EVANSTON IS USING ‘R’ WORD
On Jan. 1, Illinois became the 11th American state to legalize recreational marijuana, a concept that has generated millions, and even billions, for state and municipal governments. What’s different about Illinois’ program, that instead of using the money to benefit schools, veterans or some broader community interest, Illinois cities are channeling some of the anticipated revenue into programs to help African Americans.
While Chicago isn’t calling their program reparations, Evanston, ILL, located just 12 miles north of down Chicago, has clearly labeled their program “reparations.”
In November, the Evanston City Council established a reparations fund and in December voted 8-to-1 to use the first $10 million in revenue from a new tax on the sale of recreational marijuana to fund a the reparations fund. All revenue collected in 2020 from the city’s 3% sales tax on cannabis will be transferred to the new fund.
City staff estimated Evanston will collect at least $500,000 a year from the tax, which can start being applied in July 2020, according to interim City Manager Erika Storlie.
The reparations fund is aimed at addressing the wealth gap and population decline among the city’s Black residents. Aldermen have yet to determine specifically how the money will be spent, but the vote appears to have made Evanston the first municipal government in the nation to create and fund its own reparations program. Its backers hope it can become a model for other communities.
Ald. Robin Rue Simmons, whose historically Black 5th Ward includes the city’s least wealthy census tracts, had been advocating for the city to create a reparations fund throughout the year, starting with a recommendation in February and continuing with her leadership of a “Solutions Only” subcommittee of the Equity and Empowerment Commission, collecting feedback and refining ideas from more than 100 residents.
She noted the city council had passed a couple dozen resolutions in the name of equity, inclusion and Black history since she joined the council, but it was time to make the leap toward the kind of concrete repair first discussed 150 years ago with the “40 acres and a mule” land redistribution proposal.
Segregation, racist home ownership policies and racially biased law enforcement practices in the name of the “War on Drugs” have all contributed to the stark differences in opportunity between Black and White residents in Evanston, said Rue Simmons. Evanston has a $45,000 wealth gap between the average Black and White Evanston family and a 13-year gap in average life expectancy. Since 2000, Evanston’s Black population has declined by nearly 4,000, falling as a proportion of the city from 22.5% of the population to under 17% in 2017, according to U.S. Census data.
ILLINOIS RECREATIONAL MARIJUANA PLAN IS BIG ON SOCIAL EQUITY PROVISIONS
When Illinois lawmakers crafted the law legalizing marijuana in Illinois, they didn’t call it reparations, but they tried to make sure it would right what many see as past wrongs linked to the drug.
In addition to expunging hundreds of thousands of criminal records for marijuana arrests and convictions, the law’s architects added provisions meant to benefit communities that have been the most adversely affected by law enforcement’s efforts to combat the drug.
The so-called social equity provisions are expected to help Black applicants, in particular, since Blacks were nearly four times as likely as Whites to be arrested for marijuana, the American Civil Liberties Union found. The law, which took effect Jan. 1, also established ways for qualified applicants to pay lower licensing fees and get business loans and technical assistance. And it earmarked part of marijuana sales revenue for neighborhood development grants.
“On the surface, its tone and what it’s trying to do is ahead of any state that’s done this. They’re really setting off in the right way,” said Kayvan Khalatbari, a board member of Minority Cannabis Business Association, which has composed model laws outlining social equity programs. He added that follow-through will be key: “We can’t just set this in motion and set it free.”
Companies that apply for a license to sell marijuana will be judged on a 250-point scale, and those that qualify as “social equity applicants” will get a 50-point bump.
There are three ways to qualify. First, the organization applying must be majority-owned by a person who has lived at least five of the past 10 years in an impoverished area where there have been higher-than-average numbers of marijuana arrests. Second, the majority owner or an immediate family member must have an arrest or conviction of a marijuana offense eligible for expungement. Finally, for a company with at least 10 employees, more than half must qualify in one of the first two ways.
While not specifically called reparations, the Chicago City Council established a Cannabis Business Development fund designed to assist individuals and communities that were most impacted by marijuana prohibition.
To help expedite the sale of recreational marijuana, Illinois issued their initial recreational dispensing licenses to organizations that were already authorized to sell medical marijuana. Since they were given the advantage of early approval, the dispensaries were required to contribute 3% of their annual sales or $100,000, whichever is less, to the Cannabis Business Development Fund (CBDF).
The dispensaries could choose from four options for contributing to the fund:
•Contribute the money directly to the CBDF;
• Contribute the money to a cannabis industry training or education program at an Illinois community College;
•Donate the money to a program that provides job training services to persons recently incarcerated or that operates in a Disproportionately Impacted Area;
• Participate as a host in a cannabis business establishment incubator program approved by the Department of Commerce and Economic Opportunity, in which the dispensing organization agrees to provide a loan of at least $100,000 and mentorship to incubate a licensee that qualifies as a Social Equity Applicant for at least a year; or
• Participate in a sponsorship program for at least 2 years approved by the Department of Commerce and Economic Opportunity in which the dispensing organization agrees to provide an interest-free loan of at least $200,000 to a Social Equity Applicant.
Other states that legalized pot established equity programs, with varying degrees of results. Massachusetts has one, but all but two of its 184 licenses to sell pot were issued to white operators. California created a $10 million fund to go toward helping social equity applicants finance marijuana startups, but critics derided the amount as paltry.
The legalization ballot question that Michigan voters approved last fall requires the state to “positively impact” damage done by anti-marijuana law enforcement, but such vague parameters leave a lot to bureaucratic interpretation, though officials announced in July that dispensary-operator licenses would cost up to 60% less for qualified equity applicants.