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EQUITY, CANNABIS, and the STATE of ILLINOIS Using the Illinois Cannabis Regulation and Tax Act As a Framework for Creating Equity for All

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EQUITY, CANNABIS, and the STATE of ILLINOIS Using the Illinois Cannabis Regulation and Tax Act As a Framework for Creating Equity for All Jared Lewis, MPP 12 Tone Consulting EQUITY, CANNABIS, AND THE STATE OF ILLINOIS Using the Illinois Cannabis Regulation and Tax Act as a Framework for Creating Equity for All www.EmergingEquity.us 1 ABSTRACT 1 OVERVIEW OF THE BILL 2 Licenses 2 Oversight and Administration 3 Legitimization Overview 6 Social Equity Program in HB1438 7 Summation of the Regulated Cannabis Market in Illinois 9 THE HISTORY OF SOCIAL EQUITY 9 Framing Social Equity 9 Categorical Assessments of Social Equity Programs 12 Defining Two Eras of Social Equity 13 The Evolution of Equity 15 Evidence of a New Era 17 The Growth of the Social Impact Organization and Management 17 Academic Discourse and Data Collection 19 The Technology of Social Movement: Civil Rights and Black Lives Matter 20 The New Era of Equity: Measured Equity 25 LEGISLATION IN A NEW ERA: HB1438 AND MEASURED EQUITY 26 Assessments of Equality in HB1438 26 Creating Equity versus Reform for Equity 27 Flowchart of Reparatory Investment Mechanism in HB1438 29 Corporate Citizenship and Social Enterprise 29 CONCLUSION 30 0 ABSTRACT recreational marijuana began two years prior. Through these discussions, the Existing literature is sparse in describing Gordon-Booth sought avenues to address Social Equity in the larger historical context minority barriers to participation in cannabis of society. This paper provides a succinct markets throughout the country, among chronology of how Social Equity evolved them being (1) access to capital, (2) into a formal framework, and it categorizes equitable participation, (3) community this chronology into distinct eras with reinvestment and (4) expungements for identifiable characteristics as evidenced by persons incarcerated for cannabis-related larger social change occurring within each offenses. These components comprise the era. Through contextualizing the recently Social Equity framework in HB1438.1 From passed HB1438, the Illinois Cannabis the perspective of many Illinois and national Regulation and Tax Act which includes a cannabis legalization advocates and sweeping Social Equity provision, this paper publications, HB1438 was transformational concludes that in consideration of the because it included the most history of Social Equity and current social comprehensive Social Equity framework to movements, principally the Black Lives a recreational cannabis bill created to date. Matter movement, HB1438 is indicative of a 234 HB1438 provided the most explicit, multi- new Era of Social Equity which is given the faceted provision seeking to invest in title The Measured Era of Social Equity. disenfranchised communities through state- Additionally, HB1438 provides a legislative level cannabis legalization. framework for advancing structural equity through cyclical investments and intentional A central feature of the Social Equity legislative design at a time when immediate framework is the Stated intent to address structural reforms to society are in demand. the systemic harms resultant of the War on Continued monitoring and analysis of Drugs. Section 7-1 of the bill outlines that, in HB1438 and its effects will inform the future the interest of “remedying the harms of Social Equity for years to come. resulting from the disproportionate enforcement of Cannabis-related laws”, the general assembly should offer (1) financial INTRODUCTION assistance and (2) license application benefits to individuals adversely impacted On May 31st, 2019, the Illinois legislature by this disproportionate enforcement.5 This introduced and debated House Bill 1438 is an important component of the law to (HB1438), The Cannabis Regulation and highlight because it identifies the Tax Act. Once passed, this law legalized administrative vehicles through which the adult use of cannabis in the State of Illinois. State will ensure that recreational cannabis During the bill’s debate of the House floor, tax revenue will be invested in target Representative Jehan Gordon-Booth, one of communities. Additionally, this provision is the bill’s sponsors, described the process the clearest description of which through which the legislation was communities are the aim of the Social developed. He explained to the House that the discussion around legalizing 1 “Illinois House Debates HB`438.” Facebook Watch, 2019, www.chicagobusiness.com/crains-forum-Cannabis/no-easy- www.facebook.com/Fox32Chicago/videos/illinois-house- path-sharing-marijuana-wealth. debates-recreational-marijuana-Bill/439884216574491/. 4 Benson, Thor. “Inside Illinois' New Marijuana Legalization 2 “New Illinois Legalization Bill Means Unprecedented Social Bill.” Rolling Stone, Rolling Stone, 25 June 2019, and Criminal Justice Reform.” MPP, Marijuana Policy www.rollingstone.com/culture/culture-features/marijuana- Project, 2019, www.mpp.org/States/illinois/new-illinois- illinois-legalization-Bill-852088/. legalization-Bill-means-unprecedented-social-and-criminal- 5 Illinois General Assembly, 2019. Article 7-1 Illinois State justice-reform/. Legislature, 3 Pletz, John. “The Stakes Are High for Illinois Cannabis.” www.ilga.gov/legislation/101/HB/PDF/10100HB1438lv.pdf. Crain's Chicago Business, Crain's Forum, 25 Nov. 2019, 1 Equity clause and the State justification for effectiveness of HB1438. If the law is targeting these communities. executed in the way that it is written and intended, it may result in measurable The year prior to the passage of HB1438 change in economic and social outcomes marked the 50th anniversary of the for systematically disenfranchised introduction of Social Equity as a Public communities, which will inform legislative Administration framework. In its 50th year, design of Social Equity bills in the future. the framework was the subject of considerable analysis at the Minnowbrook This paper will proceed by providing a at 50 Conference. This conference has comprehensive review of HB1438, followed taken place every ten years since the first by an overview of Social Equity as a Public Minnowbrook Conference in 1968, in which Policy and Administration tool. The paper the modern Social Equity framework was will conclude by analyzing the law within the created.6 Recent discussions of Social context of traditional Social Equity Equity signal that Social Equity as frameworks and highlight elements of articulated in HB1438 is incongruent with HB1438 of particular interest to the author. Social Equity as understood in the Public Policy and Administration field. Yet, the OVERVIEW OF THE BILL Social Equity clause in HB1438 is the subject of much praise and adulation by HB1438 is 610 pages in total. As described public policy and administration during the debate on HB1438, the bill seeks professionals. For example, the Brookings to design a recreational cannabis market by Institute recently published a report calling setting out a highly controlled supply chain on the creation of a Cannabis Opportunity that includes substantive provisions around Agenda and urging “Federal policymakers monitoring the total cannabis in the market [to] look to the model employed in the State and requiring dispensaries to account for all of Illinois.”7 cannabis that is purchased and sold. The legislative design of HB1438 and its Social Equity program compels a contextual Licenses review of Social Equity to understand the In total, the law creates six different types of ways in which the law was created in cannabis businesses that are permitted to response to a changing society. This touch cannabis in the regulated market review will illuminate the ways in which the through licensures. These businesses bill represents an evolution in Social Equity include:8 legislation. Failure to explore the larger societal context of HB1438 undermines the (1) Cultivation Center License: a license importance of HB1438 in advancing issued by the Department of frameworks of equity in society and restricts Agriculture that permits a person to the opportunity to conduct substantive act as a cultivation center; monitoring and analysis of the effect of (2) Craft Grower License: a facility HB1438 on creating equitable outcomes. operated by an organization or Only through such monitoring and analysis business that is licensed to cultivate, can the field of Public Policy and dry, cure, and package cannabis Administration draw conclusions about the and perform other necessary 6 Carboni, Julia, and Tina Nabatchi. “Minnowbrook at 50: A https://www.brookings.edu/policy2020/bigideas/it-is-time-for- Prelude.” Perspectives on Public Management and a-Cannabis-opportunity-agenda/. Governance, 2019, 235–37. 8 Illinois General Assembly, State of Illinois, 2019. Section 1- https://doi.org/10.1093/ppmgov/gvz019. 10 Illinois State Legislature, 7 Henry-Nickie, Makada, and John Hudak. “It Is Time for a www.ilga.gov/legislation/101/HB/PDF/10100HB1438lv.pdf. Cannabis Opportunity Agenda.” Brookings. Brookings, March 23, 2020. 2 activities to make cannabis available example, the Department of Agriculture is for sale; charged with administering Adult Use (3) Processing Organization License: a Cultivation Center Licenses for facility operated by an organization organizations interested in growing or business that is licensed by the cannabis. The law also calls for extensive Department of Agriculture to either data collection through its Monitor and extract constituent chemicals or Reporting requirements. Fourteen out of compounds to produce cannabis fifteen entities with additional administrative concentrate or incorporate cannabis responsibilities listed in HB1438 have at or cannabis concentrate
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