The measure would deliver real money to people harmed by the Drug War, but its cannabis licensing set-asides are unlikely to benefit many victims.
By Khurshid Khoja, Greenbridge Corporate Counsel
The newly introduced “Comprehensive Cannabis Legalization and Regulation Act of 2023” in Washington, D.C. is a welcomed and necessary turning point in our nation’s on-going debate on cannabis policy and social equity.
The measure proposed to the D.C. Council last week would pay cash restitution to “residents who were arrested, convicted, or incarcerated for a cannabis-related offense in the District prior to March 27, 2015,” or their spouses or children. Most other jurisdictions with legalized cannabis have adopted social equity measures that only offer priority and assistance in the award of cannabis business licenses, a solution that doesn’t benefit the vast majority of individuals who paid criminal penalties for cannabis — there simply aren’t enough licenses available.
D.C.’s measure would also deliver real money, not just a speculative and highly risky business opportunity, to individuals who were unjustly victimized and impoverished by War on Drugs policies—policies that routinely violated constitutional guarantees of equal protection.
However, D.C.’s proposed move is not without significant flaws, including a continued bias towards the preferential award of cannabis business licenses as a means to make amends for the government’s drug war abuses. These licensing set-asides seldom benefit the overwhelming majority of those formerly arrested, convicted or incarcerated for cannabis offenses, assuming these individuals would even view a cannabis business license as fair recompense in the first place.
Even if such individuals were inclined to obtain a license, that is not the only formidable barrier to entry into the cannabis industry (which include federal illegality, limited access to banking, the scarcity of real estate in “green zones,” increased risk of armed robbery, and the high costs of regulatory compliance, among others).
Additionally when social equity licensing qualifications are defined broadly to include those who have never suffered criminal penalties for cannabis offenses (or had a family member that has), the odds of winning a license winnow away even further.
And all of this assumes that the federal courts won’t simply invalidate any social equity licenses granted to formerly incarcerated cannabis offenders, on the basis of unconstitutional residency requirements burrowed in the qualifications. This outcome isn’t unlikely, based on the numerous preliminary injunctions granted by federal courts across the country in recent months.
If the underlying principle of social equity policies is to have government make amends for the Drug War, then it stands to reason that any initiatives to redress past harms must include narrowly tailored measures to make the people it harmed most—those who were actually paid criminal penalties—financially whole again. D.C.’s bill does just that by awarding cash payments of between $5,000 and $80,000 (though it also includes a social equity licensing program with residency criteria that are the subject of the above-mentioned constitutional challenges).
But D.C.’s new bill also sunsets reparations payments after only 10 years, while maintaining continuous tax-funded financial support for licensed cannabis businesses which are at least 50 percent social equity applicant-owned—many of which could lawfully even be joint ventures of publicly traded corporations with multistate cannabis enterprises. Given that social equity has been lauded as a means to creating “intergenerational wealth” for victims of cannabis prohibition, sunsetting restitution payments while continuing grants and loans to support to profit-generating enterprises is a misalignment of priorities.
Instead D.C. should sunset financial support to businesses which are in fact Wall Street-backed joint ventures, in order to continue restitution to qualified recipients beyond ten years in order to actually benefit subsequent generations of their families.
D.C.’s measure also funds reparations through an excise tax on consumers, which fails to take account of the government’s culpability for the intergenerational poverty imposed on those criminally punished for cannabis and their families. D.C. should instead fund restitution through licensing and permitting fees, as well as any regular business income tax imposed on cannabis businesses, in order to demonstrate accountability—after all, consumers weren’t responsible for unjustly incarcerating anyone.
Finally, more thought needs to be given to the amount of restitution paid, and how that amount is ultimately calculated. Using monetary damage awards in wrongful arrest, conviction and imprisonment suits as a guide would be preferable to arbitrarily limiting the award of restitution to a five-figure number.
All of that said, the national discussion on social equity must not only include individual reparations, we must prioritize such relief over other forms of relief that are less narrowly tailored and thus subject to ongoing constitutional scrutiny. While D.C.’s bill is far from perfect, it’s a necessary step in the right direction.
Hopefully Congress will stop impeding the District’s path to delivering real equity.
Khurshid Khoja is the founder of Greenbridge Corporate Counsel and chair emeritus of the Board of Directors of the National Cannabis Industry Association. He has co-authored model social equity legislation for the Minority Cannabis Business Association.
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