Black, Indigenous and other racialized communities in Canada have been disproportionately criminalized by cannabis convictions, despite similar rates of consumption across different groups. With recreational cannabis now legal, policy-makers are being urged to consider the lasting harms of cannabis prohibition on certain Canadians and how those inequities might be redressed through creative policies and programs.

“Laws were enforced in an unjust manner and therefore the consequences of criminalization have not been distributed equally across different social or different racial groups,” says Akwasi Owusu-Bempah, a professor of sociology at the University of Toronto who studies the intersections of race, crime and criminal justice.

He estimates that administering previous cannabis laws through policing, courts and prisons costs Canadians between half a billion dollars to a billion dollars a year. “The money that’s been used to wage or to fight the war on drugs has been quite literally used to fracture and damage entire communities and to ruin people’s lives.”

Bill Blair, the minister responsible for the federal cannabis file, in 2016 acknowledged that the racially disparate enforcement of pot laws is “one of the great injustices in this country”

In Toronto, where Blair served as police chief for more than a decade, Black people with no history of criminal activity were three times more likely to be arrested for cannabis possession than White people.

And data from the United States shows legalization won’t fix the racial disparity of pot arrests. After Colorado legalized recreational cannabis in 2014, the rate of arrests for cannabis-related offenses remained three times higher for Black people than white people in 2016. In Canada, legalization could even compound the problem as the number of cannabis-related offences will grow from eight under the Controlled Drugs and Substances Act to 45 under the Cannabis Act.

Calls for amnesty

The federal government said on the day that recreational cannabis became legal that it will table legislation to allow Canadians with simple pot possession convictions to apply for a pardon upon completing a sentence. Ottawa will waive the current $631 administrative fee attached to pardon applications and expedite the process by ending a mandatory waiting period.

The proposed law will not, however, expunge records of simple possession charges as the NDP and advocacy groups like Cannabis Amnesty have been calling for. Public Safety Minister Ralph Goodale said at a news conference that expungement is “reserved for cases of profound historical injustice where a Charter rights violation was involved.”

Owusu-Bempah says cannabis charges have “an impact on the individuals themselves but also on their families, communities, and ultimately society as a whole.” The charges can inhibit travel, volunteering and the ability to find meaningful work. “We’ve got hundreds of thousands of people who have criminal records for cannabis. Those are people who can potentially not contribute to the Canadian economy in the way they could if their job prospects weren’t impeded by a criminal record,” he says.

Possible employment restrictions include being prohibited from jobs in the legal cannabis industry. Under Health Canada’s Cannabis Regulations, people holding key positions in cannabis businesses require security clearance, which means a criminal record check.

The regulations do not automatically bar people who have been convicted for simple possession of cannabis or small-scale cultivation of cannabis plants. The federal minister of health will have broad discretion over whether to grant, suspend or cancel clearances. Across the provinces and territories, hiring limitations vary among distributors from firm exclusion to considering applicants with records on a case-by-case basis.

Owusu-Bempah notes the hypocrisy of this policy of excluding people with cannabis charges from the workforce: “it’s adding insult to injury to at one point criminalize these people for something that many people do and then exclude them from participating in the licit market.”

Adding to this racial inequity, white males with MBAs are at the helm of the vast majority of cannabis companies leading Canada’s multi-billion-dollar market. The same is true for racial representation in the American pot industry where, in 2017, 81 percent of businesses were owned by white people. Lack of access to funds, real estate and regulatory know-how can further impede legal market participation.

In the US, this economic disparity is now being acknowledged, and cannabis equity policies are spreading across the country. These policies seek to address the wrongs of prohibition by building an industry that is more inclusive of the people who bore the brunt of the unequal enforcement of cannabis laws.

The Oakland Model

Soon after California legalized cannabis in 2017, the city of Oakland implemented the ground-breaking Equity Permit Program, whose goal was to make the industry accessible to residents who have been victimized by the war on drugs. Under this program, half of the area’s licenses for cannabis cultivation, manufacturing, delivery, distribution, testing and transportation are reserved for equity applicants.

Equity program applicants must also earn less than 80 percent of the city’s average income, and may also qualify for the program in two other ways:

  • if they have been charged with a cannabis conviction in Oakland over the past 20 years
  • if they have spent a decade living in a neighbourhood with disproportionately high rates of cannabis arrests

The city has even created a Police Beat Map for residents to learn whether their district has been overpoliced. (Owusu-Bempah notes that police across Canada also collect this information, but it has only been made public through investigations by the Toronto Star and VICE News, based on freedom of information requests.)

Oakland’s program waives licensing fees for successful applicants, offers technical training and facilitates loans for participants starting businesses. It also encourages established or prospective cannabis companies to act as “incubator” partners for equity applicants. These incubators share space or resources with budding equity businesses, and have licensing priority over other general applicants.

Andre Shavers, who runs a marijuana delivery business, poses in Oakland, California. Shavers was sentenced to five years on felony probation after authorities burst into the house where he was living in one of Oakland’s most heavily policed neighbourhoods and found a quarter ounce of marijuana. AP Photo, by Eric Risberg.

Owusu-Bempah thinks there is a strong case for private sector participation in equity initiatives. “They might not have a moral imperative to do so, but businesses should be able to show that they’re doing their part to repair some of the harms of a substance and industry that they’re now benefitting from.”

Beyond Oakland

Similar programs are being established in Los Angeles, San Francisco, Sacramento and elsewhere in the US. Massachusetts, which passed a bill to legalize recreational cannabis use at the end of 2016, is developing the first statewide equity program.

Shaleen Title, an attorney who specializes in cannabis regulations and a long-time advocate of legalization, holds one of five seats on the Massachusetts Cannabis Control Commission. Her 2017 appointment marked the first time that a pro-legalization advocate is responsible for implementing cannabis policy in the US. Previously, she was a founding board member of the Minority Cannabis Business Association, where she led the drafting of the first state-level model bill to give states guidance to implement their own processes of reinvestment and reconciliation.

Title oversees the Massachusetts Social Equity Program, which encourages residents with prior convictions, or their spouses and children, as well as residents from low-income and overpoliced regions to participate in all areas of the legal industry.

“When we initially took feedback from the communities, what they told us is they didn’t want a one-size-fits-all-program — that it varies based on their experience and their ultimate goals,” she says. As a result of this feedback, the equity program has four tracks: entrepreneurship, industry management, entry or re-entry into the workforce, and transitioning into the cannabis industry from other fields.

Title also manages the state’s Economic Empowerment Priority Review, which prioritizes licenses for applicants who can demonstrate a history of empowering community members in areas of disproportionate impact. The Cannabis Control Commission will assess empowerment applicants and general applicants for cannabis cultivation, manufacturing, retail, transportation and testing licenses on an alternating basis.

Both of these programs require careful oversight. In Oakland, some equity permit holders report having experienced more than six-month delays in accessing the resources and facilities they were promised by incubator partners. The holdup is taking a toll on their businesses by preventing them from earning profits and eating away at the lifespan of their state licenses.

To prevent these kinds of regulatory fumbles, the Massachusetts program has strict, legislated accountability measures for collecting and reporting data on who is licensed and where jobs are being created. The commission has also appointed a citizen review committee composed of nine members of impacted communities.

“The biggest challenge is making sure that our program is truly inclusive and that our equity efforts are not just lip-service,” says Title. “Even though we already created the equity program, we have to remain flexible and diligently collect data about what the challenges people are facing and ensure that we are addressing them head on as we move forward.”

A federal system

Cannabis business equity programs are becoming more widespread across the US, with plans being established in Florida, Ohio and Pennsylvania. Building a national program, however, would be a new challenge, and Title is often asked by federal legislators what such a plan would look like. “[It] would have some element of small business loans, mentorship, technical assistance and then jobs and training programs,” she says. “Any time you do something for the first time it’s not going to be perfect, so the most important thing about this is that regulators are collecting data and talking about it.”

For a Canadian model, Owusu-Bempah envisions establishing a Canadian agency or bodies within existing agencies to coordinate cannabis business equity programs at all levels of government. Each level of government could set up its own equity program based on the jurisdiction the licenses they are responsible for.

Licensing of production and sales would still be done by Health Canada. The provinces and territories, which are responsible for determining how cannabis is distributed and sold within the various jurisdictions, could work with the industry to remove barriers to employment in the market. The private sector would be expected to implement hiring practices that prioritize inclusion and establish mentorship programs.

Minister of Justice and Attorney General of Canada Jody Wilson-Raybould, right, Minister of Health Ginette Petitpas Taylor, centre, and Parliamentary Secretary to the Minister of Justice and Attorney General of Canada and the Minister of Health Bill Blair, left, listen to questions during a press conference on Bill C-45, the Cannabis Act, in the Foyer of the House of Commons. The Canadian Press, by Justin Tang.

Owusu-Bempah believes that a national equity framework will be established in Canada immediately, but he thinks if we took cues from the US it would be “relatively easy” to build. He would also like to see governments and industries that will be collecting the cannabis tax revenues set up a redistribution plan to further redress the harms of prohibition.

An initiative tabled by a city councillor in Los Angeles, the Cannabis Reinvestment Act, is one example of such tax revenue redistribution (it was subsequently scrapped). It would have imposed a 1 percent tax on all commercial cannabis sales, a $5 surcharge for tickets for cannabis events and a $5 surcharge each time cannabis-related products were tested by a licensed commercial cannabis testing laboratory. Revenue would have been diverted to a special fund to support youth leadership and civic engagement programs, educational opportunities, and local health services in impacted neighborhoods.

So far, Canadian governments don’t have any of these types of social equity measures in the works. The federal government is not designing a preferential licensing or equity program directed specifically at groups disproportionately affected by prohibition. Health Canada spokesperson André Gagnon says Health Canada’s approach to security clearances and licensing supports the government’s “objectives to encourage a diverse market of large and small players to displace the illegal market and keep the profits from the sale of cannabis out of the hands of criminals and organized crime.” Gagnon also notes that special cultivation and processing licenses were created to enable the participation of small-scale growers.

Health Canada collects information on applicants’ gender, education, residential history, employment history and citizenship to help determine whether to grant or deny a licence and/or security clearance. It does not collect information relating to the economic status or race of applicants for licenses, although applicants can voluntarily identify themselves or their employees as Indigenous during the process. Those who do so are referred to a service to guide them through the process.

The provinces have been mostly silent on this issue. British Columbia is licensing a few legally vague grey-market dispensaries ─ smaller businesses that had been operating before legalization. Manitoba has crafted a hybrid model that offers preferential licensing to retailers with partnerships with First Nations. But none of these processes or programs address the specific harm done to communities by unequal law enforcement.

According to Owusu-Bempah, it’s time for that to change. Equity programs are “sensible public and social policy. Cannabis legalization can be a means of providing social justice that comes with its own funding package.”

This article is part of The Economics of Canadian Cannabis special feature.

Photo: Shutterstock, by Jessy Libik.

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Madi Haslam
Madi Haslam is a digital content creator at the Institute for Research on Public Policy and host of the Policy Options podcast.

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