Pot Luck

Searching for justice in the newly legal weed economy

Livia Gershon | Longreads | July 2019 | 8 minutes (1,983 words)

Last month, shareholders of Canopy Growth, the world’s biggest cannabis company, agreed to a proposed merger with Acreage Holdings, the largest weed business in the United States. The deal, worth $3.4 billion, will take effect if and when the drug becomes legal at the federal level in the U.S., creating a massive international player in a rapidly expanding, newly legal industry. Meanwhile, as The Intercept reported, Fate Winslow, a homeless black man who sold $20 of weed in 2008, remains in prison on a life sentence, under Louisiana’s three-strikes law. Winslow is confined to a dorm with more than 80 other prisoners, double-bunked with no air conditioning in the heat of the Louisiana State Penitentiary.

The contrast is especially striking because John Boehner, former U.S. House speaker and a longtime opponent of legalizing cannabis, serves on Acreage’s board of advisors. Boehner’s jump, from fighting legal weed to profiting from it, hasn’t made him second-guess his belief in incarcerating the entrepreneurs who preceded him. “I don’t have any regrets at all,” he told NPR in March. “I was opposed to the use of it. The whole criminal justice part of this, frankly, it never crossed my mind.”

There’s a surreal cultural transformation happening across the country, from dime bags bought and sold in avoidance of the police to meticulously packaged extracts and edibles in plain view at shopping centers. By the light of the rising weed economy, we can better see the unfortunate gap between Winslow and Boehner. As states and cities decide how the legal industry should function, they create tremendous opportunities for profit. Will they also reckon with the race and class dynamics involved in how the legal market for cannabis is structured?

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Steven Bender, a law professor at Seattle University who has studied state marijuana legalization efforts, told me that there’s been a shift in attitude since Washington and Colorado became the first states to make recreational cannabis legal, in 2012. Those laws were passed on the strength of arguments that getting pot out of the underground market would create an opportunity to regulate and tax it. “States like Washington, it was all about the revenue, not racial justice and equity,” Bender said. “It was, ‘Let’s get the money from this. Let’s get government overseeing this because they’re being deprived of money.’”

In the states that pioneered legalization, people who had been imprisoned on marijuana charges stayed that way. Those who had drug convictions on their records were often barred from starting a cannabis business. Penalties for minors involved in selling remained serious, and in some cases police shifted the main targets for arrest from black and brown adults to black and brown kids.

Since then, states like California and Massachusetts have included more racial and economic justice provisions in their legalization laws. This year, the Illinois legislature passed perhaps the most progressive bill yet; it allows many people with cannabis convictions to get them erased from their records, dedicates a quarter of tax revenue from legal sales to a fund addressing poverty, violence, and the impact of incarceration, and offers a leg up in the industry to entrepreneurs whose records have been expunged or who live in areas harmed by drug law enforcement. In Washington, a bill championed by Senator Cory Booker, of New Jersey, would combine legalization at the national level with automatic expungement of federal convictions and a nationwide reinvestment fund that supports job training, re-entry programs for formerly incarcerated people, and community centers.

So far, however, many state and local efforts to include small players in the newly legal cannabis industry have had a rough start. Bureaucratic delays and expensive, complicated license applications keep some applicants from getting off the ground. The fact that marijuana remains illegal on the federal level makes it difficult to get bank loans. Heavy state and local regulations create barriers to entry. In many places, delivery services, which have relatively low startup costs, are banned. Legally mandated tracking of plants, lab testing, and video surveillance systems all add to the expense. And investors with enough money to start a business often treat entrepreneurs from disadvantaged backgrounds as fronts rather than partners.

Will regulators of the legal weed industry reckon with the race and class dynamics involved?

Shaleen Title, a prominent advocate for equity in the industry who serves on the Massachusetts Cannabis Control Commission, said that governments need to balance public safety with an interest in managing oversight costs. For years, she explained, there has been a tradition on the West Coast of letting medical marijuana caregivers grow supplies with only loose regulation; but some officials, particularly in the east, tend to worry about untested products being diverted into the unregulated underground market, so they clamp down. “Sometimes on the East Coast, we go too far in the other direction,” she said. “You’ll often see me, for example, fighting to allow caregivers to care for more than one patient.” Similarly, she said, she and others in Massachusetts are working to allow microbusinesses, craft cooperatives, and other select applicants to open cannabis cafés and delivery services.

Another challenge, Title went on, is getting small entrepreneurs local approval to operate a marijuana business. “In general, because local officials don’t have the time or expertise, and they’re working on so many other issues, they may just go with the business that has the flashiest business presentation or that knows the right lobbyist or who has an operation in another state,” she said. Yet municipalities can be a solution to inequity, she believes: Cambridge, Massachusetts, for instance, is considering limiting its pot first licenses to applicants whose business plans commit to empowering disadvantaged communities—a plan that will temporarily, at least, exclude large companies from the local market.

The trouble is, those large companies often force a legal battle. In Maine, Wellness Connection—the state’s biggest cannabis player, backed by Acreage Holdings—threatened to sue the state over planned requirements that companies receiving licenses be owned by Maine residents. Whether or not that suit has legal merit, it may force regulators’ hands by promising to tie them up in court for months or years.

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To some observers, fighting the domination of big business in cannabis is a lost cause, or one not worth fighting at all. Given the difficulty small players have getting access to capital, and the potential for powerful investors to find legal loopholes and take advantage of qualified local partners, Bender said that he’s not optimistic about a diverse, open pot industry. He’d prefer to focus on stopping racial profiling and incarceration, and on reinvesting cannabis tax revenue to reverse damage caused by the drug war. “I’m more concerned with these monies going back into the communities,” he told me.

Jon Walker, a journalist writing at The American Prospect, made a similar point: if cannabis were a crop like, say, hops, it would cost something like $3 an ounce, rather than $300; the crucial question, he argued, is what happens with the extra cash. “From any perspective on equity,” he writes, “ensuring that any excess spending goes to underfunded public schools or public programs targeted at communities most impacted by the drug war is far better than ensuring more diversity among a few thousand private entities whose entire value is based on government largesse.”

A lot of good could come of well-directed cannabis tax revenue, to be sure: in Illinois, the new legalize-and-tax regime could send millions of dollars to Chicago’s perpetually strapped anti-gun violence programs. But the idea that social justice in the cannabis business must flow through taxation can also strengthen the war on drugs, exacerbating the problems of economic disparity, racist policing, and excessive incarceration. The more states and municipalities depend on tax money from legal sellers, the more incentive they have to eliminate underground competition. Already, big cannabis players are pushing for laws to prevent people from growing their own weed and for crackdowns on illicit dispensaries and dealers.

On a deeper level, in the past, working-class cannabis sellers—particularly people of color—were able to rise in the underground weed market because they took on risk. Not a theoretical risk of losing millions in a VC investment, but the risk of prison and death. To argue that disenfranchised black and brown people should profit from a legal cannabis industry only via government-organized social spending almost inevitably means repeating a long history of branding them as “takers.” And it means reinforcing the image of corporations as job-creators and producers of consumer products we enjoy. Weed, at last, has become the latest galling example of the dynamic in which government regulators work to support corporate interests.

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In the U.S., marijuana has always been a countercultural drug, and its prohibition has given rise to arrangements that fall outside the mainstream economic model: grow-your-own, informal sharing, awkward half-friendships between amateur dealers and their clients. Wendy Chapkis, a sociologist at the University of Southern Maine, documented the alternative economy of the Wo/Men’s Alliance for Medical Marijuana in Santa Cruz, California, for her book Dying to Get High (2008). In the alliance, caregivers and seriously ill patients—many of them gay men with AIDS and women with cancer—volunteered their time growing cannabis and shared their crops freely.

In meetings—where members of the alliance coordinated pot growing, processing, and distribution, and picked up their weekly supply—they found all the trappings of a community board. “Some members seem to find the meetings almost unbearably frustrating, while others experience them as essential and life affirming; for many, they represent both an obligation and a critical lifeline,” Chapkis writes. She also observed that a number of members, having completed their medical marijuana treatments, continued to attend the meetings “for the community they provide.”

The collective was both a practical health solution and a political activity. “It had a much broader critique of medicine as a for-profit enterprise,” Chapkis told me. “It was absolutely outside of the cash economy.” The alliance would become a player in the movement to legalize medical marijuana in California, laying the groundwork for today’s widespread campaign for full recreational legalization. In 2002, when federal agents raided its operation, local officials and neighbors came out in support of the group, putting their moral weight behind the cause.

But today, regulations in the legal California market have made it hard for the alliance to function. Chapkis said that, although it’s beneficial for many patients to simply pick up medicine at a dispensary, legalization also comes with a loss. “Marijuana was never just a commodity in my lifetime,” said Chapkis, who is 65. “It was a cultural act of outlaw behavior.” She added, “It’s one of the ways that ‘nice’ white middle-class youth had to deal with just a taste of what the punitive law enforcement state has for people of color in our country.”

The more states and municipalities depend on tax money from legal sellers, the more incentive they have to eliminate underground competition.

 

Middle-class and wealthy white pot-smokers (like yours truly) are among those most likely to jump at the chance to patronize legal dispensaries, which means shaking off the irritating brush with criminality that has historically come from buying weed. But for many working-class people of color, underground, untaxed, and unregulated cannabis will typically remain the best option for success in the weed economy—not to mention the best way to find an affordable product—at least for a while. Cannabis may never again be a realm where we’re all forced to be outlaws, but at this liminal moment, it’s a powerful example of the fact that legality has more to do with power dynamics than morals.

There may be no perfect solution to the problems raised by cannabis legalization. Pushing for social equity licensing programs, for state and local measures to curb the power of Big Weed, and for the use of tax revenues as reparations for the war on drugs would make the market better, as would fighting against police crackdowns on small, illicit operations. In these early days of legal weed, there’s an opportunity to confront income inequality, racism, and corporate influence as the cannabis economy never has before.

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Livia Gershon is a freelance journalist based in New Hampshire. She has written for the Guardian, the Boston GlobeHuffPostAeon and other places.

Editor: Betsy Morais

Fact-checker: Steven Cohen