Tax and Regulate

How the SAFE Banking Act Means Equity

The emerging cannabis industry — with $17 billion in sales this year — is currently troubled by a lack of racial diversity within its ranks. It is impossible to ignore the fact that members of the African American community and other racial minorities have paid a particularly high price in the war on cannabis. When the business community that follows legalization leaves behind people of color, there is cause for concern. 

Recently, equity in the cannabis industry has moved to the forefront of many legalization discussions around the United States. It became the most significant issue in passage of Illinois’ recent legalization bill, and equity remains central in the discussions in New Jersey and New York. It can include many facets — from additional points on license applications for minority-owned businesses to incubator programs that help businesses get off the ground.

Yet, the single biggest advancement in equity in the near term will come from an unlikely and perhaps even unremarkable source — access to regulated financial services. 

African Americans have access to far less wealth than their white counterparts. As a result, it has been difficult for black entrepreneurs to enter into the cannabis industry, which has relied on private equity to seed business opportunity. Opening banking services to the cannabis industry helps not only existing companies, but also minorities seeking access to that industry. 

For example, many of the specific equity policies that states are putting in place require banking services to be meaningful. In Illinois, the state’s new landmark law to legalize and regulate cannabis establishes a fund to provide tens of millions of dollars in grants and loans to social equity applicants. Yet it remains to be seen if the financial institutions that serve the state will be willing to provide the banking services necessary to implement that portion of the law. The SAFE Banking Act would create a “safe harbor” for banks that provide small business loans, which could help level the playing field and increase opportunities for diverse representation within the cannabis industry.

Additionally, the SAFE Banking Act would establish important reporting requirements that do not exist today. It would mandate an annual report to Congress on access to financial services for minority- and women-owned cannabis businesses and recommendations to expand access for them. It would also require the Comptroller General to study barriers to marketplace entry for minority- and women-owned cannabis businesses and report to Congress on recommendations.

Members of Congress should allow banks to provide financial services to cannabis businesses. This creates access to resources for minority and women entrepreneurs and increases the chances for success in state equity initiatives. The SAFE Act is the best next step toward establishing a more equitable cannabis industry in the U.S.


Steven Hawkins, Executive Director, Marijuana Policy Project

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Prohibition

Injustice in NYC: marijuana arrests far more likely for minorities

We’ve known for years that marijuana laws disproportionately harm people of color, but the results of a recent New York Times investigation are still shocking. According to the report:

  • Black New York City residents are eight times more likely to be arrested for marijuana possession than whites; Hispanic residents are five times more likely.
  • During the first three months of this year, 89% of the 4,000 marijuana arrests in New York City were Black or Hispanic.

It doesn’t make sense to arrest an adult for possessing or consuming marijuana, but the racial disparities in these arrest rates make the injustice of marijuana prohibition even more intolerable.

The situation in New York City is so morally indefensible that the Manhattan district attorney announced his office will no longer prosecute low-level marijuana cases, and Mayor Bill de Blasio is directing police to stop arresting people for public consumption of marijuana.

Those are positive steps, but the solution is to repeal the destructive policy of marijuana prohibition.

 

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Prohibition

2011 New York City Marijuana Arrests Even Higher Than Previous Year

Last September, after activists brought attention to the fact that New York City is the misdemeanor marijuana arrest capital of the United States despite marijuana being “decriminalized,” Police Commissioner Raymond Kelly directed the NYPD to respect the rules of “stop and frisk” and not charge those found with marijuana in their possession with a criminal charge unless the marijuana is in plain view or being smoked. New York cops have traditionally gotten around this rule by tricking people being frisked into exposing their marijuana. Research has shown that this ploy is used far more on minorities in New York City, despite higher use rates among whites.

Kelly’s statements were admirable and at first seemed to work. For the first several months, marijuana arrests in the city dropped.

According to the Drug Policy Alliance, however, the total number of marijuana arrests for 2011 is actually greater than the previous year!

How could this be? Was there an explosion in marijuana use in New York City in the last year that led to more arrests? Doubtful.

Did some members of the NYPD simply ignore the Commissioner and carry on with their illegal, racist enforcement tactics? Probably.

Let’s see what Commissioner Kelly had to say:

“The numbers are what they are, based on situations officers encounter in the street,” Kelly said at an unrelated press conference Wednesday. “It’s very difficult to quantify whether or not what’s happening [out there],” he said.

The first sentence does not make a lot of sense and would require a massive increase in the number of people openly using marijuana to explain the arrest numbers.

The second sentence … isn’t even a sentence, much less a statement.

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Prohibition||Video

Rep. John Conyers Says Marijuana Should Be Decriminalized

At a press conference at the National Press Club on Friday, representatives of Institute of the Black World, as well as Rev. Jesse Jackson, Ethan Nadelmann of the Drug Policy Alliance, and others met to look at the impact that our nation’s failed war on drugs has had on minorities. One of the ideas mentioned most frequently to eliminate some of the negative effects of the drug war was to remove criminal penalties for possession of small amounts of marijuana.

While this is not a very radical statement, and does not address the problems associated with maintaining criminalization of the marijuana market, it is definitely a step in the right direction. It was little surprising coming from Rep. John Conyers (D-Michigan), who said he had never made such a statement before:

Good for you, Rep. Conyers! Now we just need the rest of Congress to come around.

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Prohibition||Research||Tax and Regulate

Are California’s Cops Donating Money to Keep Targeting Minorities?

A new study released today shows conclusively that in California’s largest cities African-Americans are arrested for marijuana possession at much higher rates that whites. In the 25 cities profiled, African-Americans were arrested at four to 12 times the rate of whites, despite much higher use rates among whites.

This horrifying disparity is one reason Proposition 19 has earned the support of civil rights groups, including the California NAACP and the League of United Latin American Citizens of California. These numbers make it clear that removing penalties for marijuana possession would eliminate a tool that has been used to institute a system of pervasive racism in the Golden State. Given that even a single possession charge can result in severe economic and social consequences, the fact that arrests are focused so disproportionately on minority communities is an overwhelming argument for reform on November 2nd.

Some folks disagree, namely the majority of California’s law enforcement community. Several law enforcement groups have given large sums of money to the campaign against Proposition 19, the most recent being the California Police Chiefs Association, who donated $20,000 to No on Prop. 19.

Throughout the public debates on this issue, law enforcement groups (other than those backing Prop 19) have said that reformers need to prove why marijuana should not be illegal. It seems much more reasonable to expect the burden of proof to be on the other side, especially when marijuana prohibition results in such obvious racial persecution. Yet law enforcement does not rise to this challenge, probably because there is no justification for such practices in a civilized society.

Could it be that some California cops actually like targeting minorities?

If Proposition 19 passes, they will lose their easiest way to do so.

Interestingly, the largest law enforcement group supporting Proposition 19 is…

…the National Black Police Association.

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