Perspectives on marijuana use have shifted since the days of overt anti-cannabis rhetoric in the media. A prime example is the special episode of nineties classic Saved by the Bell designed to curb its young audience from marijuana use, catchily titled “No Hope with Dope.” The mindset of many Americans concerning recreational marijuana has become far more supportive of legalization of the drug; 2018 Joint Economic Committee Democrats cite 66% of Americans in support of legalizing cannabis. This support is garnered not only from those interested in consuming the drug itself, but also from voters interested in the economic opportunities legalization can provide for their local communities. The cannabis industry is projected to reach $23 billion in revenue by 2022 and employ 120,000 workers in 2018—two enticing numbers pointing in favor of legalization. At the local level, residents of states such as Colorado benefited from $100 million in state tax revenue generated by cannabis sales in the first year of legalization, with voters opting to build schools and launch a variety of youth programs. Still, there is fervent debate over the manner in which legalization ought to occur and whether or not legalizing the drug as soon as possible is the best approach. Around 81% of cannabis executives in states such as Colorado and Washington are white, with statewide legalization seeming to have benefitted a largely white pool of entrepreneurs and investors, causing concern against immediate legalization’s impact on compounding the racial wealth gap. 

Taking a closer look at the cannabis industry in specific states sheds light on just how evident racial wealth disparity is in the field. Colorado legalized recreational marijuana with a voting measure in 2012 and dispensaries began to open at the beginning of 2014. While the state earned upwards of $500 million in tax revenue in the first four years post-legalization, the marijuana arrest rate for black people was still three times that of whites in 2014. Even more concerning is the nationwide figure that only about 1% of marijuana dispensary owners are black. Groups that have been historically and are currently disproportionately arrested and convicted for marijuana related crimes are not reaping the economic benefits of cannabis legalization. In states such as Colorado (although some districts in Colorado have been successful in overturning such laws) and Massachusetts, drug offenders are barred from entering the marijuana industry, posing more issues for the racial wealth gap in the industry considering that those with marijuana-related convictions are disproportionately black and Latino. Thus, these groups are cyclically shut out from the legal cannabis industry while mostly white males profit. 

The entire image of cannabis is shifting as a result of legalization, with many highlighting the heavy gentrification of the industry. Marijuana legalization, considered an undesirable social movement by many until quite recently, is being repackaged through the means of legalization to fit a more mainstream and ‘desirable’ aesthetic. Legalization itself was often marketed in states that pioneered legalization such as Colorado, Washington, and Oregon under the guise that hardworking, white middle-class, consumers were deserving beneficiaries of legalized marijuana. Minority groups that were previously associated with and criminalized for marijuana and its illicit use are being shut out of the industry that they were stigmatized for being a part of in the first place. Marijuana dispensaries in Colorado demonstrate upper-middle class white models in their advertisements more often than not—87% of models in advertisements were identified as white. These messages thus reinforce the message that white affluent individuals “pioneered” the foundations for the legal cannabis industry to become available for corporate mainstream investment, completely disregarding that individuals of minority groups simultaneously continue to serve sentences for marijuana possession. 

In noting how legalization has had a gentrifying impact on the image of cannabis itself, it’s also important to consider overall gentrification of areas that were some of the first to legalize marijuana. Looking at Denver, an already rapidly gentrifying area hit hard with an influx of business post-legalization, some of the negative effects of legalization on the local economy are evident. Denver’s “Green Rush” has resulted in higher commercial real estate prices (prices used to be about $50 per foot but have skyrocketed to $300 after legalization) due to the increase in marijuana entrepreneurs searching for large, urban places to grow. This massive increase in commercial real estate prices has heavily impacted low-income Denver residents, as warehouse space was previously used by artists, cooperatives, food banks, and other small nonprofits. Though many Denver residents do not believe cannabis was a primary cause of gentrification across the city, they do cite weed as being a factor in fostering the rapid gentrification mayhem. 

States such as California have attempted to address the racial wealth disparities stemming from legalization since marijuana was legalized in the state in 2016. California does not review prior felony convictions when an individual applies for a cannabis license, which has allowed for infrastructure such as Oakland’s cannabis equity program to take root. This program specifically aims to “correct past disparities in the cannabis industry by prioritizing victims of the war on drugs and minimizing barriers of entry into the industry.” This mindful approach to the cannabis industry has been noted by a group of House Democrats, noting that in the push for legalization at the federal level, it is imperative to expunge convictions for use or possession

Legalizing marijuana, whether it be at various state levels or at the federal level, brings both positive and negative externalities. The economic benefits of generating large swaths of revenue and providing a solid amount of jobs come into conflict with legalization emphasizing (and likely worsening) the racial wealth gap and rapidizing the gentrification of lower-income neighborhoods in large cities. With cannabis initiatives on five states’ ballots this November, it’s crucial to examine the path future legalization will take. If legalization is to occur in more states or at the federal level, it is vital to consider the impact on communities of color that are disproportionately convicted for marijuana-related charges, looking towards solutions such as Oakland’s cannabis equity programs. The rapid push towards the legalization of marijuana should not come at the expense of widening an already worsening racial wealth gap; the path towards creating a more ethical legal cannabis industry must actively encompass minority groups rather than shutting them out.

Featured Image Source: The Chicago Tribune

Disclaimer: The views published in this journal are those of the individual authors or speakers and do not necessarily reflect the position or policy of Berkeley Economic Review staff, the Undergraduate Economics Association, the UC Berkeley Economics Department and faculty, or the University of California, Berkeley in general.

Share this article:

Leave a Reply

Your email address will not be published. Required fields are marked *