As the Maryland social equity cannabis application process unfolds, I've decided to address a pivotal concern that has historically deterred Black entrepreneurs from accessing ownership in the cannabis industry. In a previous article, I explored how U.S policies have been weaponized to destroy lives and instill fear and stigma within the Black community regarding cannabis. In this analysis, I’ll uncover the intricacies of a system marked by imperfections; revealing the dual narrative of its compelling allure toward ownership and its discouraging barriers to active participation.

To kick things off, let’s keep our attention on the state of Maryland. It's crucial to note that Maryland's previous attempts to cultivate a diverse ecosystem of medical cannabis businesses has been a failure. The first round yielded just one Black operator and later sparked a second round, which was fueled by a flurry of lawsuits, technical hiccups, delays, and scandals that further tarnished the industry's reputation. As Maryland executes a third round of recreational licenses, the question lingers: Can the state truly mold a landscape that fosters high-quality and inclusivity? 

Lottery System

To rectify past mistakes, the now Maryland Cannabis Administration (MCA) (previously known as the Maryland Medical Cannabis Commission) has gotten rid of the merit based application and has initiated lottery rounds of cannabis business license applications; a period where eligible candidates are chosen through unbiased and impartial methods for the allocation of a limited number of licenses.

The MCA began the application process with in-person technical assistant classes, online instructional courses, and grant opportunities openly available to applicants. Moreover, they've opened the door for 179 new licenses to be distributed across two lottery rounds to social equity applicants. Notably, the Administration has established specific criteria for social equity applicants, ensuring that a substantial 65% ownership stake is held by individual(s) who fulfill at least one of the statutory definitions of a social equity applicant;

• Residing in a disproportionately impacted area for at least five of the last ten years.
• Attending a public school in such an area for a minimum of five years.
• Spending at least two years at a four-year institution of higher education in Maryland, where at least 40% of attendees are eligible for a Pell Grant.

While these qualifications may seem diligent, they echo the cautionary experience of other social equity states who've produced deceptive results using the same lottery-based system.

Social Equity Predators

Maryland isn't alone in adopting a cannabis social equity lottery. States like Illinois, Missouri, and Arizona have implemented what they term a 'fair and equitable application process.' However, they fail to grasp the lottery system's susceptibility to manipulation.

Just recently, the Arizona Center for Investigative Reporting revealed a concerning development during the state's social equity cannabis lottery. Their investigation brought to light a disconcerting revelation: Multi-state Operators (MSOs) and well funded organizations proactively recruited numerous applicants from marginalized communities. In return for covering social equity application fees and operational expenses, these operators not only gained ownership but also exerted additional control, cleverly hidden within deceptive contracts. This strategy proved effective, resulting in 10 out of the 26 licenses being awarded to these well-funded MSOs.

In Arizona, applicants shared their experiences of feeling compelled to partner with MSOs just to compete in the existing market. They described grappling with contracts burdened by clauses that overwhelmingly favored the opposing party, as well as the difficulties associated with managing promissory notes that imposed significant constraints on their autonomy. Some local entrepreneurs believe social equity predators took advantage of the short timeframes imposed by cannabis governing agencies - rushing the process, leading to misunderstood terms.

On the other hand, experienced cannabis entrepreneurs like LaWann Stribling, the Founder of Strib’ble District, raised concerns about the very qualifications that have been established. In a recent interview with Herald Mail Media, Stribling pointed out, "Social equity goes beyond one's place of residence. Nobody is considering the families who have suffered from the incarceration of loved ones and do not reside in disenfranchised areas." The concern for qualification standards is not unique to Arizona or Maryland; it has also been raised in Missouri, where areas with significant Black populations are not categorized as disenfranchised zones, despite the disparity studies. 

For these reasons, numerous Black entrepreneurs are frustrated with the inability to secure state cannabis business licenses, which often opts them to bypass the process entirely and explore alternative avenues of ownership.

Business As Usual

Hemp entrepreneurs find themselves entangled in a battle unfolding within the cannabis and hemp industry, where compliance with existing laws is no longer a guarantee. Recently, the Cannabis Regulators Association (CANNRA) introduced a proposed bill to redefine hemp in a manner that would render numerous businesses non-compliant. However, Judge Brett R. Wilson provided aid to this turbulence, suspending a law which compelled CBD businesses in the state of Maryland to halt the sale of products containing THC levels exceeding the intoxicating threshold. This legal complication stems from the 2018 Farm Bill, which explicitly classifies hemp as having a THC content of 0.3% or lower, designating anything above this limit as cannabis.

This new legal provision would tilt the scales in favor of licensed cannabis companies, creating a monopoly and granting them the authority to provide an expanded array of cannabis products to recreational users within their exclusive domain. As a result, this law effectively phases out hemp businesses, preventing them from competing with licensed cannabis enterprises. Hemp farmers, processors, retail outlets, and CBD brands around the nation find themselves in the crossfire against the state in every sector of this wealth generating industry.

Disruptive Innovation

These actions serve as a grim extension of the prohibition era, systematically preventing Black entrepreneurs from accessing the vast opportunities for wealth creation and the advancement of alternative healthcare solutions, not just for themselves but for their legacy. I personally confronted this disheartening reality in 2019 when my cannabis application for a Maryland social equity license was denied. This setback served as a catalyst for CEED Inc and my departure from a system that clearly lacked the understanding of how to foster ownership for Black entrepreneurs. Out of these inequalities, barriers, and missed opportunities faced around the country, arose the Maryland Cannabis Equity Collective (MCEC); an organization built on a unified mission and dedication to offering knowledge, opportunities, and solutions that empower communities and legacy entrepreneurs affected by the War on Drugs. Given that this alarming trend appears to be the case across a majority of states, resulting in the mere 2% national ownership of cannabis businesses by Black entrepreneurs; it’s become evident that a new course of action is needed. One where the system is not just inclusive but engineered to empower and help us succeed.

Entrepreneurs like LaWann and members of the MCEC have ventured down a similar path, establishing successful cannabis brands without relying on interactions with the state. Yet, two important questions arise: How can entrepreneurs further ascend on the path to greatness? Better yet, how can those aspiring to own a piece of the cannabis industry, access the same level of support that states offer, including guidance, resources, tools for growth, opportunities, and a thriving market conducive to capital generation?

Discover how we're turning this vision into a reality in our next article – the future is closer than you think!

+ Bonus 

This news came out as I had finished writing this article but fits into the same scope of injustices we continue to face when participating within the system. Just when we believed the obstacles couldn't stack any higher, a new bill focusing on cannabis dispensary zoning in Prince George's County surfaced. This bill proposes limiting dispensaries to operate solely within industrial zones, which are traditionally designated for cultivation and manufacturing businesses due to their size and distance from residential areas. However, the implications for social equity license winners are significant: they'll contend with a stigmatized public perception, economic isolation from the broader community, and restricted customer access. This Bill moved forward on October 18, 2023, marking another setback for Black entrepreneurs striving to establish a foothold in the cannabis industry.