During an illuminating conversation with Director Andrew Brisbo of the Marijuana Regulatory Agency on December 9, Four20Post host Mike Brennan asked the Director if there were “things you’d like to change, improve, add to…” for 2021.
“Social equity is the primary issue,” he was quick to reply. “We haven’t gotten to where we need to be, yet.”
Social equity is a program intended to ease the access to cannabis business ownership for people of communities disproportionately affected by the War on Drugs. The MRA has a social equity division, and offers discounted rates on fees and costs associated with the cannabis business licensing process. “Helping people through an applications process doesn’t create the capital necessary to run a business,” Director Brisbo acknowledged.
“One of the biggest challenges we faced last year was trying to come up with social equity that actually works for communities,” said Four20Post co-host Rick Thompson.
The Director agreed. “I formed a workgroup to focus on issues of equity and diversity and inclusion. I think that group is going to finalize their conclusions within the next couple of weeks so we may see some progress there.”
Social equity is a program tied to those disproportionately affected communities. The MRA identifies the communities based on demographic data, poverty rates and crime statistics. The MRA had originally identified a narrow group of cities whose residents were eligible for the program, but quickly learned that was not enough coverage.
“We’ve had a lot of participation with our social equity program,” Brisbo nodded. “We expanded it this year to 184 communities, extended and strengthened the fee reductions and we have dedicated resources that work with applicants to familiarize them with the licensing process and actually provide some kind of hand holding to work through that application process as well.”
All that infrastructure has not brought many social equity licensees into the industry. “We haven’t seen the results we’d hoped for, in terms of turning that interest into actual licenses being issued,” Brisbo admitted.
It’s no secret why the disadvantaged have trouble becoming licensed in the cannabis industry: it’s money. “When we did a survey and asked what the challenges were for all those applicants that had submitted the social equity application, but not a pre-qualification or licensure application, we wanted to know what the barriers were. I think we did this in June,” the Director explained.
“We had three responses that were around the 25% mark. One was the pandemic was putting off their plans, which isn’t that surprising. One was they were waiting for their municipality to adopt an authorizing ordinance; I think there were a lot that were probably focused on the city of Detroit, so now that opportunity exists.
“The third was access to capital,” Director Brisbo concluded. “We can give fee reductions all day long, but… that is not bridging that gap.”
Got a big problem? Put smart people on it. “One of the things we’ve been particularly focused on in the workgroup is, how do we provide access to capital.” He later added, “I am going to have a permanent standing workgroup that’s going to focus on issues of equity, diversity and inclusion so that not only can we generate new ideas, but also it can be a good sounding board for us as we are adopting new policies, which is always going to be happening as the law evolves.”
The answer to the riddle of social equity is, there is no one answer. “We’re going to be working on a lot of ideas,” Brisbo confirmed. “There will be some things that we can implement through our social equity program, there are other ideas that will requite administrative rule changes, and there are other ideas that will require some statutory changes.”
2021 should be an active year for social equity and legislative reform for the MMFLA and MRTMA cannabis laws. That’s a lot of work. “The report we’ll put out will be shared with legislative leaders and the governor’s office to look at some of those key ideas… as to how we take that interest and get it turned into licenses,” the Director outlined, “with the ultimate goal of having ownership in this industry be more reflective of, at least reflective of the demographics of the state of Michigan.”
How diverse is the population of current cannabis license holders in Michigan? Not very. “At one snapshot in time, 14% of the population of the state of Michigan was black or African-American, our ownership rate was between 3 and 4%; one-half percent was Hispanic or Latino, and we were less than 1% of ownership that was Hispanic or Latino,” Brisbo delivered. “We certainly have some work to do to get that into a better place.”
Jamie Cooper and Stevan Bratic joined the Four20Post broadcast on December 9. Watch the video of the Director’s exclusive interview at the link below:
Rick Thompson wrote this column.