More Than One-Third Of Minnesota Adults May Qualify For Marijuana Social Equity Business Licenses Under New Rules

Lawmakers “tried to loop in all these other groups that weren’t very well defined, and it’s because they really wanted to put race in the bill.”

By Christopher Ingraham, Minnesota Reformer

Between 30 and 40 percent of Minnesota adults could plausibly qualify as “social equity” applicants for cannabis business licenses, according to a  estimate based on the new equity rules approved by the Legislature this year.

Lawmakers initially created the social equity category as a way to prioritize business applications from Minnesotans who have been harmed by marijuana prohibition in the past.

“It is the state’s responsibility to undo” the harm of prohibition, Sen. Lindsey Port, DFL-Burnsville, told the  in March. “That means we have to aim the benefits proportionally at the communities that were harmed,” said Port, a chief author in the Senate.

But the social equity criteria written into law now include a number of economic and social measures that go beyond individuals and communities who have been targeted for past marijuana enforcement. They encompass anyone who:

• has lived for five years in a neighborhood where more than 20 percent of people are in poverty or on food stamps, or where the median income is less than 80 percent of the statewide or metro area;

• has lived for five years in a neighborhood with high levels of social vulnerability as defined by the Centers for Disease Control;

• is a military veteran or member of the National Guard;

• was convicted of a cannabis offense in the past, or had a close family member convicted of an offense;

• manages a small farm with less than $100,000 in annual sales;

• has lived for five years in a neighborhood that has seen a “disproportionate” rate of prior cannabis enforcement, as determined in a forthcoming study by the Office of Cannabis Management.

Rep. Nolan West, R-Blaine, was the only Republican member of the conference committee that hashed out differences between the House and Senate versions of this year’s bill. He says many Republicans supported the idea of granting social equity status to individuals with prior cannabis convictions and military veterans, but “then they tried to loop in all these other groups that weren’t very well defined, and it’s because they really wanted to put race in the bill.”

Numbers for the first three items on the list above can be estimated using federal data from the Census Bureau and CDC. Residents of more than one-third of the state’s 1,504 census tracts, which are small subdivisions of cities and counties, likely qualify based on the poverty, income, food stamp and social vulnerability criteria, provided they’ve lived in those neighborhoods for at least five years.

Roughly 1.1 million people—25 percent of the state’s 4.4 million adults—have lived at the same addresses within those tracts for more than five years, according to the U.S. Census data. Adding in the state’s 327,000 veterans, and then subtracting the roughly 100,000 veterans who live in the qualifying census tracts, brings the total up to 1.3 million adults, or a little over 30 percent of the total adult population.

This is a low estimate that doesn’t include prior cannabis convictions, which number at least in the tens of thousands and likely hundreds of thousands once family convictions are factored in. It also doesn’t include hundreds of small farm operators with revenue less than $100,000, or people living in neighborhoods that have experienced disproportionate cannabis enforcement, as the study to determine that hasn’t been released yet.

The estimate also uses a strict definition of time in residence that excludes an unknown number of people who move to a different home in the same census tract.

These numbers are hypothetical, and much will depend on how the Office of Cannabis Management interprets the language of the statute. Factors like poverty rate definitions, social vulnerability thresholds, and neighborhood delineations can all affect which geographic areas are ultimately included.

Other states have used similarly broad definitions in setting up their social equity programs, according to the Minority Cannabis Business Association, a trade group. The organization notes that living up to the promise of these programs has proven to be a challenge, and that “the use of non-race criteria in the social equity qualifications and definitions has not yielded diverse cannabis markets.”

This story was first published by Minnesota Reformer.

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