If you live in one of 19 communities around the state, Michigan officials would like to help you break into the legal recreational marijuana business; a business that in other places has often been segregated by race and income.
The state’s Marijuana Regulatory Agency held its first outreach meeting in Detroit on Monday, as part of its “Social Equity Program.” Here’s the idea: communities hit hardest by marijuana convictions in the past are often locked out of the market once it’s legalized.
In Colorado, where recreational pot has been legal since 2013, overall weed-related arrests went down by 52% from 2012-2017. But the arrest rate for black residents was still double that of whites, according to state numbers. And in Massachusetts, just 4.2% of marijuana business owners are African American.
Part of the problem is the steep startup cost.
“Our application fee on the front end is $6,000,” says Andrew Brisbo, Executive Director of the MRA. “That’s going to pay to do the background investigation in order to determine eligibility for anyone who’s applying for licensure. Municipalities, for their local license processes if you will, can also charge up to $5,000. And then our license fees, once you’re approved for licensure, can cost anywhere on the low end, I think it’s about $8,000 and be as much as $50,000.”
When Michigan legalized recreational marijuana, the legislation required the MRA to create “a plan to promote and encourage participation in the marihuana industry by people from communities that have been disproportionately impacted by marihuana prohibition and enforcement and to positively impact those communities.”
So Brisbo says the state identified 19 communities where the marijuana conviction rate was above average, and more than 30% of the population lives below the federal poverty line. Residents in those areas will be eligible for up to 60% off state license fees, and dedicated MRA staff will help local business operators navigate the process.
The goal, Brisbo says, is for 50% of recreational marijuana licenses in those communities to go to local business owners, and for those businesses to still be open five years down the line.
“When we looked at small business data, it shows that fewer than half of small businesses survive past that five year point,” Brisbo says. “So, when we’re looking at the success of our program, it’s going to be adapting those resources and working with those business operators to keep them in business longer than the average small business.”
Other states are still struggling with segregated marijuana industries and enforcement rates.
Brisbo says in Michigan, they’re planning to hold monthly meetings in all 19 of the Social Equity Program communities. At Monday's meeting in Detroit, about 125 people attended, he says.
