PP 50 | Social Equity In Cannabis

 

Social equity programs are a relatively recent development in the cannabis industry that is designed to help individuals, families, and communities victimized by cannabis criminalization and the war on drugs. Many of these programs, however, are doomed to fail, owing to such problems as corruption, lack of transparency, and severely limited funding. Ironically, this dire situation exists at a time when social equity is just gaining traction in public opinion. Joining Tony Frischknecht to talk about this is Chris Nani, the Founder of the cannabis publication, Endo Insider. Chris has worked in the social equity subfield of the cannabis industry for the last three years, developing the Social Equity Assessment Tool, which is the first and only rubric currently used to grade the efficacy of existing social equity programs. He has recently released a book with a dozen other authors called Understanding Social Equity. His experience in the field of social equity research helps us unpack the realities of social equity programs in a time when they are most needed.

Listen to the podcast here:

Unpacking Social Equity In The Cannabis Industry With Chris Nani

Thank you for joining me and reading. I hope your day is going well. I have some awesome stuff coming up for you. I am bringing back a guest that I had on. We were discussing social equity, what it is, and what it has to do in our society. I wanted to share a definition with you that I borrowed from the next gentleman. Social equity is a novel concept that has yet to have a standard definition. As social equity programs evolve, so does our understanding of what they are, why social equity matters, and why it is the right time for social equity programs. This next gentleman has completed his first publication of the book called Understanding Social Equity. Chris Nani, how are you doing? Welcome.

Tony, thanks for having me on. I am excited to be here.

I’m excited to have you. We talked when you were almost finishing up the book. How has it been going? You launched the book.

Yes, we released the book.

Congratulations, you had a lot of obstacles to overcome to put this together. One of them is being the fact that you have many people involved in this process. It sounds overwhelming. You’re dealing with 10 to 12 different authors that helped you write the book.

I had a dozen other authors help write this.

What were some of the challenges that you have when you were creating this book?

Probably the biggest challenge was initially framing this book, planning it out, and figuring out what is understanding social equity in the sense that what are all the components to it? The what’s, why’s, and the history behind it. Figuring out who’s an expert in that field or someone who has extensive research that looked into these subjects and then connecting with them and eventually soliciting them to help write this book with me.

Social equity is a novel concept that has yet to have a standard definition as social equity programs evolve. Click To Tweet

You have an array of people to work with here. You’ve got a professor from Ohio State, several attorneys, Chairman of the Board of Minority Cannabis Business Association, and Chairman of the Board of Minorities for Medical Marijuana. You also have people that you’ve connected with on Weedmaps, and Marijuana Business Daily. You’ve got some solid individuals here. I can imagine, how did you come across contacting all these guys? Are you friends with any of these guys? Did you work with them in the past?

I would say everyone’s story is a little bit unique, but the majority of these people I’ve connected with either through LinkedIn, cannabis events or somehow we’ve worked in the past before on prior social equity events. I knew some of the key players before and the people that I did know. I would reach out to them because it’s still a small community. You can imagine words goes around fast when someone does something.

When you approached some of these guys, what was your sales point? You’re like, “I’ve got an idea.” How did that go?

That was a tough one. For a few of the people, this is before we even had the book idea, I was spitballing saying, “Do you have any resources for social equity that we can send to people like regulators or policymakers?” I’m getting tired of saying the same things to the same regulators over and over again. We’re having the same conversations and if this was all in one spot, it would be a lot easier for them, for me, and everyone around.

The idea was, “Let’s put together a step by step on how to understand social equity,” according to your book.

The next step was to brainstorm what is social equity and the components of it. We are laying out the foundation of it. I had quite a few of the people that are on the list helped brainstorm articles and ideas for the book. Professor Berman from Ohio State, for example, and Emily Burns, an attorney, both came up with sections for big data metrics and constitutional problems that social equity programs face.

The approach of taking many different people and understanding their perspective is changing the way books are being created. I published my book in 2019 and I noticed that there were a lot of people out there publishing books with multiple authors. What are the unique things that bring into the book when you have many people involved in this? 

One of the biggest things that bring for social equity is that it adds some validity and credibility to it. This is a highly sensitive subject that no person can speak about and be the end-all for. I think it’s important to have as many people in the community that speak about it regularly, engage regulators, talk about social equity, and collectively coming together to say, “These are our thoughts,” and then there’s one spot for everyone to see them.

PP 50 | Social Equity In Cannabis

Social Equity In Cannabis: We have seen a massive shift of opinion in favor of social equity in the cannabis industry with the Black Lives Matter movement.

 

Take them to that one spot. There had been some different conflicts between what people’s thought about, what they thought should be there. How did you work with those people to get resolution and say, “This is the direction we should head. We understand your thoughts?” How did you weave them through the process to make this happen?

It’s a careful subject. Depending on the terminology used, what kind of angle you’re taking at things. Luckily for us, all of the authors were aligned on the subject. It isn’t too hard to understand that social equity programs, for example, should be a part of the cannabis industry if you look at history. These are basic tenets we agreed on and from there, moving forward in the preface, there’s a disclaimer at the end that says the authors represent their own sections and there will be disagreements. The point of this book is for you to fully understand these are different ideas and viewpoints.

Talking about particulars of the actual book itself, I was reading about Maryland’s AG’s Office. This was in Professor Berman’s section at the beginning. He was stating the facts that the AG’s Office had referenced social equity to the Maryland Medical Cannabis Commission. They wanted to have some movement in there. Can you go into a little more depth on what you’re seeing with states like Maryland and other states that are similarly trying to implement social equity programs and what the difficulties are there?

I would say we’re in a different landscape for social equity than we were before. Public opinion is very much favorable for social equity in the cannabis industry. We’ve seen a massive shift in public opinion with the Black Lives Matter movement. It’s done a great job bringing light to a lot of the issues that are going on. With that being said, a lot of regulators are more open-minded to the idea of social equity programs because they’ve seen the sheer amount of people that are protesting. The shared amount of people that honestly care about these social issues. In that regard, there will be fewer challenges for future social equity programs. The biggest challenge still remains though, is knowing what a program is and how to implement regulations in a fairway.

For example, we have four case studies in our book near the end of the chapters on a few different cities and states, their social equity programs, and how they implemented them. One of the most heavily criticized programs has been Los Angeles. For example, when they opened up their social equity program, it was the first 100 people to submit, not based on merit or application. It is a time-based thing. There were a lot of issues with that. There was some alleged corruption. People accessing the system early. There are tons of problems. You can imagine whenever their social equity, it’s going to come under close scrutiny also for the fact that these licenses are worth millions of dollars. It’s important that they go to the right people in the right communities.

What does it have to do with the US Constitution? Is that a big part of this? When you start working together trying to build social equity programs, how does the US Constitution fall into this?

The Constitution has a Bill of Rights. It also has additional amendments. One of them in the Fourteenth Amendment requires that there’s an equal protection clause regardless of race, color, creed, national origin and sex. It states that everyone should be treated equally and fairly. You have a lot of cases that decided that Brown versus Board of Education, 1 and 2. The thing with social equity is to make a program effective, it has to be racing neutral. It can’t apply to specific races to advantage or disadvantage one over the other. What we’ve seen in programs like Ohio, when they attempted to implement their program, were race-specific and that’s unconstitutional.

They were saying, “These certain races are allowed into the social equity program and they’re qualified for it.” That’s one of the factors. A constitutional way is to say, “If you have a cannabis conviction that can show direct harm from the war on drugs.” If you live in an area that’s been disproportionately impacted by the war on drugs, meaning it’s been over-policed, high-risk records, all of these things contribute. They’re tangible evidence that you’ve been harmed by the war on drugs. The standards are low to show if you’ve been harmed by the war on drugs, but it can’t be based on the color of one’s skin.

It is vital for social equity programs to go to the right people in the right communities. Click To Tweet

I’m trying to figure out fairness, somehow to keep this fair. It sounds extremely confusing for the states as they put these systems in place. It seems like a fine line. Is that what you’re coming across when you talk to the states?

Absolutely. Everyone is concerned that there are social equity programs going to come under litigation, heads up a 100% of them will, but people are concerned about how they’re constructed because every single thing will be litigated.

The last time I heard that was 2013. I was at a tax event in the city and state of Denver and they said, “We will guarantee that 100% of you will deal with the auditing process, so be aware.” It put me back on my heels. They said they’re going to audit us, all of us. There was only a room of 200 people and I imagine maybe 60% of us took it seriously. The rest of the 40% did not. That’s a scary place to be in for a state that they’re antagonizing litigation. What does the state have and the regulators have to fall back on to protect themselves?

We’re still learning as the process goes on. We still have little in the way of actual social equity programs. There’s not much research out there. There’s not much legal precedent out there either to say, “This is what’s legal. This is what’s constitutional.” With that being said, with any new area of law, there are going to be tons of litigation so we can learn how to operate legally.

Your case law is limited, that’s what you’re telling me. It’s so much in line with the cannabis industry.

It’s close. It follows a similar trend.

We’ve seen some leaps and bounds over the years, but we still have some major obstacles that need to be cleared at this point and cleared out of the way so that companies can be successful. How do companies position themselves to use social equity as a part of their business and their company?

The first way is a business that could do that. Let’s say this is a normal cannabis dispensary. That’s new to the social equity scene. I think one of the biggest ways you can do that is to start supporting businesses that are owned by social equity qualified people. You can find these businesses, they have a list. I know Los Angeles and Oakland have them because those are the winners. You can see who’s a social equity applicant. These are the people that have been harmed by the war on drugs and the ones who need help the most because you look at some of the qualifications for them. Low income is one of them. I think Richard touches on this in the book, but as far as low income, that means you need to make 400% or below the federal poverty limit. That in no way is enough to build a dispensary inventory to an employee to run a store. These are the applicants that are looking for a business to help start their own so they can be successful.

PP 50 | Social Equity In Cannabis

Social Equity In Cannabis: One of the best things you can do is to start supporting businesses owned by social equity qualified applicants.

 

It sounds like to be more effective, they need a partnership to be successful.

That’d be a great idea.

I love that idea, especially if you, as a business owner out there and audience guys, if you’re able to find somebody to work with on this, you could also see some huge advantages for you, your company, and the growth. I can see it as a huge publicity part like, “We’re coming together to help these guys up, to give them a leg up, but also teach them a lot that they don’t know about.” Make a real impact in changing somebody’s statute where they’re at and understanding, “How can we make good business decisions as we grow?” Most people that are in cannabis are always up for the challenge, at least the ones that are still around.

I appreciate you staying with me because I’m working through this in my head. I’m trying to understand some opportunities that are available in this looking at something that Chris has created here. His book, Understanding Social Equity is free. This is open to you guys. It’s got a great breakdown of what you have seen over the last years. You’ve been working on this since 2018. He’s also got a tool that he’s created to give to regulators to work with to build their own programs. What I’m trying to do is understand where you can implement an idea that you can grow your company and social equity. From what Chris is sharing with us, there’s a huge partnership aspect. If you’re willing to take a risk, which you are in cannabis, you’re willing to work with some of these people that are designated social equity businesses. You were saying that there’s someplace in LA that they can find. Is there a good place for people to search for these that you can recommend, Chris? 

For Massachusetts, it’s the Cannabis Control Commission‘s website. Los Angeles, Oakland is on the regulators’ page. These are well-publicized areas. It shouldn’t be hard to find them.

You probably have some special relationships with some of these people. Am I correct in thinking that? You’ve met these guys and talked to them personally.

I’ve gotten to know a lot of good people over the years.

If people are interested in contacting you for connection, are you willing to put people together if they’re looking for some individuals?

For social equity programs to be effective, they have to be race-neutral. Click To Tweet

Let me know where you’re looking and I’ll let you know if I have any of my friends over there.

I bring this up because I’ve talked about this many times. The partnerships are challenging and finding the right people. Not just people that have a business and a pulse because there are millions of those on every corner, but finding good people. I appreciate you opening up that for people to reach out to you. You got your book published. How is the information being accepted? What’s happening in your world?

As soon as I published the book, I had this one author sent me a text and he said, “Chris, I’m nervous about this book, but in a good way. This is the first of its kind. I’m not sure what people are going to think about it because we’re saying we know something about it.” It’s been overwhelmingly positive. I’ve been happy to see all the positivity in the comments and the messages people are sending has been nice to see.

I want people to check this out. As Chris said, it’s free to download. Where can they find this on your website?

The book is free to download. If you go to LinkedIn and you type in Chris Nani, it will be the first result you should see for me. It’s up all over LinkedIn. I have a Google Doc App. You can also personally email me at ChrisNani@Gmail.com. I’ll send you the PDF myself.

You guys have a lot of choices out to find this. It shouldn’t be hard. This is in front of everybody’s face and I strongly urge you to read this book because it’s got a step by step. It lays out many different things that we’re not aware of. It’s all in one place and it’s super convenient. Chris, it’s an awesome work and congratulations on your first publication. I look forward to reading the rest of it. I’ve read quite a bit, but there’s some interesting information in there all over. You should check out his book. If you guys have any questions for me, please visit PlantProblem.com and feel free to comment on this episode or any others. I also challenge you to reach out to Chris, ask him for those connections. He’s got them right in his pocket and he’s willing to share him with you. Any more direct than that, it’s pretty much a handshake. I hope you are having a great day out there. I look forward to seeing you soon. I’m building some amazing stuff in our industry, so thank you so much for reading guys. I will talk to you later.

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About Chris Nani

PP 50 | Social Equity In CannabisChris Nani has worked in the social equity subfield of the cannabis industry for the last three years. In each year, he has further progressed policy and conversations. In his first year, Chris developed the Social Equity Assessment Tool (S.E.A.T.) which is the first and only rubric currently used to grade the efficacy of existing social equity programs.

Immediately following the creation of S.E.A.T., Chris performed a case study of Los Angeles’ social equity program with funding from the Minority Cannabis Business Association. For the last nine months, Chris has worked on developing Understanding Social Equity, a comprehensive book aimed at discussing what social equity, is, should be, and could be with submissions from twelve other thought leaders.

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