In the last decade, environmental, social and governance (ESG) concerns have progressively come to the forefront of commerce. The cannabis industry is in a unique position to have a three-tiered impact on the environment, governance, and society. Sustainable cultivation practices, business opportunities for underrepresented individuals, and operating under a regulatory framework focused on consumer safety and mutual economic benefit are just a few attractive aspects of the space.
Across the country, various states have utilized the legalization and expansion of the in-state cannabis industry to support reform and legislation affecting minority groups, facilitating positive social and economic change. New York’s three-pronged approach to equity is just one example.
Automatic engagement
Automatic expungement of related convictions, equal access to economic opportunity through licensing quotas, and committing to reinvesting tax revenue in communities disproportionately impacted by the war on drugs are the three pillars of this plan.
States like Illinois, New Jersey and California are taking similar approaches. A central hurdle for the realization of these initiatives is access to capital. While prohibition exists at the federal level and cannabis remains a Schedule 1 controlled substance, small businesses will be at a strong disadvantage because they do not have access to affordable banking arrangements.
Only the largest multi-state operator (MSO) can afford these services. Congress could establish clear protections for banks to provide services to cannabis businesses as well as remove cannabis from Schedule 1 of the Controlled Substances Act. Until these smaller businesses have institutionalized access to capital, the full extent of these various equity programs will not be realized.
Profits, plant, people
Non-state actors have also shown commitment to ensuring that the budding cannabis industry is equitable with non-discriminatory barriers to entry and paths to success. One of these entities is Power REIT (NYSEAMERICAN:PW), a specialized real estate investment trust (REIT) that owns sustainable real estate related to infrastructure assets including properties for controlled environment agriculture (CEA), renewable energy and transportation. Regarding CEA, Power REIT is looking to expand its portfolio through the acquisition of property for the cultivation of food and cannabis.
It is focused on the “triple bottom line” with a commitment to profit, planet, and people. In the last year, Power REIT acquired greenhouse property for cannabis cultivation entering long-term leases with The Apotheke, a minority woman-owned business and Cloud Nine Farms, a minority-owned business.
Viviana Fernandez (Apotheke) and Joel Perez (Cloud Nine) both expressed how excited they were to enter business with Power REIT saying: “We are confident that they will provide a long-term real estate solution that will serve our expansion needs…with a unique opportunity to dramatically scale our business through a prudent accelerated growth plan.”
Viola leading the way
Businesses themselves are also contributing to social equity. Viola, founded by NBA veteran Al Harrington, is a nationwide leader in the production and sale of high-quality cannabis products. Its social equity initiative, Viola Cares, will create more than 10,000 jobs, hundreds of new business owners and has expanded industry diversity through education, equitable offerings, expungement, and incubation programs.
As more states legalize medical marijuana use, and the supporting industry and infrastructure expand, it is critical that states, entities like Power REIT, and cannabis businesses take advantage of the opportunity to create an equitable and sustainable ecosystem for this US$61bn industry to grow and develop.
This is company-generated contented written by Ben Rosen, analyst at Power REIT