A Guide to Social Equity Programs in the Cannabis Industry

by | Dec 14, 2022

Cannabis prohibition and the War on Drugs have had a disproportionately harmful impact on marginalized communities. As more and more states continue to legalize cannabis, it’s important programs are established to right the wrongs of this prohibition and help to empower those who have been most impacted.

Several states have established such programs in one form or another, known commonly as “social equity programs.”

In the cannabis industry, social equity programs strive to create fairer and more impartial ownership and employment opportunities. The goal has been to decrease ongoing disparities and more adequately address the harm cannabis prohibition, incarceration, and the War on Drugs have had on marginalized people.

There are four main areas most social equity programs aim to address:

  • Equity in the industry to promote the inclusion and success of marginalized groups by providing access to equal opportunities and resources.
  • Equity in communities to empower and support those most impacted by the War on Drugs and cannabis prohibition.
  • Equity in justice to end convictions for non-violent cannabis crimes and expunge the records of those convicted.
  • Equity in access to ensure safe access to cannabis products for veterans, seniors, immigrants, and disabled persons without the risk of losing their benefits or immigration status.

As of December 2022, cannabis has been legalized in 38 states for medical or adult use. Of those 38 states, only 15 have created some type of social equity program. These states include Illinois, California, Massachusetts, New Jersey, New York, New Mexico, Virginia, Michigan, Vermont, Arizona, Connecticut, Colorado, and Washington.

What Are Social Equity Programs?

Those impacted by the War on Drugs and cannabis prohibition often don’t have access to higher education, housing, and employment opportunities, and can even lose the right to vote. The purpose of social equity programs is to curb these effects on both individuals and communities who have been harmed.

The aim of social equity programs is to ensure access and inclusion in the newly legal cannabis industry for people disproportionately harmed by cannabis prohibition and discriminatory law enforcement. These programs often offer disadvantaged people and communities of color an opportunity to benefit from the cannabis industry, and in some cases even have their records expunged of past non-violent cannabis convictions.

Why Social Equity Programs Are Important

Cannabis licenses can be incredibly hard to obtain and are often very expensive. Completing the application process alone requires a team of experienced individuals to find and negotiate real estate contacts, vet and hire architects, oversee safety and security consultations, and work with community stakeholders to gain local approval.

On top of this, cannabis is still federally illegal and is listed as a Schedule 1 drug. This makes it nearly impossible to get a business loan to fund the application process or complete any of the necessary renovations to build out a retail location.

This is where social equity programs come in. Social equity programs work to prioritize who is awarded cannabis licenses. Typically, the criteria involve having been previously convicted of a non-violent cannabis-related crime or having lived in a zip code with high conviction rates for drug-related crimes. By prioritizing licenses to these individuals, the cannabis industry helps provide access and improves the chances that marginalized individuals are able to profit from and thrive in the cannabis industry.

Most states offer social equity applicants priority to apply for a license while others offer reduced application and licensing fees, technical assistance, access to an incubator program, or apprenticeship opportunities.

If you’re living in one of the states mentioned above that offer a social equity program, the National Associated of Cannabis Business is a great resource to find program specifics.

How to Apply for a Social Equity License

The application process to apply for a social equity license will vary by state. However, most states have several similar qualifications you must meet in order to apply.

These qualifications typically include items like:

  • A resident of the state for the last 12 months.
  • Residing in a disproportionately impacted area for 5 of the last 10 years.
  • Having been convicted of a cannabis-related offense or had family members convicted of a cannabis-related offense.

The best way to keep tabs on your state’s social equity program is by following an organization like The Equity Organization for resources and news on the latest policies.

How Leaf Trade Supports Social Equity License Holders

Securing a license is one major hurdle, but once you have one how do you even get started?

Running a dispensary is no easy feat. Stocking a store alone can prove challenging. It’s crucial to build relationships with cultivators and distributors you can trust. You need to make sure you can stock your store with high-quality products that comply with all regulations in your market. New license holders need to know you can place orders and receive them on time when you need them.

This is really where Leaf Trade can be a huge game changer for a dispensary just getting started.

Leaf Trade is an easy-to-use solution for dispensary owners new to the industry. Once you’re logged into the platform you can easily order inventory that’s updated in real-time, to stock your dispensary and be up and running. Our platform is designed for verified, licensed retail dispensaries to easily access available cannabis product inventory in their state, regardless of the connections or experience you have.

The Leaf Trade platform provides a space for legal dispensaries to find compliant cultivators in their market and make new connections. Our platform empowers you to build relationships in the industry and find brands you can trust. Building relationships in the cannabis industry is pivotal as it helps keep your business agile and ensures you have access to the products you need.

Leaf Trade integrates with the industry’s leading seed-to-sale platforms which helps significantly with compliance tracking. By buying on Leaf Trade you can remove the worry about purchasing products that may not meet your state’s mandates. This can allow you to focus more on growing your business.

A key part of running a successful dispensary is having access to critical business analytics so you can better understand the state of your business and forecast your needs. Leaf Trade’s Advanced Analytics offering gives valuable insights into your operations to help you work efficiently and increase revenue.

The Leaf Trade platform makes it easier to hit the ground running for every licensed business competing in the cannabis industry, regardless of their experience. Leaf Trade was created to provide cannabis businesses of all sizes with a better and more efficient way to operate. Getting started in the industry is hard enough, and using the Leaf Trade platform can help ease some of that burden to give social equity license holders a stronger chance at running a successful business.


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