Struggling Through the Pandemic: Cannabis Social Equity During COVID-19

Abstract

In March 2020, in response to the COVID-19 national emergency, states across the United States began issuing shelter-in-place orders curtailing operations of individual businesses based on “essential” and “non-essential” classification. Virtually all states with legalized medical cannabis, and the majority of adult-use states, allowed cannabis establishments to remain open albeit often with significant restrictions on their operations. Yet, the cannabis industry, and small, minority-owned or social equity designated businesses in particular, are not insulated from the broader economic shockwaves spreading through the country. In April 2020, the Drug Enforcement and Policy Center conducted a survey asking patients/consumers and cannabis industry professionals about the challenges they were experiencing and government responses. Hoping to fill a gap in early discussions of the impact of the COVID-19 crisis, we were especially interested in the impact on cannabis industry participants designated as social equity businesses. The results indicate that the COVID-19 pandemic has both introduced tremendous new challenges for the cannabis industry and exacerbated long-standing difficulties for businesses in this arena. If small, minority-owned and social equity businesses are to survive, they need to be treated by the system like any other regular small business venture. While regulations and safeguards are necessary, these businesses need to be able to operate as a true business, rather than a semi-legal venture with no access to loans, banking, insurance, tax relief, and flexible deliverable modes.

Keywords: Cannabis industry, social equity programs, COVID-19 impact on business, small businesses, minority-owned businesses, marijuana legalization and reform