Economic Justice is Part of Marijuana Justice

By Anh-Thu Nguyen | February 15, 2021

After many years of hard work, New York is closer than ever to legalizing marijuana sales for adult use. With full backing from Governor Cuomo and the state’s legislative leaders, there’s little question that taxed and regulated cannabis will be coming to the Empire State in the near future. Advocates from across the political spectrum must ensure that marijuana is not just legalized but regulated in the most equitable way possible.

In recent weeks, Governor Cuomo declared that any new reforms must “directly support the individuals and communities that have been most harmed by decades of marijuana prohibition.” That is the right sentiment, but it must be backed up by ironclad language in the law.

At the same time the marijuana reform debate is coming to a head, New York is facing an unprecedented economic crisis in the midst of a still-raging pandemic that has disproportionately impacted communities of color. Not coincidentally, these are the exact same neighborhoods that have been decimated by years of over-enforcement and over-incarceration as part of the failed war on drugs. Any solution must address inequity comprehensively.

In that vein, creating a system of marijuana cooperatives presents a rare win-win for the state budget and the communities that deserve economic justice. These small businesses, where workers have an ownership stake in the company, must be a centerpiece of New York’s marijuana law reforms. Indeed, the Marijuana Regulation and Taxation Act (MRTA), sponsored by Senator Liz Krueger and Assembly Majority Leader Crystal Peoples-Stokes, places worker cooperatives front and center – one of the reasons this legislation is the gold standard proposal to advance the cause of marijuana justice.

Small businesses owned and run by their workers have a long history as a powerful tool for working people to access the opportunities afforded by business ownership, including better jobs and building wealth in their communities. Worker cooperatives operate explicitly for the benefit of their working members, and the results are clear: for employees with ownership stakes, median household net worth is 92% higher; median income from wages is 33% higher; and median job tenure is 50% higher than employees without ownership. More than 50% of worker cooperatives in the U.S. are owned by people of color and immigrants, and 60% of worker cooperatives are owned by women. In New York State, these numbers are even higher. In a worker-owned business form, profits go directly to the workers—and stay in the local economy.

The MRTA establishes a licensing system that prioritizes small businesses and family farmers, not large corporations, including co-op and microbusiness licenses that can reduce barriers to entry for people with fewer opportunities to access capital and other traditional financing options.

Instead of replicating the existing economic power structure by letting giant corporations bigfoot local businesses, the MRTA offers a new paradigm. Its framework guarantees that communities of color – from Buffalo to the Bronx – directly share in the economic proceeds instead of waiting for a trickle down that never arrives. . Akin to the rise of New York’s craft wine and beer industries, a regulated marijuana market could also provide opportunities for small businesses in communities across the state to cultivate a business model that is not reliant on access to an astronomical level of capital but is instead dependent on local resources and ingenuity.

Overall, a new report projects that legalizing and regulating cannabis in New York can generate a total economic output of $6.1 billion, create more than 50,000 jobs and yield $765 million in tax revenue statewide by 2027. That’s on top of $2.2 billion in worker pay. In addition to bolstering tax revenue reinvestment and direct economic benefits, the MRTA establishes a permanent revenue stream to earmark marijuana tax dollars directly for community reinvestment, public education, drug treatment and other programs.

It’s irresponsible to let billions of dollars in marijuana sales bypass the state, and it’s shameful to do nothing as jobs in hard-hit communities continue to be lost. The time has come to pass the Marijuana Regulation and Taxation Act and construct a new national model that delivers on the twin promises of economic and social justice. In fact, this is the optimal way to Build Back Better.

Anh-Thu Nguyen is Director of Strategic Partnerships at Democracy at Work Institute.