President Joe Biden’s announcement about cannabis policy reform last week underscored how keeping it illegal disproportionately harms people of color. “Too many lives have been upended because of our failed approach to marijuana,” he said. “It’s time that we right these wrongs.”
Biden is pardoning those convicted of simple cannabis possession under federal or Washington, D.C., laws. It’s unclear how many people this will affect, but the figure is certainly in the thousands. He also urged states, where the vast majority of convictions for possession take place, to follow suit, which could have a significant impact. Rand Corp. research found that in Virginia alone, automatically expunging criminal records for adult cannabis possession offenses could affect more than 200,000 individuals, about half of them people of color.
If the goal is to build wealth or invest tax revenue in communities of color, policymakers need to pay close attention to prices.
Biden’s move is an important step in changing the federal approach to cannabis. But governments need to be actively thinking of other ways to right the racial wrongs stemming from decades of prohibition. One approach is to use legalization as a vehicle to help build wealth in communities of color.
Some jurisdictions are considering how cannabis tax revenues could be used to address racial disparities. For example, Evanston, Illinois., is using some of its cannabis tax revenues to support slavery reparations.
Other places are giving preferences for cannabis-related business licenses to groups who have been disproportionately harmed by prohibition.
But if the goal is to build wealth or invest tax revenue in communities of color, policymakers need to pay close attention to prices.
Legalization dramatically reduces the cost of producing cannabis for several reasons. First, when someone buys cannabis, cocaine or heroin in the illegal market, part of the cost is to compensate the drug dealer (and everyone else along the supply chain) for the risk of arrest and incarceration. With legalization, that risk disappears. Second, if large growers are allowed to enter the market, they can produce cannabis more efficiently than smaller businesses. Finally, it is easier for legal businesses to take advantage of changes in technology that increase yields or help with packaging.
All of that doesn’t necessarily mean retail prices must drop, but that is how it’s playing out because states allow…
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