What Do Cannabis Entrepreneurs Owe Victims of the Drug War?

Overregulating the cannabis market to right past wrongs won't work.


Cynthia Nixon speaks at the NYC Cannibas Rally in Union Square, where activists gather to advocate for legalizing marijuana in New York State. Photo credit: Catherine Nance/Polaris/Newscom

"As public opinion has shifted toward legalization, rich white men like [former Rep. John] Boehner and the mega-corporations they serve are trying to cash in," writes New York gubernatorial candidate Cynthia Nixon. "We can't let them rake in profits while thousands of people, mostly people of color, continue to sit in jail for possession and use."

Those prisoners shouldn't be sitting in jail. But Nixon goes off track when she starts looking for ways to help the black and Hispanic communities that have been disproportionately harmed by prohibition. Rather than just calling for full legalization, she calls for

models similar to those created in places like Oakland, which sets aside half of its marijuana licenses for low-income residents who have been convicted of a marijuana-related crime or who live in a community targeted by the drug war. And in Massachusetts, the new statewide marijuana equity program provides additional support, including loans and technical support to applicants from impacted communities.

Using government licenses to privilege blacks and Hispanics over "rich white men" seems like a recipe for turning the industry into a tool of patronage politicians. There's also a long history of white contractors gaming rules that are supposed to help minority-owned businesses (here's an example from 1979 and another from 2013), and I don't think applying that template to the cannabis industry is going to do any more to reduce urban poverty. Better to lift the caps and open the market to all.

And yes: As in most other licensed industries, legislators in legal pot states prohibit many people with criminal records from working in the marijuana biz. Nixon is right that those restrictions should be abolished, but why limit that action to marijuana jobs?

Nixon also criticizes the New York Medical Cannabis Industry Association for suing the New York Health Department to stop the agency from doubling the number of licensed medical cannabis growers. The association argued that New York's law caps the number of growers at five, and that to expand the number of licenses (to 10) would make it harder for the incumbent license holders—backed by more than $50 million in venture capital—to turn a profit.

This kind of rent-seeking is infuriating, and she's right to denounce the suit. Yet I'm not sure the racial problems that Nixon notes would be solved by doubling (or tripling or quadrupling) the number of licensed growers in New York and requiring that some of them be people of color. Denver has 720 retail cultivators and 509 retail dispensaries, and yet the city continues to disproportionately arrest black and Latino residents for marijuana offenses. The same is true in Washington, D.C., where pot arrest rates have fallen but black residents still bear the brunt of enforcement.

So long as there are laws around who can grow and sell marijuana, people of color will be arrested for violating marijuana laws. If there are abundant jobs in the legal marijuana sector (as in Denver) or no constraints on who can grow marijuana (as in D.C.), the police can still disproportionately arrest people of color for public consumption and underage possession. Diversity quotas for licensing and public financing for minority entrepreneurs are shiny, low-impact proposals for a problem that will likely outlive the drug war writ large.

Nixon comes much closer to proposing something genuinely radical when she quotes Michelle Alexander on reparations:

"Here are white men poised to run big marijuana businesses, dreaming of cashing in big—big money, big businesses selling weed—after 40 years of impoverished Black kids getting prison time for selling weed, and their families and futures destroyed. Now, white men are planning to get rich doing precisely the same thing?"

"I think we have to be willing, as we're talking about legalization, to also start talking about reparations for the war on drugs, how to repair the harm caused."

Sen. Cory Booker (D-N.J.) tried to advance something like this in the Marijuana Justice Act of 2017. His proposal: a $500 million-a-year Community Reinvestment Fund, appropriated by Congress, to be spent on costs related to expungement as well as "public libraries, community centers, and programs and opportunities dedicated to youth." I didn't care for Booker's bill because it contains provisions almost certain to drive conservatives and law enforcement away from the bargaining table. I also think the aforementioned fund would end up benefiting politically connected developers more than at-risk kids.

But I think we should at least debate the merits of (and mechanisms for) compensating people who have served time for drug offenses. Last year, transhumanist Zoltan Istvan made the case here at Reason:

It wasn't just the defamatory criminal sentence many of us received. The government confiscated my Jeep Comanche and my beloved Honda motorcycle during the ordeal. What little money I had I spent on lawyers and judicial filings in our convoluted court system. My total financial loss a quarter of a century ago was $20,000 dollars. Had I been able to invest that money in the stock market, for example, I'd have over $100,000 now.

Some of us also want compensation for the financial damage forced upon us—for the literal theft of our property. Maybe that means a class action lawsuit insisting on government reparation for all damage caused, maybe in the form of tax credits or proceeds from the sale of unused Federal land, so as not to abuse the American taxpayer further over the drug war. It's safe to say—given the damage caused and the lives affected—such a suit would likely be in the billions of dollars.

Jonathan Rauch wrote about reparations for Reason back in 2001, arguing that we should compensate blacks who were forced to attend segregated schools just as we compensated Japanese-Americans who'd endured internment. (The Civil Liberties Act of 1988, which ordered compensation for living Japanese-Americans, turns 30 this August.) Rauch's argument against reparations for slavery—that we cannot punish living whites for the sins of their dead ancestors—does not undermine the case for compensating prisoners of the drug war, who were incarcerated by the political choices of their free neighbors. Straight cash seems like the right way to go about it.