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With only one Black-owned business selling medical cannabis in New Jersey nearly a year after the opening of the recreational market, a member of the Cannabis Regulatory Commission on Thursday suggested an idea: delay approving more licenses until minority applicants have the chance to compete.
Commissioner Charles Barker told his colleagues during their monthly meeting that his reading of the law Gov. Phil Murphy signed in 2021 gives the commission the authority “to make decisions based on market needs and what the market demands.”
“Based on the … failed War on Drugs, based on the main reason why we legalized marijuana in every state is to address the harm among certain groups — specifically the Black and brown groups — the market needs and demands more Black and brown businesses in order to establish a more equitable foundation,” Barker said.
“I am confident we can do better. I know we can do better,” he said.
It was the most substantial conversation at a public meeting about the racial inequities of what many predict will be a multi-billion-dollar market. Prior to legalizing the use and possession of weed two years ago, Black people in New Jersey were 3-1/2 times more likely to be arrested for marijuana possession than white people, even though they usage rates are about the same. Giving people of color a chance to join the legal market was a major debate in legalizing cannabis.
But the state Legislature gave medicinal marijuana growers and sellers got the first crack at the 21-and-over market when it opened April 21, 2022, and these companies are nearly all multi-state operators led by white people. The halting pace of expansion has made the commission a target of criticism that people of color are being left behind.
“[The state] really created a monopoly with the multi-state operators, giving them first preference,” said Suzan Nickelson, who made history for being the first Black female cannabis entrepreneur to open a medical dispensary in South Jersey, Holistic Solutions. “They’ve really capitalized in a market that was supposed to be stood up on the backs of us during legalization — for those who were the most harmed.
“To date we don’t have any Black and brown companies participating in the adult-use market. So, for us it’s really holding the government’s feet to the fire,” she said at a recent panel at a Howard University forum, where a group of New Jersey minority cannabis entrepreneurs spoke.
For his part, Barker has been a vocal critic and many times voted against applicant approvals because of the lack of diversity. While there is one medicinal cannabis operator, there are still no retail operators or cultivators, for instance.
To help minorities, women, veterans, come from a low-income community or have a prior marijuana arrest, the commission’s staff review their applications ahead of other competitors.
The state Economic Development Authority recently announced a $10 million grant program for newcomers to the cannabis market, with 40% of awards going to social equity applicants — people who had marijuana convictions or come from disadvantaged communities — and 5% for license holders who plan to operate in “impact zones,” and people who come from communities disproportionately affected by the War on Drugs.
Dianna Houenou, the commission chairwoman, asked Barker to explain what he meant by saying “we” could do better.
“We as board members can’t control the makeup of these businesses,” she said. Houenou added: “We make a ton of information available on our website. … We want to see everyone who wants to join us in this regulated industry.”
Barker suggested one way equity could be achieved faster is for the commission to delay approvals until more diverse businesses got off the ground.
“I believe we have the power to go slower and not necessarily roll it out in a manner that creates more market but more equitable opportunity. We can be more patient until it is a more level playing field. We can propose parity, so people can start on equal footing,” Barker said.
Jeff Brown, the executive director, said the numbers are better than they appear and the future looked promising. Prior to Thursday’s vote, one in four business owners whom the commission had approved to grow, manufacture and sell cannabis products are Black owned.
Of the 17 annual licenses the commission acted on during the meeting, 12 are “diversely-owned,” which means they are run by women, minorities or veterans, or a combination of those groups, Brown said. “We can always do better. I am confident this will improve.”
Brown said more data would be available at the next meeting in April.
“We are committed to being fully transparent as to how this market is developing,” he said. “I can tell you this is developing to be one of the most diverse markets in the country.”
Vice Chairman Sam Delgado cautioned they needed to be “judicious in our approach.“ The commission had approved just one majority Black-owned business applicants at the meeting, he said. Delaying the vote wouldn’t have been fair to that minority applicant.
“We can be more patient but how do we know if the businesses can be more patient? They have to pay their landlord, they have to pay their legal fees, their consultant’s fees,” Delgado said.
Charles Gormally, a cannabis attorney with Brach Eichler in Roseland, said he didn’t hear Barker’s suggestions. But when presented with a summary of Barker’s comments, Gormally questioned the fairness of changing the approval path at this point.
“The CRC has always indicated that they would move applications through the process as fast as they were able to, after providing applicants with priority consideration when they meet the requirements for priority evaluation,” Gormally wrote in an email to NJ Advance Media. “If I followed the process, got priority consideration, got my conditional (license) and then converted to an annual (license), I would be a bit put off by the CRC changing their glidepath to licensure now.”
“I don’t think it presents a pitfall per se or that it would legally be wrong to do so,” he added.
Among the 17 annual licenses approved, the commission also voted to allow the medicinal dispensary BLOC, formerly Justice Grown, in Ewing and Franklin Township in Somerset, to also serve the 21-and-older market.
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Susan K. Livio may be reached at email@example.com. Follow her on Twitter @SusanKLivio.
NJ Advance Media reporter Jelani Gibson contributed to this report.