On June 17, 1971, President Richard Nixon launched the War on Drugs, a policy initiative that has destroyed and continues to destroy millions of lives. Polling from the ACLU shows that 65 percent of voters support ending the war on drugs.
Cannabis attempted to become a model for addressing the harms of the U.S. drug war, implementing social equity programs that provide business licensing opportunities for those disproportionately affected by prohibition. These programs, in theory, were a form of reparations intended to create pathways to generational wealth for impacted individuals. In Judaism, we call this teshuva — institutionsmaking meaningful reparations for past harms. Rabbi Ruttenberg has an excellent book on this topic: On Repentance and Repair: Making Amends in an Unapologetic World.
Exploited Social Equity Programs
Those within the cannabis industry know that these well-intentioned initiatives are often manipulated by investors who leveraged social equity guidelines to gain market access while squeezing out the very applicants the programs were meant to benefit. Social equity applicants who resisted exploitative investment terms frequently struggled to secure funding, leaving them without viable paths to success. We see these in Illinois, New Jersey and the famously struggling CAURD program in New York.
Compounding this issue, many cannabis lawyers aligned themselves with multi-state operators (MSOs), using their skills to draft exploitative operating agreements to “pass” the state regulations while exploiting the social equity applicant, rather than advocating for them, further reinforcing an industry dynamic that prioritized profit over justice. While these social equity programs have largely failed due to investor greed and a lack of legal enforcement, the fundamental spirit behind them remains relevant. They highlight the potential for reparative business models—if implemented with robust protections and oversight.
The business community at large can learn from these missteps, using them as a foundation for broader conversations on ethical investment, equitable resource distribution and corporate responsibility. To create meaningful economic justice, future initiatives must ensure that wealth redistribution efforts are not merely symbolic but actually empower marginalized communities. The philosophy behind social equity licensing in the cannabis industry presents a framework that state governments, regulatory bodies and businesses alike can adopt.
Where To Go From Here
While the cannabis industry’s attempts at social equity programs have had massive failures, the underlying principles remain valuable. According to Whitney Economics, only 27 percent of dispensaries are profitable in large part due to tax law 280E, so perhaps it was always going to be more difficult to convince investors to get behind social equity applicants in the cannabis industry. However, we can take these values and apply them to more profitable businesses. By acknowledging historical harm and creating pathways for economic inclusion, we can use these programs to rectify injustices and redistribute opportunities.
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State governments should incorporate social equity principles into broader regulatory frameworks, ensuring that new and emerging industries prioritize people with nonviolent drug convictions.
State governments can use this framework to launch funding programs for any type of business, providing grants to people with prior nonviolent drug convictions. In fact, I believe they have a moral obligation to do so, as people with drug convictions face significant barriers to employment. Do we really think someone who took mushrooms in college and got caught deserves to spend their life in poverty? Should their children be prevented from a balanced diet and high-quality education because of a decades-old conviction?
By directing financial resources toward those who have been systematically excluded from economic opportunities, state governments can create a more just and equitable society while addressing the long-term consequences of the war on drugs. Similar models could be used to lower barriers to entry, provide access to capital and support small business development. An argument can be made that those with few job opportunities are much more likely to succeed in opening a small business; there are often no alternatives. Likewise, regulatory bodies can use these guidelines to establish fairer policies that encourage ethical investment and prevent the exploitative business practices we’ve seen with social equity cannabis licenses.
How Businesses Get Involved
It is time for corporations to rethink their stance on hiring individuals with prior drug convictions. The war on drugs disproportionately criminalized marginalized communities, leaving millions of people with records that hinder their ability to secure stable employment. Denying them job opportunities perpetuates cycles of poverty and exclusion, rather than recognizing their potential contributions to the workforce. With evolving attitudes toward drug policy, particularly the legalization and normalization of cannabis, businesses must acknowledge that past drug convictions do not equate to an inability to succeed professionally. By actively hiring individuals with prior convictions, corporations can take a meaningful step toward economic justice, ensuring that those who were once punished for minor drug offenses have a chance to rebuild their lives. This shift is not just a moral obligation—it is an opportunity to tap into a diverse, skilled, and motivated workforce that has long been sidelined.
Final Thoughts
The cannabis industry’s experience provides a valuable lesson: good intentions are not enough. For social equity licensing to succeed in any industry, there must be enforceable mechanisms to prevent exploitation and ensure that benefits reach those who need them most. If adopted and improved upon, these principles can serve as a blueprint for building a more just and inclusive economy.
As younger generations demand more ethical business practices, we should build businesses that align with their values and create lasting social impact. By applying these principles beyond cannabis, industries with significant financial influence can contribute to closing economic disparities and fostering true equity.
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