The article below was originally written for Happy Monkey Magazine
BY: MICHAEL MALCOLM
Illinois promised it would be different.
Illinois said it had learned from the failures of other social equity programs around the country. Illinois said its social equity program would be the blueprint for all social equity programs moving forward.
Sadly, none of those things came true and Illinois has only itself to blame.
Illinois had already given its medical cannabis industry away to a small group of super rich finance people as soon as it launched. That decision monopolized the medical market and blocked any regular Illinois residents from entering it. Then Illinois doomed its social equity program before it even got started.
The first mistake was the state put strict caps on the number of social equity licenses being issued. This all but guaranteed there would be no equity in its social equity program.
Illinois had the opportunity to create a market of abundance by not capping the number of licenses being issued. This would make it easier for people to get into the legal cannabis industry and allow the free market pick winners and losers.
If you want equity to have a chance to succeed in an industry, you have to let the most people in to participate in that industry. If you want to make a few people rich in an industry, you put a strict limit on the amount of people who can participate in that industry.
Instead of making the market accessible and abundant, Illinois created a market of scarcity by making sure only a small number of people would get new licenses. This artificially drove up the value of the license itself and the costs it took to apply for the licenses because social equity applicants suddenly had to compete against “social equity” millionaires.
Which leads me to Illinois’ next largest failure. Who qualifies as social equity?
Typically, the idea of social equity is reserved for Black and Brown people who have been negatively affected by the “War on Drugs” or people who have been arrested for cannabis in the past. But in Illinois, almost anyone can qualify as social equity.
Two ways you can qualify in Illinois is if you have a criminal record for cannabis or if you lived in what has been determined by the state to be a “negatively impacted area” by the War on
Drugs five out of the last ten years.
The third way to qualify as social equity in Illinois, also known as the loophole, is if 51% of your company’s employees live in the predetermined “negatively impacted areas”. So basically ANYONE can qualify as social equity if they create a company and “hire” employees that live in those areas.
This makes the entire social equity program a joke. If anyone can easily qualify as a social equity applicant, then everyone will apply as a social equity applicate. That’s exactly what we’re seeing here in Illinois. Former police commissioners, millionaire restauranteurs, real estate moguls and even MSO executives are applying for licenses meant to help people harmed by the drug war.
To make matters even worse, the state is issuing social equity dispensary licenses before social equity cultivation licenses. So when social equity dispensary operators are finally awarded their licenses, they’ll be forced to buy products from the existing MSO medical operators to stock their shelves. And because small craft cultivators will take more time to come online, MSO products will continue to dominate the market for the foreseeable future.
That is not equity.
As someone who qualifies as a social equity applicant because I’ve been arrested for cannabis possession in the past, it’s disheartening to see how Illinois’ social equity program, which was thought to have so much promise in the beginning, is being rolled out.
But I hope states working on their own social equity programs learn from all the mistakes in the Illinois market. And maybe Illinois will learn from itself and do better moving forward.