More States Allocating Cannabis Tax Revenue For Social Equity

Washington has become the latest state to allocate part of its cannabis revenue for social equity programs to help communities ravaged by the War on Drugs. Last December, Governor Jay Inslee expressed his intentions to assign $125 million every year to communities that face social and economic injustice due to penalties for drug sales. 

Gov. Inslee that the dedicated funds would go directly to the communities most affected by prohibition, especially people of color.

In an interview with Crosscut, RaShelle Davis, a senior policy adviser in Inslee’s office, expressed that they have an obligation to help the affected communities recover. 

The reinvestment fund comes after the Social Equity in Cannabis Task Force presented proposals with similar financial programs. The task force advises local authorities on policies that create an even playing field in the state’s cannabis sector.

The move parallels a countrywide push among state leaders to right the wrongs of the War on Drugs which caused the criminalization of people of color for drug-related offenses. 

New York is among the states actively working towards an equitable cannabis marketplace. It was one of the first states to decriminalize medical cannabis back in 2012 and became the 15th state to legalize recreational cannabis early last year. 

As it works to establish an adult-use market, leading state organizations have unveiled plans to help tackle the legacy of the War on Drugs. 

Similarly, other states like Illinois have also revealed plans to support community organizations that serve neighborhoods most impacted by economic disinvestment and violence caused by the War on Drugs.

With more states legalizing cannabis, it has become a priority for authorities to initiate social equity programs to help minority communities negatively impacted by cannabis prohibition. Essentially, the goal is to create a diverse and inclusive industry by directing a percentage of licenses to people from communities of color.

Although the allocation is a positive step for marijuana entrepreneurs in Washington, it only represents half of what was initially proposed. 

The president of the Washington State African American Cannabis Association, Jim Buchanan, previously wanted to see $250 million set aside for prohibition victims. However, Buchanan was still appreciative of the move when the Governor announced that only half of that figure would be disbursed. 

Despite only being a fraction of the funding, the disbursement would go a long way in helping the sidelined communities. The War on Drugs policy may be long gone, but drug arrests are still high. 

A recent report found that while black Americans only make up 12 percent of the population, they account for more than twice that amount for drug-related arrests. 

Decriminalizing cannabis has helped reduce race-based arrests, but more needs to be done to achieve equity in the marijuana industry.

Making the reinvesting initiative possible in Washington involves drawing funds from a dedicated marijuana account. The account holds money the state has collected from cannabis excise taxes, penalties, license fees, and forfeitures. 

In the 2021 to 2023 Washington budget cycle, cannabis revenue is projected to surpass the billion-dollar mark. Still, the money isn’t all up for grabs. 

The Washington state government has set aside nearly half of the revenue for health care, while about a third of it will go to the state general fund. Other sectors that benefit from the money include research, licensing, enforcement, and local governments. 

The $125 million set aside for the reinvestment fund would focus on four principal issues. The fund would help facilitate reentry services for those who were formerly incarcerated and provide legal aid to help clear documents and convictions.

Furthermore, the fund will also focus on preventing violent crimes in the cannabis sector and help provide economic capital for minority entrepreneurs. This will allow business owners to stock up on dispensary supplies and fund licensing processes. 

The Washington state government plans to launch a study to determine the best way to disburse the allocation to minority communities. However, until the research is completed, the state Department of Commerce can fund existing programs.

Racial differences have already brought the Washington cannabis industry under scrutiny. Black cannabis entrepreneurs in the state have been unable to profit from the industry due to their communities’ uneven enforcement of drug laws.

State officials have implemented several strategies to help curb the inequities in its cannabis industry. Perhaps the most significant attempt by the state to do this is when it eased the rules to make the industry more accessible to those with criminal records.

Many are waiting to see whether the reinvestment fund will help create a level ground in the cannabis industry for all communities. Although this may be a minor advancement considering the country’s history with inequitable treatment towards people of color, it still represents a significant step forward.