Connecticut deserves credit for making social equity the cornerstone of the legal adult cannabis industry in the state. Other states that legalized before Connecticut had language in their laws that recognized how previous cannabis laws had disproportionately and negatively impacted low-income communities of color more than income-white communities. higher. Connecticut has learned that if you want to compensate these communities, there must be specific regulations to address these past wrongs by creating real opportunity for these disproportionately affected parts of our community.

Connecticut’s cannabis law creates “social equity” licensees. These are Connecticut residents who now live in low-income census tracts or who lived in those census tracts in their youth. Social Equity Licensees must also have a household income less than three times the median household income in the state to be eligible.

Last week, the state closed the first round of license applications for lucrative retail licenses. More than 15,000 license applications have been submitted. Among these candidates, 12 will be provisionally selected. Six of them will be social equity licensees and six will be non-social equity licensees. We know that the state has allowed contractors to submit multiple applications. Like all lotteries, the more tickets you buy, the more chances you have of winning. We will soon see who will win this lottery.

Although this is a lottery where every ticket has an equal chance of being selected, I suspect the laws of probability will prevail and applicants who have submitted and paid for multiple applications will be well represented among the winners.

For the 15,000 losers, they will have another chance in the next round of retail licensing to be determined in the future. But whether or not these losers win in the next round, we have to ask ourselves the following question: does turning a handful of entrepreneurs into millionaires mean social equity, since some of these millionaires once lived in low-income census tracts? revenue ?

Winners don’t have to be black or brown. Winners don’t have to reside in these low-income census tracts today. Winners do not have to have been arrested for cannabis in the past. There is clearly a disconnect between what we call social equity and real social equity that would put money directly into the pocketbooks of people who have suffered under the illegal cannabis regime.

I think it is not too early to consider a different approach for the next round of lotteries to address real social equity. When the Alliance for Cannabis Equity completed the Cannabis Equity Manifesto, we focused our attention on the existing law as if no major changes were contemplated or politically possible. I think this was a mistake.

I’m not speaking for ACE, but my proposed change would be for large cities in Connecticut with significant minority populations, Bridgeport, Hartford, New Haven, Waterbury, New London, maybe others, should be allowed to have stores city-owned cannabis retail store. As an economist, I understand that private companies are often more successful in meeting customer needs than public companies. But the issues of inefficiency, lack of innovation and quite frankly public corruption are design issues. It is possible to manage public enterprises effectively.

If cities and their taxpayers could own cannabis retail establishments operating in their cities, and they could be run like utilities, there is a chance that this industry could produce the social equity we claim to want. If cities owned their cities’ retailers, they could control all revenue, not the meager 3% of revenue with their hats in their hands. The point is, we don’t need private companies to control the retail sale of cannabis.

There are examples of this in related industries. If you want to buy “spirits” in Montgomery County, Maryland, or several counties in North Carolina, or all of New Hampshire, you go to the county or state liquor store. I’ve been to these stores, and they sell the same products you can buy at private liquor stores in Connecticut.

The irony of towns selling cannabis to residents who have been arrested by police in those towns for doing the same thing does not escape me. Yet, it can be argued that this is a superior means of distributing the economic benefits of cannabis, which is simply not possible by licensing a handful of lucky lottery winners who happen to be social equity seekers.

Criticism of city-owned cannabis stores is the unease of some to see their cities directly involved in the cannabis trade. But that’s an argument that makes less sense in the age of cannabis legalization. Once cannabis has been legalized, government at all levels is in this business like every other business in the economy once taxes are involved. Cities should therefore seek to maximize their financial interests while ensuring that the revenues generated are distributed in a manner compatible with social equity.

City-owned cannabis retailers could buy from privately licensed cannabis manufacturers, work with privately licensed delivery services, and have products shipped by privately licensed cannabis truckers. Everything the state does could stay the same. This could include privately licensed cannabis retailers outside major cities. Let these private companies compete with city-owned cannabis retailers. This competition from the private sector would force city-owned cannabis retailers to be efficient. And given the financial situation of most of our major urban centers, every effort should be made to create and capture revenue and wealth for our cities. Cities must demand this change for the benefit of all its citizens and to promote true social equity.

Fred McKinney is the co-founder of BJM Solutions, an economic consulting firm that has conducted public and private research since 1999, and is the director emeritus of the Peoples Center for Innovation and Entrepreneurship at Quinnipiac University.