Social equity is an important part of any forward-thinking cannabis regime. Some states do it better than others, and not all social equity policies are equal – but any state wishing to move forward with a robust program that benefits all of its citizens must be mindful of the advantages of including social equity policies and diligent in seeing those policies through.
Alabama’s Medical Cannabis Social Equity Policy
Alabama is no exception, and Alabama’s medical cannabis program contains a social equity component. Specifically, Alabama provides by statute that the Alabama Medical Cannabis Commission “shall ensure” that a fifth of all integrated facility licenses and a fourth of all other licenses:are awarded to business entities at least 51 percent of which are owned by members of a minority group or, in the case of a corporation, at least 51 percent of the shares of the corporation are owned by members of a minority group, and are managed and controlled by members of a minority group in its daily operations.For purposes of this requirement, “minority group” means individuals of African American, Native American, Asian, or Hispanic descent. Reasonable people can disagree about whether a fifth or a fourth of licenses is sufficient to accomplish the goal of meaningful social equity, or whether the Alabama Legislature’s approach to social equity is an appropriate framework. Those are important questions that need to be answered, but they are beyond the scope of this post, as this post focuses on a more immediate (not more important) potential consequence of the social equity regime set out by the Alabama Legislature. Specifically, what happens if an insufficient number of minority applicants submit applications such that the commission is unable to award the full number of available licenses? Similarly, what happens if a sufficient number of these applications are submitted but not all satisfy the criteria required for licensure? This is not merely a thought exercise or a hypothetical. As just one example, we know that the commission is authorized to award up to 12 cultivation licenses. We also know that there were 12 applications for cultivation licenses submitted by the December 30, 2022, deadline. At first blush, this seems like great news for the cultivation applicants – everyone who applied gets one, right? But what if only two “minority groups” submit a qualifying application for cultivation? Under the plain text of the statute, one could credibly argue that no more than eight cultivation licenses may be awarded. Any more than that would mean that minority groups were not awarded a fourth of the cultivation licenses. By that logic, what if only one “minority group” submits a qualifying application for cultivation? Or what if none do so? In the latter case, one could argue that no cultivation licenses may be awarded by the commission because even if only one non-minority license is awarded without any awarded to a “minority group,” then “minority groups” would not represent a fourth of cultivation licenses awarded. The same issue applies for all types of licenses. For example, the AMCC received only three applications for testing laboratories. If none of those are “minority groups,” then the same scenario applies.