Tuesday, March 21, 2023
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In the Weeds: Shift in Social Equity Emphasis May Be What's Next

New York Model Steals the Limelight While New Mexico Finds its Footing


New York and New Mexico are as different as strip steak and carne asada in many ways, their regulatory frameworks for the cannabis industry included. 

But the Empire State’s innovative approach to prioritizing social equity candidates shines light on New Mexico’s progress toward achieving the same goal of giving preference to those who have been disproportionately impacted by the War on Drugs, as well as underrepresented groups like low-income earners, farmers and Tribes.

Adult-use sales haven’t begun yet in New York but state officials aim for the first adult-use retail shops to open by the end of the year. And the first batch of retail licenses are supposed to go to social equity candidates under what Gov. Kathy Hochul is hailing as a “first of its kind approach” that will serve as a national model.

The Seeding Opportunity Initiative gives priority to social equity applicants – those regarded as having been disproportionately affected by cannabis prohibition.

To qualify, an individual or a member of an individual’s family must have been arrested in New York state for a cannabis offense prior to March 31, 2021. They must also have operated a profitable business, legally, for at least two years.

The New York Office of Cannabis Management received more than 900 applications by the late September deadline for an initial wave of up to 150 conditional retail licenses.

In addition, the state established a $200 million social equity investment program.

Seven months after commercial sales began in New Mexico there’s still no social equity program to speak of under the Cannabis Control Division, the state’s regulatory and licensing agency. While New Mexico has issued more than 1,000 cannabis parent licenses, there’s nothing to indicate that any of them earned a license as a social equity beneficiary. 

To be fair, state legislators and the governor gave state officials just a matter of months to start a new state agency from scratch, hire staff, install systems, promulgate rules and start issuing licenses prior to the start of commercial sales in April.

That’s not to say New Mexico has totally missed the boat on social equity. The Legislature didn’t cap the number of licenses the CCD can issue, an approach regarded as favorable to the underserved in that they can’t be shut out from getting a license while competing against large, well-financed, well-resourced companies – many from out of state – for a limited number of licenses. 

But now that so many are licensed, they’re in competition with those same well-financed, well-resourced companies in the commercial marketplace where the playing field isn’t so level. 

With so many retailers already licensed, it’ll be interesting to see how many of them can stay in business through the long, cold winter. 

New Mexico’s approach to social equity may have to shift from prioritizing licensing for those who have been disproportionately impacted by the War on Drugs to keeping them from being disproportionately impacted again.

(Editor’s Note: T.S. Last formerly worked in policy for the Cannabis Control Division.)


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