LANSING, Mich. – The first year of state-licensed recreational marijuana sales in Michigan saw $511 million of sales in recreational and $474 million in medical sales, generating over $100 million in tax revenue, but the state also found that the commercial marijuana industry drastically failed to attract minority business owners.
The Marijuana Regulatory Agency collected data in December that showed 79% of people interested in ownership of licensed marijuana facilities were white. Black people accounted for 3.8% while 1.5% were Hispanic or Latino.
In response, the agency’s Racial Equity Advisory Workgroup, comprised largely of people of color who are experts in equity programming, made recommendations that would create partnerships with large businesses and local municipalities to equip communities disproportionately impacted by marijuana being illegal until 2018.
According to Council on Criminal Justice, Black people were about five times more likely than whites in 2016 to be in state prison on a drug offense, which was down from 15 times more likely in 2000.
The history of people of color being arrested and prosecuted for marijuana-related offenses makes them less likely to be given opportunities to participate in the industry, workgroup member and attorney Barton Morris said. Though there’s work being done to reverse that damage, diversity in the industry hasn’t taken off.
Michigan doesn’t release demographic statistics of marijuana licensees so the exact number of minority owners is unknown. In order to address barriers for licensees or applicants of color, the workgroup is recommending a voluntary data collection survey to track and address challenges.
Christina Montague, who owns Huron View Provisioning dispensary in Ann Arbor, said she and other Black owners have had difficulty completing the licensing process.
“When I first entered this process in 2017 it was such a closed and unfair system for African Americans, you just could see it,” Montague said. “I heard about other rich, or white males going through the process and the process that they described to me, what they had to go through, it was totally different than what other minorities and myself had to go through.”
Montague’s daughter, Teesha, who works with her said that in 2018 she formed the National Association of Minority Women in Cannabis to help members of marginalized communities with the complicated licensing process. Group members work with other women trying to start their own businesses by sharing experiences and advice.
“The biggest thing is don’t give up, stay encouraged, stay focused, answer everything,” Teesha said. “This is a multi-billion dollar industry. There has been communities that have been severely disproportionately impacted. There are deficits and there is a lack of minority representation.”
Researchers at Michigan State University estimate that once it is fully set up and matures it will be a $3 billion dollar industry, raising nearly $500 million in state tax revenue annually.
The workgroup found that access to the necessary capital and information on operating marijuana businesses in accordance with rules set by municipalities are big barriers for people of color. It suggested that the MRA create a crowdfunding platform on its website that would be a directory of marijuana businesses in communities that struggle to finance new businesses and investors could support those businesses.
The MRA could also establish a webinar and training sessions for municipalities to learn how to equitably create ordinances for marijuana businesses and share ideas. A social equity tour operated by the MRA would provide a roadmap with bilingual content for applicants to understand the steps to becoming licensed and building a business.
State Rep. Sarah Anthony, who is on the workgroup, said members plan to have those who come to communities to educate on the marijuana industry be reflective of those communities.
“I think that is also an important way to kind of tackle some of that historic distrust, which I think is just there and needs to be a part of the conversation,” the Lansing Democrat said.
Some of the changes proposed by the workgroup will require legislative approval, Anthony said.
The MRA would match social equity applicants who do not have the financial assets to partner with larger groups to help get them started.
Another program would allow individuals without the needed professional experience and finances to partner with qualified licensees. They would invest in a program participant’s business after they graduate from a program teaching legal compliance, best practices and financial systems.
Kenneth Bryant Jr., who owns Premiere Provisions in Big Rapids, said he and other Black business owners would benefit from such programs. He said smaller businesses would be less likely to have to sell large portions of their business to receive that help.
“I think that will eliminate minorities getting taken advantage of just to help them to take one of those social equity spots,” Bryant said. “I think that this really makes it transparent and open to where we can hold everyone accountable and see that the minorities will really benefit from as the years to come.”
Anna Liz Nichols is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.