Social & Economic Equity

MRTA incentivizes participation in the new industry for individuals disproportionally impacted by cannabis prohibition, automatically expunges an individual’s past marijuana convictions, and invests 40% of the adult-use cannabis tax revenue toward rebuilding communities harmed by the War on Drugs.

Participation in the Cannabis Industry

MRTA establishes a robust social and economic equity program to prioritize and provide resources to members of communities who have been disproportionally impacted by the policies of cannabis prohibition, to participate in the new industry through the implementation of a social and economic equity plan. The MRTA establishes the role of a Chief Equity Officer within the OCM, who will be responsible for overseeing the social and economic equity initiatives of the Office.

MRTA Market Structure Benefits Social Equity – Two-Tier System

As social equity programs in other states have struggled due to barriers of entry for social and economic equity applicants (i.e., sufficient capital), MRTA seeks to tackle by establishing a two-tier market structure prohibiting licenses from being vertically integrated.

• Facilitates multiple opportunities for social and economic equity applicants and small businesses to apply for licenses.

• Adult-use microbusiness, cooperative, on-site consumption and delivery license types are all examples of low barrier-to-entry licenses, which the MRTA prioritizes for social and economic equity applicants.

• Licenses issued under the social and economic equity plan cannot be transferred or sold within the first 3 years of issuance, except to another qualified social and economic equity applicant with approval from the CCB.

• Additionally, all non-equity licensees are required as part of the application process, to develop and implement a social responsibility framework, which is designed to contribute to communities disproportionally harmed by cannabis prohibition and to annually report this progress to the CCB, as a condition of license renewal.

CCB, after receiving public input, will create and implement a social and economic equity plan to:

• Actively promote applicants from communities disproportionately impacted by cannabis prohibition, and promote racial, ethnic, and gender diversity when issuing licenses for adultuse cannabis related activities, including mentoring potential applicants and prioritizing applications from applicants who are members of communities disproportionately impacted by the enforcement of cannabis prohibition or who qualify as a minority or women-owned business, distressed farmer, or service-disabled veteran.

• Create an incubator program to encourage social and economic equity applicants to apply for licensure and to provide direct support in the form of counseling services, education, small business coaching, financial planning and compliance assistance. MRTA establishes a goal to award 50% of all adult-use licenses to social and economic equity applicants. Social and economic equity applicants include individuals who have lived in communities disproportionally impacted by the War on Drugs and other underrepresented groups including minority and women owned businesses, distressed farmers, and service-disabled veteran-owned businesses. The definitions of these groups as set out in the MRTA are outlined below.

(a) Individuals from communities disproportionately impacted by the enforcement of cannabis prohibition.

• CCB will issue guidelines to determine how to assess which communities have been disproportionately impacted and how to assess if someone is a member of a community disproportionately impacted.

• “Communities disproportionately impacted” means, but is not limited to, a history of arrests, convictions, and other law enforcement practices in a certain geographic area, such as, but not limited to, precincts, zip codes, neighborhoods, and political subdivisions, reflecting a disparate enforcement of cannabis prohibition during a certain time period, when compared to the rest of the state.

(b) Minority-Owned Businesses

• A business enterprise, including a sole proprietorship, partnership, limited liability company or corporation that is: At least 51% owned by one or more minority group members; “Minority group member” is a US citizen or permanent resident alien who is and can demonstrate membership in one of the following groups:

• Black persons having origins in any of the Black African racial groups;

• Hispanic persons of Mexican, Puerto Rican, Dominican, Cuban, Central or South American of either Indian or Hispanic origin, regardless of race;

• Native American or Alaskan native persons having origins in any of the original peoples of North America; or

• Asian and Pacific Islander persons having origins in any of the far east countries, south east Asia, the Indian subcontinent or the Pacific islands.

• An enterprise in which such minority ownership is real, substantial and continuing;

• An enterprise in which such minority ownership has and exercises the authority to control independently the day-to-day business decisions of the enterprise; » An enterprise authorized to do business in this state and independently owned and operated; and » An enterprise that is a small business.

(c) Women-Owned Businesses

• A business enterprise, including a sole proprietorship, partnership, limited liability company or corporation that is:

• At least 51% owned by one or more US citizens or permanent resident aliens who are women;

• An enterprise in which the ownership interest of such women is real, substantial and continuing;

• An enterprise in which such women ownership has and exercises the authority to control independently the day-to-day business decisions of the enterprise;

• An enterprise authorized to do business in this state and independently owned and operated; and

• An enterprise that is a small business.

(d) Minority and Women-Owned Businesses

• A firm owned by a minority group member who is also a woman may be defined as a minority-owned business, a women-owned business, or both.

(e) Distressed Farmers

• A NYS resident or business enterprise, including a sole proprietorship, partnership, limited liability company or corporation, that meets the small farm classification developed by the Economic Research Service of the USDA, has filed a Schedule F with farm receipts for the last 3 years, qualifies for an agriculture assessment and meets other qualifications defined in regulation by the board to demonstrate that they operate a farm operation as defined in section three hundred one of the agriculture and markets law and has been disproportionately impacted, including but not limited to incurring operating losses, by low commodity prices and faces the loss of farmland through development or suburban sprawl and meets any other qualifications as defined in regulation by board; or

• A NYS resident or business enterprise, including a sole proprietorship, partnership, limited liability company or corporation, that is a small farm operator and a member of a group that has been historically underrepresented in farm ownership and meets any other qualifications as defined in regulation by board.

(f) Service-Disabled Veterans

• A business enterprise, including a sole proprietorship, partnership, limited liability company or corporation that is:

• At least 51% owned by one or more service-disabled veterans;

• An enterprise in which such service-disabled veteran ownership is real, substantial, and continuing;

• An enterprise in which such service-disabled veteran ownership has and exercises the authority to control independently the day-to-day business decisions of the enterprise;

• An enterprise authorized to do business in NYS and is independently-owned and operated;

• An enterprise that is a small business which has a significant business presence in the state, not dominant in its field and employs, based on its industry, a certain number of persons as determined by the director, but not to exceed three hundred, taking into consideration factors which include, but are not limited to, federal small business administration standards pursuant to 13 CFR Part 121 and any amendments thereto; and certified by the office of general services.

(g) Extra priority shall be given to applications that demonstrate that an applicant:

• Is a member of a community disproportionately impacted by the enforcement of cannabis prohibition;

• Has an income >80% of median income of the county in which the applicant resides; and

• Was convicted of a cannabis-related offense prior to the effective date of this chapter, or had a parent, guardian, child, spouse, or dependent, or was a dependent of an individual who, prior to the effective date of this chapter, was convicted of a cannabis-related offense.