into disarray once it became clear that none had gone to a woman or an African American.  It’s a “very complex problem,” the head of Maryland’s cannabis commission told The Baltimore Sun.  Time sensitive, too, since the established companies are getting bigger and richer.  Ohio’s medical marijuana law reserves 15 percent of business licenses for minority owners, but this aspect of the law immediately came under legal scrutiny and the program has yet to become operational.

http://lawprofessors.typepad.com/marijuana_law/2016/12/can-oakland-a-new-capital-of-legal-weed-undo-the-injustices-of-the-war-on-drugs.html

Business laws and regulatory issues, History of Marijuana Laws in the United States, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate | Permalink

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