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Pot in Seattle is too white: Social Equity in Cannabis Task Force shaping plan to create new opportunities in state’s retail marijuana industry

Owner Ian Eisenberg watches a 2016 protest targeting his Uncle Ike’s pot shop at 23rd and Union

By Melissa Santos / Crosscut.com

A plan to bring social equity to the state’s mostly white marijuana industry was delayed by COVID-19. Now, things are inching forward.

Even before this year’s Black Lives Matter protests, Washington state’s legal cannabis industry had a well-known problem with race.

About 4% of the state’s population is Black. But Black people have a majority stake in only 1% of Washington businesses that grow and process marijuana, according to the Washington State Liquor and Cannabis Board, while roughly 3% of retail cannabis shops are majority Black owned. Some remain skeptical of those figures and say the picture is actually worse.

So, when former basketball star Shawn Kemp opened a shop that was initially billed as Seattle’s first Black-owned cannabis dispensary, headlines followed.

Except Kemp’s store didn’t do anything to budge those statewide numbers. In fact, he owns only 5% of the store that bears his name — and the business is actually majority white owned. The communications firm that originally promoted the store as Seattle’s first Black-owned cannabis dispensary later said it shouldn’t have done so.

For many, the dustup once again highlighted the lack of diversity in the state’s legal pot industry and the need to fix it.


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“We have two white men tooting their horns about being the largest marijuana sellers in the state of Washington behind this Shawn Kemp store, and announcing at a press conference they would like to be the incubator and the mentors for licensees who will be Black,” said state Rep. Melanie Morgan, D-Parkland. “It’s not a good look.”

In March, state lawmakers passed a bill that they hoped would help improve representation in the state’s legal pot industry.

But like so many things, that work was delayed by COVID-19.

Now, a task force is finally getting off the ground to try and solve a longstanding problem: How to ensure communities that were heavily policed during the war on drugs can gain a foothold in the state’s legal pot market. The 18-member Social Equity in Cannabis Task Force held its second meeting in December.

The work ahead
The task force’s main job is to help shape a program to distribute unused marijuana retail licenses, of which there are about 35 in Washington state.

The idea is to award those licenses to people from communities that may have lacked the capital to get in on the ground floor of the state’s legal pot market — or, to people who hail from areas that historically have had high rates of arrests, convictions or imprisonment for marijuana offenses.

Applicants from high-poverty areas also would be eligible under House Bill 2870, the bill the Legislature passed in March. So would people who have been convicted of misdemeanor marijuana offenses or who have family members with such convictions.

But the Legislature left it to the task force to figure out specifics and grapple with some of the tougher questions. Among them:

  • What factors should be given the most weight when deciding who gets a license?
  • How to dole out $1.1 million per year in technical assistance grants to help people get their businesses off the ground?
  • What about people who moved out of historically Black neighborhoods years ago because of gentrification? Could they still qualify?
  • What about all the cities and counties that have banned marijuana businesses? Are applicants from those areas shut out of the process?
  • How do you prevent people who wouldn’t qualify for the program from partnering with someone who does, then buying the other person out?

Paula Sardinas, co-chair of the task force and a member of the state Commission on African American Affairs, said the bill the Legislature passed in March was just a starting point.

“The goal is to look at it now as a vehicle that, you know, we’ve got to add the tires to, we’ve got to customize … so that we can drive it to the final destination, which is equity for those with the greatest disparate impact,” Sardinas said at a 2020 task force meeting.

One study the task force reviewed found that between 1986 and 2010 in Washington state, Black people were arrested for marijuana possession 2.9 times as often as white people, even though white people reported using marijuana at higher rates. Latino people, meanwhile, were arrested for marijuana possession at 1.6 times the rate of whites.

Other studies have found similar racial disparities in marijuana arrest rates.

Because of that, the task force adopted guiding principles earlier this month talking about the need to address anti-Black racism specifically.


Morgan, the Democratic state representative from Parkland who is the task force’s other co-chair, said that doesn’t mean Latino people and other racial and ethnic groups won’t also benefit.

“Even though we have a focus on anti-Blackness, at the end of the day, we are trying to look at all communities of color, marginalized folks, everybody, to make sure they have the same access to this business,” Morgan said.

While the task force is chaired by two Black women, it also includes representatives from the state Commission on Hispanic Affairs, the cannabis industry, state agencies, the Legislature and community groups.

State officials have said that, from a legal standpoint, it’s difficult to craft a social equity program that focuses on race as a qualification, as opposed to other factors. That’s something else the task force may have to consider as it moves forward.

What happens next
The task force is supposed to deliver recommendations to the state Liquor and Cannabis Board about how to proceed with the social equity program. Factoring in delays caused by COVID-19, that should happen sometime in 2021, Morgan said.

Beyond those fundamental recommendations, however, the task force intends to consider broader issues in the marijuana industry, and perhaps suggest new laws that could help promote equity in the marketplace.

One of the major topics of discussion is whether the state needs to lift the current statewide cap on the number of marijuana retail stores, which would create more licenses that could be distributed as part of the social equity program.

There’s also talk of expanding the social equity program beyond retail licenses, to help people break into marijuana producing and processing. Marijuana growers and processors make up the largest share of the state’s licensed cannabis businesses.

Then there’s the issue of local bans and moratoriums. Right now, many of the unused retail licenses that could be used for the social equity program are allotted to cities and counties that have effectively blocked pot shops from opening. That means that even if someone wanting to open a shop there did get their hands on a spare license, it wouldn’t do them much good.

Rick Garza, the director of the Liquor and Cannabis Board, said his office is reaching out to local governments that banned marijuana businesses several years ago to see if officials there might have had a change of heart. His agency had also proposed allowing more retail shops overall throughout the state, but the idea didn’t make it into the social equity legislation that ultimately passed.

Right now, there are roughly 450 cannabis retail shops with active licenses in Washington.

Aaron Barfield, a leader of a group called Black Excellence in Cannabis, criticized the social equity task force as ineffective and a waste of time, since it only has the power to advise the Liquor and Cannabis Board and the Legislature, not implement changes on its own.

But Garza said the goal is to craft a program that will be truly effective at helping Black people and people of color enter the industry — a standard some social equity programs elsewhere have struggled to meet.

In Massachusetts, for instance, not a single applicant to the state’s social equity program had opened a pot shop as of March, four years after legalization, mainly because of onerous requirements set by local jurisdictions, Politico reported.

In Los Angeles, meanwhile, one company drew attention when it partnered with more than a dozen social equity applicants, using contracts that were criticized as predatory. That program also drew lawsuits for unrelated reasons, including over a first-come, first-serve system many applicants said was unfair.

“We want to get it right if we are going to put this together,” Garza said.

“…This is the beginning, so you can criticize it for not going far enough,” Garza said, “but it is how we get started in addressing social equity.”

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James Tehmeyer
James Tehmeyer
1 month ago

Get out of town Ike! We don’t want you!

Erica
Erica
1 month ago
Reply to  James Tehmeyer

Why don’t you want him James? Did he do something wrong?

The Ghostt Of Capitol Hill
The Ghostt Of Capitol Hill
1 month ago
Reply to  Erica

He definitely did. Harassing local business owners, physically assaulting people outside his shop. Yeah.

RWK
RWK
1 month ago

You might want to use the word “allegedly” in your comment.

Dirty Money Uncle
Dirty Money Uncle
1 month ago

This is great news! I’m sure Ian has made a killing off of the killings of 2020 and it never sat well to protest one white dude by giving all of my weed money to another white dude.

Tara
Tara
1 month ago

“About 4% of the state’s population is Black. But Black people have a majority stake in only 1% of Washington businesses that grow and process marijuana….while roughly 3% of retail cannabis shops are majority Black owned”

And this is tragic? There’s a mention of the high percentage of marijuana arrests of blacks but it fails to say whether the rest was solely based of position of marijuana. Often marijuana charges are a more minor charge that comes from a more serious criminal offense such as robbery.
Are the people getting the money going to be people who were directly affected by these laws? Or just anybody of the same skin color?

Michelle Reuter
Michelle Reuter
1 month ago
Reply to  Tara

Yea this story is a bunch of bullshit again another way for them to spin it…..the only reason more people dont get into the cannabis industry is because of all the red tape and the cost it is a minimum of 500,000 JUST TO START a company like that AND you cant use normal banks for it either…too white hahahaha fucking idiots…seriously media!! YOU ARE THE PROBLEM

James Tehmeyer
James Tehmeyer
1 month ago
Reply to  Tara

Seattle city population is close to 9% black when you include White Center and Skyway. And some surrounding towns even moreso like Renton and Kent and De Moines and Tukwila. I think it’s sad you bring up social inequality like crime numbers. Of course crime disproportionally against black people and minorities, it’s by design through a racist system! Shame on your post!

Rick
Rick
1 month ago
Reply to  Tara

Now if we only applied that same formula to, say, sports we could really erase racism!

Okay
Okay
1 month ago

This isn’t actual news. Nobody cares.

Ryan A
Ryan A
1 month ago

Support black-owned businesses! This story is a good illustration of how our “entrepreneurial” economy is stacked against people of color. The work of the task force seems daunting with all of the challenges of the cannabis marketplace and the competition of entrenched ventures like Ikes. But it’s also clear that our community wants to support black-owned businesses and I think we’re making progress in other sectors.

The Progressive Bubble
The Progressive Bubble
1 month ago
Reply to  Ryan A

By your logic White people should be operating more taxis, dry cleaners, convenience stores, and landscaping businesses.

People want to support good local business. Race should not be a factor in this. This article is stoking racial tensions that don’t exist, way to “start the healing”.

There are no laws on the books preventing any race from starting a business. Quit turning class issues into race issues.

Queen Sybilla
Queen Sybilla
1 month ago

Good lord. Is there anything more cringey than the fact Seattle has a “Social Equity in Cannabis Task Force?”

Trip Change
Trip Change
1 month ago
Reply to  Queen Sybilla

Yeah, the fact that people are taking them seriously.

Irwin M. Fletcher
Irwin M. Fletcher
1 month ago

How about an article to help those interested in the black community. Detail how to draft a business plan and a business proposal so one can approach investors and explain the cost of goods and margins and day-to-day store operations policies and procedures and why they should invest in this concept. The state grants will not be enough to get a store up and cranking in profitability. How about including an article that discusses how many sales will be needed in a month to be profitable. Most of the retail stores (there are over 400) are not profitable due to IRS tax code 280E. Help the community by teaching not by complaining.

Pjt
Pjt
1 month ago

The real issue here are the people who sit on the liquor and cannabis board and took kickbacks to get people licenses and the real issue is economic disparity because it takes $500,000 to get a brand to market it’s ridiculous!! Medical users can’t access products that they need to manage their chronic pain and health conditions. If you look at how the state treated medical marijuana users it’s a perfect example of why there’s only white males dominating the business.

Irwin M. Fletcher
Irwin M. Fletcher
1 month ago
Reply to  Pjt

FAKE NEWS PJT- can you reference that scenario / accusation? There was an initial lotto that required signed leases of qualifying property and the 1st round produced the majority of the licenses and the 2nd round was the medical shops that had been open since 2011. Didn’t need any license to open a medical shop. What and who was holding back people from opening a medical shop? A lease for 2k a month and a grower. Not hard and not expensive.

Jim98122x
Jim98122x
1 month ago

Wikipedia tells me 14% of Seattle’s population and 8% of Washington’s is Asian. Anybody wonder what % of weed stores are Asian owned? Will they look at that next? And why stop at weed stores? Are there “too many” nail salons run by Vietnamese women? Guess that’s next. Cringeworthy is right. Where’s the money for job training, child care, sheltered workshop mini-businesses, etc.? Talk about strange priorities.

Nick Schroeder
Nick Schroeder
1 month ago

I thought licenses were awarded through a lottery at least initially? If so how could there be racial enequety?

Aaron Barfield
1 month ago

Blacks were arrested at 4 times the rate of whites for cannabis in Washington but own less than 1% of this state’s multi-billion-dollar, regulated industry. The inequity is obvious to anyone willing to look. The Washington Liquor and Cannabis Board has hijacked an entire industry from the entrepreneurs who built it, using the police and DEA as their enforcers. The owner of Uncle Ike’s used his money and political influence to help create and maintain this situation to profit from the exploitation.