Portland Considers Giving Some Preference to Minority Applicants for Marijuana Retail Licenses

The City of Portland is considering giving preference to minority applicants when distributing retail marijuana licenses. This came up at the City Council’s last committee meeting on the draft ordinance, and city staff cautioned that this could be difficult to administer. After this conversation, I thought it would be worth looking briefly at how this has played out in other jurisdictions. 

There is no question that America’s "war on drugs" and the crackdown on marijuana disproportionately impacted black Americans and other minorities. This sad history is the impetus for the proposal in Portland, and proposals/laws in other jurisdictions. Here are four examples of how this has played out:

• In Maryland, there was no preference for minorities originally, but then nearly all of the licenses were awarded to white people and the state decided to try again. It increased the total number of licenses, and said it would give minority-owned businesses (and some other demographics) slight preference. That plan doesn’t seem to be playing out as envisioned; it is dragging on and on and on, amid multiple lawsuits alleging bias in the licensing process. 
• The Ohio legislature created a racial quota requiring 15% of all licenses to grow, process, and sell marijuana to be awarded to minority-owned and -operated companies. But state judges have said that law is unconstitutional. 
• In Massachusetts, the Cannabis Control Commission is limiting certain types of licenses to “economic empowerment and social equity applicants” along with "microbusinesses."  These include social consumption and delivery licenses. Exclusivity is planned for a period of years. These categories of licenses haven’t been awarded yet, so we will see how that process plays out. 
• The marijuana legalization law in Illinois (for adult use) includes a variety of provisions meant to expand opportunities for people of color and those “disproportionately impacted” by the war on drugs. But some are questioning whether this law will meet its goals since the adult use market launches this month, and for at least the first half of 2020 the only participants will be existing medical marijuana dispensaries which are almost entirely white-owned. It is not yet clear how many of the 75 licenses awarded later this year will actually go to demographics disproportionately impacted by the war on drugs. 

Maine does not have any such law at the state level, so we will wait and see how the Portland City Council deals with this issue moving forward.

Can We Use Commercial Cannabis to Address Historical Inequities?

Here in Portland, a number of City Councilors have been adamant that Portland’s adult use program should benefit minority communities. There is a current proposal to give historically disadvantaged groups some level of preference when applying for licenses. This mirrors a common sentiment nationwide that the adult use industry should benefit those communities historically disproportionately affected by marijuana-related prosecutions. 

Chicago has one interesting idea for how this could happen. Chicago’s Mayor Lightfoot has proposed a “social equity program” that would essentially create a co-op for growing adult use marijuana and allow minorities to invest through small cash investments or sweat equity. The Mayor has proposed using $15 million in municipal funds for this project. It would be interesting to see this play out, if it gets off the ground.