Done right, cannabis legalization can transform Maryland’s poorest neighborhoods | GUEST COMMENTARY

Legalization of recreational cannabis in Maryland is a done deal. The referendum scheduled on the issue this November will pass. After it does, the real fight starts. The state legislature will have until April 10, 2023, to decide how to regulate the industry. There will be critical debates on taxes and criminal background checks. But the least understood and most important issue will be how Annapolis determines which companies get licenses to grow, process and dispense the product, which in turn will determine who profits from legalization.

Legislators should implement a place-based licensing system, ensuring that cannabis businesses are exclusively owned by residents of — and located in — the state’s 25 poorest ZIP codes. This policy can be one of the most transformative our state has seen in decades.

In Washington state, which has a population only 25% larger than Maryland’s, the cannabis industry has become an unimaginable source of wealth. The industry generates over $2.7 billion in income each year and $876 million in taxes, and it employs 18360people. Maryland should expect similar figures. If this massive industry is concentrated in the state’s poorest neighborhoods, it will generate enough economic growth to rejuvenate these communities.

That’s why indoor growing and processing operations should be awarded to and located in the 15 poorest urban ZIP codes, while outdoor and greenhouse operations should be awarded to and located in the 10 poorest rural ZIP codes. To prevent poor communities from being flooded with marijuana and to ensure that the profits from the industry flow into, rather than out of, these communities, retail dispensaries should be located throughout the state, but they should also be owned by long term residents of these 25 ZIP codes. To further the economic effect, taxes paid by all these businesses should stay in their communities, ideally being directed to funding the Kirwan Commission’s recommendations on equal schools.

These policies represent a significant break from the past. The 25 targeted ZIP codes have been bleeding manufacturing jobs for decades and now account for over 50% of the state’s 560 annual homicides and 2,200 overdose deaths. Baltimore City, Prince George’s County, the Eastern Shore and Western Maryland are the most in-need parts of our state. Giving them ownership of this multibillion-dollar industry will create a new generation of businesses and business owners that anchor these communities. As employees and owners of this new industry, people who might otherwise have left town or grinded out lives managing operations at food chains or chicken plants, will finally create generational wealth for their families, purchase their homes, leverage their success to start more companies and become leaders of their hometowns.

Of course, new businesses come with inevitable challenges, and some will fail. While keeping ownership and business location restricted, Maryland must eliminate all unnecessary barriers to entry and regulations in order to ensure that, like in California, people don’t need to take on enormous financial risk, but can instead start small, with as little as $10,000, and grow their operations organically. In Maryland’s medical marijuana system, established in 2014, some of the biggest cost drivers were a lengthy application process, FBI background checks, stringent limits on the number of licenses, minimum size requirements for operations, and, most importantly, unnecessary zoning restrictions. These burdens should be eliminated, while more effective and inexpensive safety precautions such as seed to sale tracking, contamination testing and mandatory 24/7 video recording of all facilities should be rigorously implemented. To further ensure that a large number of small businesses have the best chance of success, there should be a maximum size limit to prevent monopolization and the state should set aside funds for a startup accelerator to prepare would-be entrepreneurs on the fundamentals of growing, processing and managing a company.

When legislators decide the rules for recreational cannabis next spring, they will face immense pressure from those who already have licenses in Maryland’s medical system and multistate cannabis conglomerates. As residents, we must ensure that legislators resist this pressure. The new rules should take a radically new, place-based approach to licensing. It’s time Maryland mends the devastation wreaked on black and Latino families by the criminalization of cannabis. It’s time we replace the lost jobs in our deindustrialized and struggling rural regions. It’s time we give our most vulnerable a genuine opportunity to build their own companies and lift themselves and their communities out of poverty.

Amar Mukunda (amar_mukunda@rocainc.com) is a native Marylander and a former cannabis entrepreneur who built successful cannabis ventures in Washington, California and Maryland. Mr. Mukunda also serves as assistant director of Roca Baltimore, a gun violence prevention program focused on helping Baltimore’s highest risk young men and is launching the nonprofit Baltimore Generational Wealth initiative to promote home and business ownership in the city’s poorest neighborhoods.