Discrimination in Maryland's broader business climate would justify giving minority and women-owned businesses preferences for entering the state-regulated medical marijuana market, according to a report released Wednesday.
The long-awaited report, ordered by Gov. Larry Hogan (R), gives lawmakers the justification they need to pass legislation to help more minorities break into the industry.
Pending legislation would set aside five new marijuana cultivation licenses for minority-owned businesses and put a pause on any other new licenses for as long as a decade.
None of the 14 companies licensed to grow cannabis for medical purposes in Maryland's are led by black executives. That enraged lawmakers who said it was unfair that African Americans were disproportionately locked up on marijuana charges, compared to the overall populations, but were getting fewer opportunities to profit from the legal industry.
While the 2014 law legalizing medical marijuana called for regulators to seek diversity in licensing growers, the Maryland Medical Marijuana Commission did not consider race or ethnicity after receiving legal advice that said it would be illegal to do so without evidence of disparities.
After a political brawl ensued, and lawmakers failed last year to reach a compromise on overhauling the medical marijuana industry, Hogan ordered a disparity study.
The consultant, economist Jon Wainwright, didn't specifically examine Maryland's medical marijuana companies or the application process. Instead, he examined whether an earlier study finding widespread disparities in business opportunities for minorities in Maryland could be applicable to the medical marijuana industry.
He concluded that it was.
"Absent such affirmative remedial efforts by the State, I would expect to see evidence in the relevant markets in which the medical cannabis licensees will operate that is consistent with the continued presence of business discrimination," Wainwright wrote.
But he cautioned that he is not a lawyer and could not say which race-conscious measures to expand the medical marijuana market are legal.
Medical marijuana went on sale in December at a limited number of dispensaries after years of delays. Supply is low and prices are high while most growers are still working to get their product ready for market.