Ensuring Cannabis Equity Through Shared Ownership

Policy Brief Ensuring Cannabis Equity Through Shared Ownership

Executive Summary As New York State integrates legal adult use of cannabis into the economy, there is an opportunity from the outset to direct the benefits of this economic activity to support communities most impacted by criminalization. The research and recommendations outlined here highlight mechanisms for ensuring cannabis businesses thrive in disinvested communities, especially through shared ownership. New York State should take steps to support and advantage worker-owned cannabis businesses through preferential licensing and procurement policies, as well as financing and technical assistance, in order to create pathways for all New Yorkers to enter this emergent industry.

Introduction: The Legalized Environment A once-in-a-generation cultural and economic moment is developing before our eyes, and quickly. After decades of advocacy and organizing, in the historic November 2020 election, New Jersey, Arizona, Montana and South Dakota voters chose to legalize adult use of marijuana, joining 11 states plus Washington, D.C. that have already done so.

In January 2021, Governor Andrew Cuomo announced a proposal to both legalize and create a social equity program for communities that have been disproportionately impacted by the War on Drugs during his State of the State address, in advance to the 2021 state legislative session. 1 At the federal level, Senator Chuck Schumer, now the Senate Majority Leader, along with Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), announced a plan in February 2021 to release a federal marijuana legalization proposal in

Ensuring Cannabis Equity Through Shared Ownership

The opening of this multi-billion dollar industry presents a tremedous opportunity to build economic stability in ways that benefit all New Yorkers.

1

the early part of 2021 that would include a restorative justice component. 2 The rapidly increasing momentum for cannabis legalization and the opening of this multibillion dollar industry presents a tremendous opportunity to build economic stability in ways that benefit all New Yorkers. Using estimates for legal market demand and the Governor’s proposed tax structure, we estimate that recreational marijuana State tax revenue would be $159 million in FY 2023, rising to $765 million in FY 2027. The Governor’s proposal to apply the sales tax to adult-use cannabis sales will generate an estimated $25 million in local sales taxes in FY 2023, rising to $114 million in FY 2027, and the legislature’s excise tax flowing to local governments would provide an estimated $23 million in FY 2023 and $104 million in FY 2027. 3 Sales and tax revenue from marijuana in states where data is available are exceeding initial estimates, and regulated marijuana has already shown to create thousands of jobs. 4 This significant new revenue source has the potential to fortify economically vulnerable communities, redirecting their trajectory through an equitable approach to growth.

Particularly given the Covid-19-damaged economy and the pronounced adverse impact sustained in urban communities of color and among Black-owned businesses, the economic and employment impacts of legalizing recreational-use marijuana are significant. However, without a strong equity agenda in place from the outset, those who paid the drug war’s biggest costs—such as severely limited employment and educational opportunities as a result of overpolicing

Ensuring Cannabis Equity Through Shared Ownership

Recommendations at a Glance*

1.

Decrease barriers to entry

2.

Cap licenses for large

3.

Allow a vertical integration

businesses

exception for certain cooperatives and microbusinesses

4.

Facilitate access to capital

5.

Require training

and real estate investment

and employment of

disadvantaged groups 6.

Leverage forfeited assets for marijuana equity programming

* See page 7 for details of each recommendation.

2

and mass incarceration—are unlikely to experience the economic benefits. An important lesson learned from other states where marijuana has been legalized is that social equity programming must be robust from the outset, far-reaching and consistent in implementation at the local level to center the communities most adversely affected, and who have long been excluded from access to quality jobs and avenues for wealth creation as a result of systemic discrimination. New York is uniquely positioned to build the most progressive and comprehensive marijuana

especially with state-facilitated financing and technical assistance.

Imagine a new economy that is designed for community benefit and to right the wrongs of prohibition. Specifically centering black and brown communities--which have been most detrimentally impacted by the drug war--in all facets of legalization would bring about not just avenues for participation in the industry but restitution for harms done to communities as a but restitution for harms done to communities as a result of overpolicing and structural

New York can restore and revitalize disinvested communities that have suffered from criminalization.

social equity framework, learning and building from other states have implemented similar programs--the most progressive currently being Illinois’ Adult-Use Cannabis Social Equity Program. 5 New York already has the largest ecosystem in the United States supporting employee ownership and shared equity specifically focusing on lowincome communities of color. 6 We propose equity programming that centers community control and the establishment of workerowned businesses in detrimentally impacted communities, which New York State can support and advantage through preferential licensing and procurement policies, and

racism. By emphasizing shared ownership and community control through prioritizing cooperative business models, New York can restore and revitalize disinvested communities that have suffered from criminalization.

Further, such an emphasis can have a halo effect—as community control can sidestep the pitfalls and abuses stemming from unchecked corporate consolidation and a growth-at-anycost mentality, which has plagued sectors including tobacco, pharmaceuticals, and alcohol. By explicitly creating a robust social equity program that centers disproportionately impacted communities and emphasizes their control and shared ownership in the

Ensuring Cannabis Equity Through Shared Ownership

3

marijuana industry, New York can be a model for states pursuing legalization as well as at the federal level.

Who Stands to Benefit?

Companies that already have licensing through the New York State’s Medical Marijuana Program will be at an advantage as first movers once the recreational market is legalized. These organizations, which each have one manufacturing license and multiple dispensing licenses,7 may be grandfathered in under proposed legislation, but licensing fees associated with their being granted adult-use licenses would go to the equity incubator fund that would support equity applicant businesses.8 A major concern is that vertical integration will likely not be allowed for new applicants, leaving new entrants (especially smaller, locally-owned businesses from communities most damaged by the criminalization of marijuana) at a major competitive disadvantage. Among the 10

organizations with licenses under the Medical Marijuana Program, 8 out of 10 are publicly traded companies. There are no owners of color and only one (Etain, LLC) with a woman owner. Pharmacann, one of the two privately held ones (Etain being the other), is one of the largest private cannabis operations in the U.S.9 Most of the current licensees operate in other states that have legalized adult recreational use of marijuana. These licensing outcomes are not surprising, as medical marijuana license application requirements included a $10,000 non-refundable application fee and a registration fee of $200,000--significant financial barriers that all but excluded applicants from communities traditionally limited from accessing wealth-building mechanisms due to race and gender discrimination.10 An approach that privileges the most wellcapitalized, connected, and profit-driven businesses in the emergent cannabis industry will undoubtedly facilitate greater economic and social inequity. In pushing forward social equity as a key principle in marijuana legalization, New York would be remiss to replicate the calamitous results of private sector domination by a few corporate entities. The pharmaceutical industry tells a cautionary tale--with billions of dollars of profit spread across a handful of companies11 and a ruthless approach that has contributed to contemporary public health crises such as the opioid epidemic.12 The possibilities for disproportionate benefits to a handful of wellcapitalized companies are already obvious, with venture capital firms and established tobacco, alcohol, and pharmaceutical corporations (Novartis and Altria, amongst others) deeply invested in marijuana companies in anticipation of its legalization. Without thoughtful policies and

Ensuring Cannabis Equity Through Shared Ownership

4

implementation that emphasize and explicitly include equitable economic development as a core part of legalization, these well-resourced entities--especially those with an existing foothold through medical marijuana licenses that could be grandfathered into vertical integration---would stand to gain the most, as existing recreational marijuana markets are unfortunately already showing.

Equity and Inclusion, a Continuing Struggle Prohibition has resulted in disproportionate criminalization in communities of color, despite surveys consistently showing the parallel rates of marijuana consumption across racial demographic groups nationwide.13 In New York State, 80 percent of the people arrested for marijuana possession during 2019 were people of color; 49 percent were Black and 27 percent were Hispanic, while 20 percent were white.14 An NYCLU compilation of statewide arrests between 2000-2018 found that Black people were 14 times as likely to be arrested than whites for marijuana-related offenses, and Hispanics 7 times more likely than whites to be arrested.15

owners and founders from 2017 showed 81 percent of them are White, with a mere 4.3 percent identifying as African-American.17 This disparity reflects broader statistics on business ownership as well as the racial wealth gap: only 16.7 percent of U.S. businesses were owned by people of color in 2012, and while African-Americans made up 12.6 percent of the country’s population, African-American-owned businesses accounted for just 2 percent of all businesses.18 To address this gap, multiple states where marijuana is legalized for recreational use have introduced regulatory and programmatic equity initiatives--including California, Illinois, and Massachusetts, Colorado, and Michigan.19 Some, like Illinois, introduced comprehensive social equity programming from the onset of legalization. Others, like Colorado, did not address social equity at the outset but implemented social equity programs after calls to diversify a cannabis ownership base that is disproportionately white, male, and economically advantaged.20 These burgeoning

As the market for adult use of cannabis opens, communities that have been most adversely affected by prohibition are being left out of this “green rush.”16 A Marijuana Business Daily survey of 389 marijuana business

Ensuring Cannabis Equity Through Shared Ownership

As adult use of marijuana opens up, communities that have been most adversely affected by prohibition are being left out of this ‘green rush.’

5

equity initiatives are impressive in their aims and emphasize giving priority to applicants with marijuana-related convictions or residency in a heavily policed area, representing communities that are disproportionately low-income and Black, indigenous and people of color (BIPOC).

Equity considerations include but are not limited to: rent-free space, waived fees, prioritized application review for licensing and permitting processes, capital and technical assistance, and microbusiness licensing. However, these social equity programs have been uneven in their development and implementation, especially at the local level.

funding, and limited oversight to ensure equity provisions are being appropriately implemented. A foundational element of the Oakland program is a one-for-one licensing requirement reserving 50 percent of licenses for equity applicants.

Well-capitalized general applicants who partnered with equity applicants—committing to providing incubation and technical assistance—would receive licenses first. Additionally, the City earmarked $3.4 million, seeded through cannabis tax revenue, for zero-interest loans of up to $100,000 per business for equity licensees.23 Unfortunately, program implementation yielded unsatisfactory results at the outset,

Equity initiatives... highlight crucial considerations that need to be addressed in order to bring wealth and opportunity to communities adversely affected by marijuana prohibition.

As an example, the California Cannabis Equity Act of 2018 establishes licensing preferences, reduced fees, technical assistance, and financing available for social equity applicants from disproportionately impacted communities.

The social equity program also relies heavily on local jurisdictions to define eligibility and implement programming.21 As a result, social equity programs vary widely based on municipality.22 The Oakland cannabis equity program, initially looked to as a model, experienced struggles related to its staffing,

with delayed disbursement of the zero-interest loans, as they were dependent upon the collection of tax revenue for seeding. Cannabis business attorney Sylvia Chi noted long waits for licenses and a lack of dispute resolution mechanisms—citing bad faith partnerships where general licensee incubators gave equity partners less viable or unusable space (such as bathrooms), did not prepare infrastructure for an on time move-in, or replaced their initial equity partners with new ones. There is no

Ensuring Cannabis Equity Through Shared Ownership

6

recourse for these actions since the program only requires that the general licensee has an equity partner; it does not specify that it be the same equity partner that they originally partnered with for license fast-tracking.

Learning lessons from its predecessors, Illinois incorporated strong equity provisions as integral to the Cannabis Regulation and Tax Act of 2019--considered the most comprehensive and wide-ranging to date. The legislation includes the establishment of a Social Equity Cannabis Fund and a Recovery, Reinvest, Renew (3R) program directed towards disproportionately impacted communities. 24 Access to supports include technical assistance, reduced license and application fees, access to low-interest loans, and preferential licensing incentives.

The law went live in January 2020, and over 4500 applications were received for the first 75 dispensary licenses--with those meeting social equity criteria prioritized. 25 Ninety-seven percent of all applicants qualified as social equity applicants .26 Illinois’s legislation has been praised as being the most progressive and thoughtful with regards to measuring impact on barriers to date.

Yet, there have been bumps in the road in implementation, with concerns raised over issues relating to amending rejected applications and criteria that still made it difficult for applicants from low-income, minority, and formerly arrested or incarcerated entrepreneurs to apply. 27 Illinois’s social equity criteria is set up to be race neutral in order to stand up to legal challenges that have threatened or slowed down social equity

programs with more explicit racial equity aims.

One consequence is that BIPOC applicants that have never been arrested or do not currently live in disproportionately impacted areas would not qualify under the current criteria.

In addition, the COVID-19 pandemic slowed down the issuance of new retail, craft cultivator, and infuser licenses substantially. This left the recreational cannabis market in the hands of medical marijuana companies that were able to smoothly transition to adult-use sales upon launch, giving them a healthy head start.

Social Equity Through Ownership Equity initiatives, though established and implemented with mixed results, highlight crucial considerations that need to be addressed in order to bring wealth and opportunity to communities that have been adversely affected by marijuana prohibition. New York can learn from these programs, which seek to account for the lasting effects of criminalization by reducing barriers to entering the market and redressing harms, while addressing their shortcomings to become a national progressive model for marijuana equity.

A critical element of an effective equity initiative is lifting up shared ownership through cooperative businesses to unlock opportunity and root

Ensuring Cannabis Equity Through Shared Ownership

7

wealth creation in disproportionately impacted communities. Where shared ownership forms, especially worker cooperative businesses, have been used to support economic development, they have been vehicles for greater social equity—at the employee, firm, and community level.

Democratically-managed, worker-owned small businesses have a history as a powerful tool for working people to access business ownership, create better jobs, and build wealth in their communities. These businesses operate explicitly for the benefit of their working members, and the results are clear: median household net worth is 92% higher for employee-owners, who have 33 percent higher median income from wages and whose median job tenure is 53 percent higher than the average employee.28 More than 50 percent of worker cooperatives in the U.S. are owned by people of color and immigrants, and 60 percent of worker cooperatives are owned by women.29 In New York City, 76 percent of worker-owners are women of color, and 70 percent of workerowners are immigrants, due to the emphasis on developing worker cooperative businesses in traditionally low wage sectors within communities like the Bronx and south Brooklyn.

In a worker-owned business form, profits go directly to the workers—and stay in the local economy. Jobs at worker cooperatives tend to offer extensive training and opportunities for skill-building, and greater participation than conventional companies. Many provide aboveaverage compensation and benefits, though this varies by industry. With a typical pay differential of 2-to-1 between management and floor workers (as compared to the average corporation, which

has a CEO-to-worker pay ratio of 303-to-1),30 many worker cooperatives tend to have longer than average small business longevity and lower turnover.

New York City is home to Cooperative Home Care Associates (CHCA), the largest worker cooperative in the U.S. at 2000 workers, the majority of whom are Black and Hispanic immigrant women. Since 1985, CHCA has influenced the home health care industry through higher wages, benefits, intensive training, participatory leadership, and union membership.

They surpass industry standards, improving the quality of jobs and services, benefiting providers and recipients of care. CHCA’s cooperative form is the embodiment of their commitment to quality jobs and quality care for their community.

Worker cooperative businesses are also thriving in other parts of New York as well, especially as a growing wave of retiring business owners are selling their businesses to their employees rather than simply closing the doors, and in so doing keeping local businesses running and retaining

Ensuring Cannabis Equity Through Shared Ownership

8

jobs. Many of the “cooperative conversions” are in the retail sector, and still more are involved in farming and food production, creating natural synergies and potentially relevant models for worker-owned cannabis businesses. Some of New York worker cooperative businesses that can provide such a roadmap include the following: •

Ward Lumber – Jay, New York

•

Railroad Avenue Supply Company – Stamford, New York

•

Random Harvest Market – Craryville, New York

•

Earth Designs Cooperative – Rosendale, New York

•

Rock Steady Farm and Flowers – Millerton, New York

•

Letterbox Farm Collective – Hudson, New York

•

Breadhive – Buffalo, New York

•

Small World Food – Rochester, New York

•

Once Again Nut Butter – Nunda, New York

International cooperative ownership models and policies provide helpful examples of how social equity can be effectively integrated into economic development policies. Worker cooperatives have played a critical role in revitalizing and creating resilience in economically distressed communities—whether in Quebec, the Basque Country in Spain, or the Emilia-Romagna region of Italy. In Emilia-Romagna, the over 8,000 small to medium-sized cooperatives are market

leaders, covering more than one-third of the retail trade and agro-industrial markets.31 One of the 10 largest firms in Spain is a worker cooperative, the Mondragon Cooperative Corporation. With over 60 years of operation and 261 companies, it attributes its success to a high level of worker involvement and reinvestment of practically all resources generated, resulting in a high level of local economic benefit and contributing to the Basque region’s low level of unemployment compared to the rest of Spain.32 In recognition of contributions of cooperatives to the general public, several European countries use taxexempt reserves to incentivize cooperatives for growing jobs and stabilizing income.33 In addition, a subset of worker cooperatives, called social cooperatives, exist in part to integrate members of designated socially disadvantaged groups into the workforce. In Italy, that means at least 30% of workers have physical or learning disabilities, have or have been treated for mental illness or drug or alcohol addiction, or are currently or have been imprisoned. The European definition for disadvantaged also includes longterm unemployment, being over 50, single parenthood, and immigrant identity.34 Social cooperatives may include multiple stakeholders, including workers, community members, and non-profits. In the context of marijuana justice, social cooperatives offer a working model in which to support and develop businesses that successfully integrate the formerly incarcerated directly impacted by marijuana prohibition.

Ensuring Cannabis Equity Through Shared Ownership

9

Recommendations The following recommendations highlight the need for community ownership, with a preference for worker-owned models for cannabis businesses in disinvested communities, with robust guidance at the outset in state marijuana equity legislation and implementation. New York state and local governments can play a key role

as a means to close racial wealth gaps, build sustainable local economies, and provide restitution.

Also included within the recommendations is a proposal for redirecting forfeited assets related to drug trafficking—including money

New York state and local governments can play a key role to ensure equity through financing, procurement, licensing, and contracting practices.

to ensure equity through financing, procurement, licensing, and contracting practices, particularly with regards to ancillary businesses and small and local growers who need support in the face of well-capitalized, multinationalbacked competitors. The equity incubator fund proposed from licensing fees associated with existing medical marijuana entities being granted adult-use licenses is an important start. Our recommendations emphasize the importance of centering worker cooperative businesses led by and based in communities of color most impacted by marijuana overpolicing

laundering—to community reinvestment initiatives for equity, in the form of zero-interest loan funds and grants for entrepreneurs from communities most impacted by prohibition. This mirrors existing social equity legislation and programming in Italy that channels property and funds from mafia asset forfeiture for social cooperatives in disadvantaged communities, particularly those that have suffered the most from organized crime, and functions as a form of community restitution for economic and social harms that they have experienced. 35 36

Ensuring Cannabis Equity Through Shared Ownership

10

1. Decrease barriers to entry for small and medium sized entrepreneurs, emphasizing worker cooperatives and minority/women-owned business enterprises (MWBEs) The vast majority of New York state medical marijuana licensees that will immediately benefit from adult-use sales are corporate entities that are publicly traded. In contrast, 99.9% of minority-owned businesses are small businesses with limited access to capital and training---disadvantages exacerbated by wealth and resource gaps in communities of color and the barring of federally regulated banking institutions from engaging with cannabis businesses. 37 Social equity supports that decrease barriers to entry may include zero-interest loans, subsidized technical assistance and training for businesses that qualify as small and medium sized businesses under state law, especially those with Minority and Womenowned Business Enterprise (MWBE) status and worker cooperatives.

first movers in other states. Leveling the playing field can include capping adultuse large business licenses to those who have existing medical marijuana licenses; giving preference for fast-track licensing with worker-owned businesses, especially cannabis testing laboratories, which the executive director of the state Office of Cannabis Management has discretion to mandate and contract with. Institute preferred contracting and procurement quotas for worker-owned ancillary businesses, such as state contracts for video monitoring, compliance, and seed-tosale traceability.

3. Allow a vertical integration exception for certain cooperatives and microbusinesses

2. Cap licenses for large businesses and give preference to worker-owned businesses in licensing and contracting Policymakers must be cognizant of licensing concerns that have slowed down the ability of small, local, minority-owned businesses from effectively catching up to corporate

Ensuring Cannabis Equity Through Shared Ownership

Big businesses with existing medical marijuana licenses are expected to be grandfathered into new legislation that otherwise bans vertical integration, yet another advantage that they will have as first movers. Exceptions to a vertical integration ban should also be made for: (a) microbusinesses (in California, this is defined as cultivation of 10,000 sq ft or less of cannabis flower, plus manufacturing, distribution, and/ or retail of the product), and (b) a second level distribution and/or multi-stakeholder cooperative made up of cooperative business members working elsewhere in the value chain (cultivation, processing, or retail). This creates advantages for cooperation among

11

cooperatives, an internationally-recognized cooperative principle, and a means of amplifying the social and economic impact of cooperatives.

for at least a generation and especially in BIPOC communities. Institute and incentivize workforce training, recruitment, employment, and cooperative entrepreneurship programs that prioritize members of communities that have been most adversely and disproportionately impacted by the drug war, including and especially those formerly incarcerated for marijuana-related offenses.

4. Facilitate access to capital and real estate development for worker-owned businesses Worker-owned businesses currently face barriers to accessing capital due to the unfamiliarity of traditional financial institutions with the model, which will be compounded by financing difficulties as marijuana-related businesses, as federal regulations limit participation by banks, credit unions and Community Development Financial Institutions. State Senator Jamaal Bailey has previously introduced legislation supporting cooperative conversion financing for microbusinesses through Empire State Development Corporation, which passed the State Senate and Assembly.38 New York state and municipalities should offer and back preferred loans, lines of credit, and real estate development financing to worker cooperatives in the cannabis industry, helping ensure competitiveness in an already unequal playing field.

6. Reform civil asset forfeiture laws and redirect existing forfeited assets for marijuana equity programming

5. Require employment of disadvantaged groups, especially formerly incarcerated individuals Marijuana overpolicing and the failed war on drugs has directly resulted in widespread community disinvestment and wealth loss

Ensuring Cannabis Equity Through Shared Ownership

Asset forfeiture reform is a critical part of marijuana equity. The Comprehensive Drug Abuse Prevention and Control Act of 1970 allowed for the seizure of drugs and drug equipment by the U.S. government, and in the years since, law enforcement agencies have increasingly used asset forfeiture to bolster their budgets.39 Minor drug offenses and arrests can lead to asset forfeiture, even if there is no criminal charge, resulting in disinvestment and economic extraction that directly impacts overpoliced BIPOC communities.40 At the state level, existing asset forfeiture from trafficking and related crimes such as money laundering that would otherwise go to state and local law enforcement should be redirected to fund a marijuana equity program immediately upon cannabis legalization, instead of relying on tax revenue to come in months after legalization.

12

About The Democracy at Work Institute

The Democracy at Work Institute (DAWI) works to expand the worker cooperative model to reach communities locked out of good jobs and business ownership opportunities, espcially BIPOC, immigrant, and low-wage workforeces. DAWI is a movement-based think-and-do tank supporting worker cooperatives to grow to a scale that creates meaningful change in the economy.

This policy brief was authored by Anh-Thu Nguyen, Director of Special Partnerships at DAWI. It was designed by Julian McKinley, Senior Director of Communications at DAWI. Learn more about DAWI and worker ownership at institute.coop.

Ensuring Cannabis Equity Through Shared Ownership

13

Notes 1.

“Governor Cuomo Announces Proposal to Legalize and Create an Equitable Adult-use Cannabis Program as Part of the 2021 State of the State,” New York Governor’s Office, 6 January, 2021, https://www.governor.ny.gov/news/governor-cuomo-announces-proposal-legalize-and-create-equitable-adult-use-cannabis-program-part

is $36,100 and $165,500, respectively. Butta, Neil, Chang, Andrew C., Dettling, Lisa J., and Hsu, Joanne W., with assistance from Hewitt, Julia, “Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances,” https://www.federalreserve.gov/econres/notes/feds-notes/ disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-20200928.htm

2.

“Booker, Wyden, Schumer Joint Statement on Cannabis Reform Legislation,” United States Senate Committee on Finance, 1 February 2021, https://www.finance.senate.gov/ ranking-members-news/-booker-wyden-schumer-joint-statement-on-cannabis-reform-legislation

11. Paavola, Alia. “14 Pharma Companies Post Q3 Profits over $1B.” Becker’s Hospital Review, 12 Nov. 2018, www.beckershospitalreview.com/pharmacy/14-pharma-companiespost-q3-profits-over-1b.html

3.

“Booker, Wyden, Schumer Joint Statement on Cannabis Reform Legislation,” United States Senate Committee on Finance, 1 February 2021, https://www.finance.senate.gov/ ranking-members-news/-booker-wyden-schumer-joint-statement-on-cannabis-reform-legislation

12. Van Zee, Art. “The Promotion and Marketing of OxyContin: Commercial Triumph, Public Health Tragedy.” National Center for Biotechnology Information, Am J Public Health, Feb. 2009, www.ncbi.nlm.nih.gov/pmc/articles/PMC2622774/ 13. The War on Marijuana in Black and White. New York: American Civil Liberties Union, 2013. https://www.aclu.org/files/ assets/aclu-thewaronmarijuana-rel2.pdf

4.

From Prohibition to Progress: A Status Report on Marijuana Legalization. New York: Drug Policy Alliance, 2018. http:// www.drugpolicy.org/sites/default/files/dpa_marijuana_legalization_report_feb14_2018_0.pdf#page=23

14. Cheney, Brendan. “Racial Disparities Persist in New York City Marijuana Arrests,” POLITICO, 13 Feb. 2018, www. politico.com/states/new-york/city-hall/story/2018/02/13/ racial-disparities-continue-in-new-york-city-marijuana-arrests-248896

5.

Illinois Adult-Use Cannabis Social Equity Program,” 2 February 2021, https://www2.illinois.gov/dceo/CannabisEquity/Pages/ default.aspx

15. Arrests with PL 221 (Offenses Involving Marijuana) as Top Charge, by County, by Race for New York State: 2000-2018 DCJS Data, https://www.nyclu.org/sites/default/files/field_ documents/marijuana_stats.pdf

6.

“New York City Worker Cooperative Business Development Initiative,” 2 February 2021, https://www1.nyc.gov/nycbusiness/article/worker-cooperatives

7.

“Medical Marijuana Program - Registered Organization Locations.” Department of Health, January 2019, www. health.ny.gov/regulations/medical_marijuana/application/ selected_applicants.htm.

8.

9.

Bosworth, Lynelle K., Neer, Katharine J., Sneed, India L., “Gov. Cuomo Proposes Legalization of Cannabis for AdultUse in New York State,” National Law Journal, 21 January 2021, https://www.natlawreview.com/article/gov-cuomo-proposes-legalization-cannabis-adult-use-new-york-state Miller, Susan R. “Publicly Traded Companies Dominate the New York Medical Cannabis Market,” New Cannabis Ventures, 21 January 2020, https://www.newcannabisventures.com/publicly-traded-companies-dominate-the-new-york-medical-cannabis-market/

10. In the 2019 Survey of Consumer Finances, nationally, White families have the highest level of both median and mean family wealth: $188,200 and $983,400, respectively. Black families’ median and mean wealth is less than 15 percent that of White families, at $24,100 and $142,500, respectively, while Hispanic families’ median and mean wealth

16. Krane, Kris. “Cannabis Attracts Big Tobacco, Alcohol, and Pharma. Which Big Industries Will Join Next?” Forbes, Forbes Magazine, 19 Dec. 2018, www.forbes.com/sites/ kriskrane/2018/12/19/cannabis-attracts-big-tobacco-alcoholand-pharma-which-big-industries-will-join-next/ 17. “Chart: Percentage of Cannabis Business Owners and Founders by Race.” Marijuana Business Daily, 14 Sept.

2017, mjbizdaily.com/chart-19-cannabis-businesses-owned-founded-racial-minorities/ 18. “2012 US Census Survey of Business Owners.” American FactFinder, United States Census Bureau, factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk 19. “Women and Minorities in the Cannabis Industry,” Marijuana Business Daily, 2019, https://mjbizdaily.com/wp-content/uploads/2019/07/women-and-minorities_FINAL.pdf 20. Schaneman, Bart, “Minority Cannabis Ownership Negligble in Colorado, but New Social Equity Law Aims to Spur Progress,” Marijuana Business Daily, 27 August 2020 https://mjbizdaily.com/minority-cannabis-ownership-negligible-in-colorado-but-new-law-aims-to-spur-progress/

Ensuring Cannabis Equity Through Shared Ownership

14

Notes 21. “Comparison of State Cannabis Social Equity Provisions,” National Association of Cannabis Businesses, 2020, https://f.hubspotusercontent30.net/hubfs/2796535/Final%20 NACB_Chart.pdf

33. Reynolds, Bruce J. “Indivisible Reserves: Some See Unallocated Equity as a Way Co-Ops Can Help Fortify Their Future.” Rural Cooperatives, vol. 80, no. 3, May 2013, pp.

11–15

22. Schaneman, Bart. “California’s Marijuana Social Equity Program, Rife with Corruption, Lives or Dies at Local Level,” Marijuana Business Daily, 23 July 2020, https://mjbizdaily. com/local-level-key-to-california-cannabis-social-equity-program/

34. Building solidarity and social innovation: the experience of Italian social co-operatives. Roma: Federsolidarietà, 1991. https://www.federsolidarieta.confcooperative.it/LinkClick. aspx?fileticket=hEuCbL6Oor8%3D&portalid=0

23. “City of Oakland - File #: 18-0571.” City of Oakland, oakland. legistar.com/LegislationDetail.aspx?ID=2969604&GUID=1C0E415E-3197-4922-AFCB-76455EC0CF05 24. Marijuana Policy Project, “New Illinois Legalization Bill Means Unprecedented Social and Criminal Justice Reform.” https://www.mpp.org/states/illinois/new-illinois-legalization-bill-means-unprecedented-social-and-criminal-justice-reform/ 25. Illinois social equity criteria have three pillars: If the applicant lives in a disproportionately impacted area; if the applicant has an arrest or conviction for a marijuana related offense; and if someone in the applicant’s immediate family has an arrest or conviction for a marijuana related offense.

See: “Illinois Adult-Use Cannabis Social Equity Program,” https://www2.illinois.gov/dceo/CannabisEquity/Pages/default.aspx 26. Ring, Bettina; Layne, Aubrey; Carey, Daniel; and Moran, Carey, “Impact on the Commonwealth of Legalizing the Sale and Personal Use of Marijuana,” Report to the Virginia General Assembly and Governor of Virginia, 30 November 2020, Appendix 15, https://www.wavy.com/wp-content/uploads/sites/3/2020/11/Final-Report-on-Marijuana-Legalization-11.30.20.pdf 27. Quinton, Sophie, “Black-Owned Pot Businesses Remain Rare Despite Diversity Efforts,” Stateline, 15 January 2021, https://www.pewtrusts.org/en/research-and-analysis/blogs/ stateline/2021/01/15/black-owned-pot-businesses-remain-rare-despite-diversity-efforts 28. Employee Ownership: A Triple Win Solution. Oakland: Democracy at Work Institute, 2018. https://institute.coop/ resources/employee-ownership-triple-win-solution 29. State of the Sector, The Democracy at Work Institute, 2020 30. 2017 State of Worker Cooperatives in the U.S. Oakland: Democracy at Work Institute, 2018. https://institute.coop/ resources/2017-worker-cooperative-state-sector-report

35. Mignemi, Niccolò, and Fabrice Rizzoli. “Social Redistribution of Confiscated Mafia Assets in Italy: from Mafia Informal to Civil.” European Alternatives, FLARE France, 29 June 2014, euroalter.com/wp-content/uploads/2014/06/Fabrice-Rizzoli-EN.pdf 36. Since 1996, Italian law has allowed for the confiscation of assets from the mafia system and assignment “to the public community that suffered consequences of illicit behaviours and that represents the original owner of these assets. In cases when a seized company can be “rented”, the legislative decree requires payment, except worker cooperatives are to get access for free.# Furthermore, the decree provides economic incentives for employees of confiscated companies who decide to establish a worker cooperative.

See also, Illicit Assets Recovery in Italy. Milano: Transparency International Italia, 2013. http://www.confiscation.eu/ site/wp-content/uploads/2014/02/NationalReport_TI-IT_EN_ Illicit_Assets_Recovery_in_Italy.pdf 37. Esposito, Nora, “Small Business Facts: Spotlight on Minority-Owned Employer Businesses,” U.S. Small Business Administration Office of Advocacy. May 2019. https://cdn. advocacy.sba.gov/wp-content/uploads/2019/05/31131339/ Small-Business-Facts-Spotlight-on-Minority-Owned-Employer-Businesses.pdf 38. NY State Senate Bill S2176, “Relates to the creation of micro-business worker cooperatives upon transfer of ownership,” 2019-2020 NY State Legislative Session https://www. nysenate.gov/legislation/bills/2019/s2176 39. “Asset Forfeiture Reform.” Drug Policy Alliance, www.drugpolicy.org/issues/asset-forfeiture-reform 40. “O’Brien, Josh, “Upstate NY Police Seize $8.5 million in Assets a Year Without Having to Prove a Crime,” Syracuse. com, Updated 22 March 2019, https://www.syracuse.com/ crime/2016/01/police_use_federal_law_to_snag_assets_ without_having_to_prove_a_crime.html

31. Negri Zamagni, Vera, and John Duda. “Learning from Emilia Romagna’s Cooperative Economy.” TheNextSystem.org, 18 Feb. 2016, thenextsystem.org/learning-from-emilia-romagna 32. “FAQs.” MONDRAGON Corporation, www.mondragon-corporation.com/en/co-operative-experience/faqs/

Ensuring Cannabis Equity Through Shared Ownership

15