Greenlining

Restrictive zoning policies, overly broad qualifying criteria and ‘flat-out greed’: Licensees in Colorado’s cannabis industry social equity program say, one year in, the playing field is far from level

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Ari Cohen qualified because he was once busted with more than 40 pounds of pot. Aja Palomino was stopped in Wyoming with an eighth of weed in her car. Sarah Woodson’s husband had a pound of marijuana on him. For Chris Chiari, it was a sibling’s multiple marijuana arrests that qualified him for Colorado’s cannabis-industry social equity license.

Colorado has approved 69 social equity licensees since launching the program in April 2021, an attempt at “fostering an inclusive and equitable cannabis industry … that acknowledges the effects of decades of criminal enforcement of marijuana laws on communities of color,” according to the Marijuana Enforcement Division (MED). 

Even today, eight years into recreational legalization in Colorado, Black residents are still more than twice as likely to be arrested for cannabis as white residents, despite usage rates being similar. Ownership in the cannabis industry is equally lopsided: The MED reports that those who disclosed themselves as Caucasian held 82.3% of owner licenses, compared to 3.1% of those who disclosed themselves as Black and 8.2% for Hispanic/Latino.

Simply put, the social equity program was created to give those negatively impacted by the war on drugs—predominantly Black and Brown folks—a path into the cannabis industry. But a year in, interviews with five qualifying licensees (plus another half dozen industry folks) reveal shared frustrations with the program—from restrictive zoning policies to overly broad qualifying criteria, a lack of collaboration and “flat-out greed”—and a general consensus that it’s not leveling the playing field the way it was intended to.

“All the big (cannabis) companies have found ways—all of the rich white people have found ways—to wiggle their way into the front of the line on the equity programs—it’s happening everywhere,” says Wanda James, owner of Simply Pure, the first Black-owned dispensary in the U.S., with locations in Denver and Edgewater. James is not a social equity licensee, but with lobbyist Samantha Walsh, James has been a vocal proponent at the state Capitol for creating legislation and policy that open the cannabis industry up to communities of color. 

“[The cannabis] industry was built on the backs of Black and Brown people; Black and Brown communities were destroyed [by the war on drugs]. Mass incarceration is directly linked to cannabis,” James says. “So this is why ownership and equity, the opportunity to be on boards, to be directors, to be in the C suites, to be in the management offices, all of these things should be taking place in this industry right now, because none of these [multi-state operators] would be making $1.3 billion if it wasn’t for Black and Brown people.”

Hemp was crucial to colonial America—clothes, canvas for ship sails, etc.—and enslaved African people worked the hemp fields for white colonists. In his book Marijuana: A Short History, John Hudak explores how politicians across the political divide spent most of the 20th century using marijuana to create laws playing “on some of America’s worst tendencies around race, ethnicity, civil disobedience and otherness.”

James expresses frustration at who has received some of Colorado’s first social equity licenses, pointing to white applicants Ari Cohen, co-founder of doobba delivery service, and Chris Chiari, owner of Patterson Inn, where Chiari plans to open a marijuana lounge. 

“Equality really is just giving people the equal opportunity to the same resources, but equity, I think, [takes] different circumstances of different people into consideration,” Cohen says. “I personally don’t feel that there’s a race aspect attached to it.”

Where the exact language of the qualifying criteria for the social equity application is concerned, Cohen is right. Applicants must fall into just one of three parameters to qualify: 1) residing for at least 15 years between 1980 and 2010 in an economically distressed area, often called an Opportunity Zone; 2) having themselves or a parent, legal guardian, sibling, spouse, child, or minor in their guardianship been arrested for a marijuana offense, convicted of a marijuana offense, or been subject to civil asset forfeiture related to a marijuana investigation; or 3) have a household income that did not exceed 50% of the state median income.

But Cohen, arrested with more than 40 pounds of cannabis in his position nearly 30 years ago while in college, also doesn’t think the social equity program is helping the right people the right way. 

“If two of the three [qualifying criteria] have to do with economic reasons, then how can somebody [who] qualifies under [either of] those two circumstances be able to afford the licensing at the state or local level? It almost seems impossible,” Cohen says.

For a retail marijuana store in Colorado, it costs $5,000 for the application and another $2,400 for the license, not to mention the hundreds of thousands of dollars it takes to secure a location, hardware and software for sales transactions, products, employees, marketing and more. Cohen says he and his wife have been advocating for the state to either waive or credit back licensing fees for social equity applicants. 

“There were no reductions in fees” for social equity applicants says Chiari, who was among the first in Denver to submit a cannabis hospitality license (the first hospitality license went to Tetra Lounge in Denver—also a white owner). “Those carrying costs become burdens that in no way have been relieved through this new licensing.” 

As for being “a white face in the social equity application,” Chiari says, “I don’t feel like I’ve taken advantage of anything.” While declining to go into details about his sibling’s marijuana-related arrests, Chiari says there’s “trauma related to that narrative.” 

Hermine Ngnomire, a social equity licensee based in Longmont, doesn’t take issue with people like Chiari—someone capable of purchasing a hotel in Denver’s Cap Hill—participating in the social equity program, nor does she begrudge the way he qualified for the program through a family member’s marijuana arrest. 

“My issue is not that he’s been successful in life—kudos, we should want people to be successful,” says Ngnomire. But she does believe the qualifying criteria for social equity licenses are overly broad. Her solution would be to add another criteria for public housing, and require applicants to meet two out of four criteria, rather than just one of three. “That’s the way to get around some of these shenanigans,” she says.

In Denver, dispensaries must be 1,000 feet away from schools, childcare facilities, drug treatment facilities and other dispensaries. Many say such set-back rules are particularly detrimental to social equity applicants. Denver’s Baker, Five Points, Northeast Park Hill, Overland and Valverde neighborhoods—all predominantly Black and Brown—are unavailable due to regulations that aim to prevent an “undue concentration” of dispensaries like what resulted in Denver’s “Green Mile” on South Broadway.

“Many people, myself included, are calling [this] the new version of redlining,” Ngnomire says. “Call it redlining, weedlining, greenlining—they’re screwing over Black and Brown people by saying any new entrants into the [cannabis] space will not be afforded the same opportunity to put up their dispensaries in markets, on streets, that actually can make them profitable. … The most appropriate place to put the next dispensary is within two feet of another dispensary. So it needs to be allowed across the board for social equity.”

Regarding social equity delivery licenses, Ngnomire joins all other social equity applicants interviewed for this story in a chorus of displeasure. The city of Denver has placed exclusivity on social equity delivery licenses through 2024 (meaning only social equity applicants can obtain delivery licenses between 2021 and 2024). Municipalities decide for themselves whether they allow delivery services, with only a handful of Colorado cities—including Denver and Aurora—choosing to do so. Neither the state or the city of Denver has codified any requirement that dispensaries pair with social equity delivery services.

“Delivery companies are seemingly sitting in limbo,” Chiari says—dispensaries could fortify another layer of the industry by using the delivery companies that’ve recently begun operating, and “yet there seems to be a reluctance to embrace.” As a hotel, the Patterson Inn wouldn’t be eligible to contract a delivery service (regulations prevent delivery to anywhere other than a private residence). “Everyone’s just waiting for their bite at the apple,” he adds. “[Dispensaries are] almost waiting out those three years, and then they’ll bring it all in-house. That frustrates me.”  

Sarah Woodson, whose grassroots organization The Color of Cannabis was deeply involved with social equity policy creation at the Capitol, says her delivery business, High Demand Delivery, only has one client in Aurora: Terrapin Care Station. 

“In Denver there’s 209 [dispensaries], and maybe about eight of them deliver,” Woodson says. “And the one social equity person that happens to be a white guy has the majority of all the contracts. … The elephant in the room is always the race thing, because [dispensaries will] work with a white social equity person that applied from a criminal background, but [they] won’t give a Black or Brown person that same opportunity.” 

Woodson’s biggest gripe, however, is with a lack of fidelity between Black cannabis-business owners. 

“It’s not the Ari Cohens of the world” who are the problem in social equity, says Woodson. “The question is, really: Wanda [James], why don’t you do delivery?” 

She also points to other Black-owned cannabis businesses in the Denver area. “What are [they] doing to help?” Woodson asks. “The conversation isn’t going to be about race. They’re going to say the exact same thing that any other industry person will say to you: [delivery] doesn’t work. It doesn’t make any money. But I personally know that they are going to do it themselves. So, you’re going to do the same thing the white guy is doing before you hire a person of color to do your delivery?  

“You guys have access, you have power, you have experience, but you’re doing the exact same thing. And why? Because you don’t want to share your money,” she adds. “It’s flat-out greed. Nothing more, nothing less.” 

When asked via email why Simply Pure didn’t pair with a social equity delivery service, Wanda James replied: “Because of the cost, we don’t see an upside to making that business model work.” 

The city of Boulder currently only allows delivery of medical marijuana, according to licensing manager Mishawn Cook. And unlike Denver, which has prioritized social equity licenses until 2027, Boulder has placed no focus on social equity applications, nor has the city opted into recreational delivery or hospitality.

“The reason you haven’t seen anything happening in Boulder around social equity is because you need new licenses to attach social equity to,” says Peter Marcus, communications director for Terrapin Care Station. Speaking on behalf of Terrapin colleague and former Cannabis Licensing and Advisory Board member Ashley Rhinegold, Marcus explains that Boulder is “more or less saturated in terms of dispensaries at this point. So we’ve been talking with the Cannabis Licensing and Advisory Board (CLAB) for years now about delivery, and about cannabis hospitality, lounges and stuff like that. It’s a broken board. It doesn’t move anything forward, really, just a lot of talking. So we’ve been encouraging the board to create new delivery and hospitality licenses, so that you can create new opportunities for Black and Brown entrepreneurs to get in.”

Despite all of the frustrations, all social equity applicants expressed hope that the program could be improved. In March 2021, Gov. Polis signed a measure securing $4 million for loans, grants and technical assistance to social equity marijuana licensees. Applications for the first round of funding closed on April 11. 

“I put my blood sweat and tears into [helping craft] the social equity program, so I know that it is an ongoing process,” Woodson says. “People don’t understand: Change is incremental. When Amendment 64 first passed there was legislation on the state and local level every year, every month to get to the point where we’re at, where the existing industry has their stake. We’ve only been working at [social equity] for two years. The work doesn’t stop at year two.”

Cohen says he sees how hard people like Woodson and James are working to bring equity to fruition, “lobbying and pushing for the legislation.”

“Now it really requires officials at the state level and at the local level to look at the program,” Cohen says. “We’re telling them what needs to happen for it to be improved, to honor all the work that people like Sarah have done. If you’re saying that you want the program to be successful, you have the social equity community telling you things that we think are wrong with the program that can be improved. You’re hearing the same things. Just can you do it now? Can you do something?” 

Corrections: An earlier version of this story incorrectly stated that Wanda James’ dispensary was called Pure Genesis. It is Simply Pure. It has been updated to reflect these changes.

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