Analysis: Federal Cannabis Legalization Would Reduce Arrests, But Could Put Some Social Equity Licensees Out of Business

Prohibitions on cannabis have created disparate harms, especially for Black, indigenous, and other people of color (BIPOC). This has occurred largely through disparities in arrests for possession and the effects of those disparities. A new analysis describes options available for using reforms to cannabis policy to address these disparities.

The analysis concludes that federal efforts to legalize cannabis, while reducing arrests, could hinder some efforts at social equity. It also concludes that expunging or sealing convictions for cannabis possession could affect many more BIPOC than other reforms, thus advancing social equity.

The study, entitled “Cannabis legalization and social equity: some opportunities, puzzles, and trade-offs”, by researchers at Carnegie Mellon University (CMU) and the RAND Corporation, appears in the Boston University Law Review.

“Cannabis legalization is not a single, well-defined option, but rather a complex and multifaceted challenge with hundreds of policy decision points, each of which presents opportunities to narrow or widen disparities,” explains Jonathan P. Caulkins, professor of operations research and public policy at CMU’s Heinz College, who coauthored the study. “Organizations focused on legalization disagree about the potential effects on social equity outcomes, so it’s important to have research-based evidence about how cannabis policy influences inequities.”

In their analysis, Caulkins and his colleagues examine the effect on inequities in six areas: arrests and penalties, previous cannabis offences, licensing preferences, diversity in the cannabis workforce, government revenue, and health. They also detail a case study of Virginia, which legalized possession of small amounts of cannabis in July 2021; the authors look at how many people from communities disproportionately affected by cannabis prohibition could benefit from expungement of records as well as from entrepreneurship and employment opportunities in the cannabis industry.

The authors recommend that those seeking to use cannabis policy reform to address social inequities clearly define the populations they want to help and the outcomes they seek to achieve. This will help policymakers choose from the many options available and address potential tradeoffs.

One of the options is increasing cannabis business opportunities for members of communities who have been disproportionately affected, especially BIPOC communities. Some states and localities are issuing social equity licenses, but progress has been slow. Proposed federal legislation to legalize cannabis could impact these efforts. Companies that produce and distribute cannabis could operate across state lines or out of the country entirely, and online cannabis shopping might provide stiff competition to retail stores. These, in turn, could drive many existing cannabis companies out of business, including those operated by equity licensees.

While not all states are poised to legalize cannabis, those keeping it illegal can take steps to address inequities, suggest the authors. In the case study of Virginia, the authors show that sealing or expunging convictions would benefit far more BIPOC than would prioritizing these individuals for entrepreneurship and employment opportunities in a legal cannabis market. Expunging records could improve the employment prospects of hundreds of thousands of people, while increasing employment opportunities for individuals in disproportionately affected communities to work in the cannabis industry could benefit thousands, and equity programs directed at the owners of cannabis businesses could directly help several dozen BIPOC, the authors note.

“Discussions about how cannabis legalization can be used to influence social equity outcomes have become more prominent and more detailed in recent years,” notes Beau Kilmer, director of the RAND Drug Policy Research Center, who led the study. “Our analysis should be of interest to decision makers in states that have legalized cannabis, as well as those considering alternatives to cannabis prohibition.”

The analysis was funded by the Commonwealth of Virginia’s Joint Legislative Audit and Review Commission.

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Summarized from an article in Boston University Law Review, Cannabis Legalization and Social Equity: Some Opportunities, Puzzles, and Trade-Offs by Kilmer, B (RAND Corporation), Caulkins, JP (Carnegie Mellon University), Kilborn, M (Independent Researcher), Priest, M (RAND Corporation), and Warren, KM (RAND Corporation). Copyright 2021. All rights reserved.

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