New Jersey Rep. Donald Payne Jr. (D) recently criticized the state for not issuing any cannabis business licenses to black-owned businesses. Many legalization advocates have pointed out that most cannabis businesses are owned by white men, and they’ve been pushing to make the industry more diverse.

“I am outraged to hear that none of the 56 NJ cannabis business licenses were awarded to a Black-owned business,” Payne wrote on Twitter.
“These entrepreneurs have been shut out of New Jersey’s cannabis market. NJ needs to end this injustice!”

Morgan Fox, political director at NORML, told Cannabis News Box that in many states the “deck is stacked” against small businesses and members of marginalized communities that have “less access to capital” when it comes to licensing. Fox said there are a few ideas for how to address this problem.

“First, eliminate arbitrary license caps; these inherently limit the opportunities available and create competition for licenses that should not exist, and which favors more well-funded applicants; it also forces social equity applicants to compete against each other for a chance to participate in the market before competing in the broader market itself, which is antithetical to the idea of creating generational wealth for marginalized
communities,” Fox said.

He said we also need to improve access to capital and lower licensing and regulatory costs so that social equity applicants can have a better chance at getting a license and can stand their businesses up immediately.

“This can be done in a number of ways, not least of which is passing the SAFE Banking Act and following it up with careful oversight of how financial institutions are providing funding and banking services to BIPOC-owned cannabis businesses,” Fox said.

Finally, Fox said there needs to be more funding for state and local programs that support social equity applicants and licensees beyond just what’s collected from cannabis tax revenues.

“There should be moneys made available from general funds at the outset so that these programs can be up and running before the cannabis tax revenue starts rolling in and not depend on well-funded operators already having a strong foothold in the market; besides, while it is entirely appropriate to devote most or all cannabis tax revenue to these programs, these businesses weren’t the entities prosecuting and perpetuating the war on drugs, governments were – they should bear an appropriate share of the cost for undoing the harms they directly caused,” Fox said.