Cannabis Social Equity Initiatives Across 5 US States Case Studies of Colorado, Washington, Massachusetts, Connecticut, and Missouri

Abstract

Context:

Given the historic cannabis-related injustices in the US, several states that have legalized nonmedical cannabis also launched social equity (SE) initiatives involving criminal justice reform, equitable entrepreneurship assistance, and community reinvestment programs.

Objective:

This manuscript explores SE initiatives across 5 states.

Design:

Case studies of 5 states were conducted using a drug policy framework. Two researchers dual-coded cannabis-related SE policies pertaining to expungements/pardons, equitable entrepreneurship assistance, and revenue allocation (as of December 2024).

Setting:

Colorado, Washington, Massachusetts, Connecticut, and Missouri.

Results:

Colorado, Washington, and Massachusetts implemented pardons for certain offenses; Connecticut and Missouri implemented expungement. There was variability in the eligible offenses and numbers of pardons and expungements granted across states. Regarding entrepreneurship assistance, the states’ SE eligibility criteria were similar, albeit with some distinctions (eg, income restrictions, veterans). Each state either reserved licenses for SE applicants or had specific SE licenses. The states offered similar trainings but used distinct approaches (such as accelerator programs or role-specific tracks). Additionally, financial benefits, such as grants, loans, and fee waivers, differed across states. Each state implemented cannabis sales taxes, which varied in level and type (retail sales tax vs. excise tax). Revenues across states were directed to cannabis program costs, the general fund, and health care and educational initiatives and organizations, although there were differences in allocation across states.

Conclusions:

Findings highlight the important efforts these states have made toward SE goals. However, given the varied approaches and limited evidence base, ongoing evaluation across states is needed to inform effective future SE initiatives.

Between 2012 and March 2025, nonmedical (“recreational”) cannabis has been legalized in 24 US states, with most also establishing cannabis retail.¹ Historically, criminal justice policies in the US targeted cannabis possession through harsh enforcement practices contributing to high incarceration rates, economic hardship, and social inequities among racial/ethnic minority and low-income populations.^2,3 As states have legalized nonmedical cannabis, addressing cannabis-related convictions has been key to rectifying these inequities.^4,5 To date, each of these 24 states and DC have enacted laws providing explicit pathways to either expunge, pardon, seal, or annul the records of those with low-level cannabis convictions.^6,7

Despite the importance of legalization, decriminalization, and addressing prior cannabis convictions, inequities caused by prior cannabis-related criminalization have had lasting impacts, underscoring the need for additional efforts to promote social equity (SE),⁸ broadly referring to justice and fairness within social policy.⁹ Such efforts address the fact that SE entrepreneurs are underrepresented at all levels of the cannabis industry¹⁰ and the need to reinvest in disproportionately-impacted communities or areas (DICAs).⁴

Most states with nonmedical cannabis have developed SE initiatives to address inequitable participation in cannabis entrepreneurship,¹⁰ which has arisen for various reasons (eg, limited business experience or financial resources^11-13). These states may establish programs to provide resources, training, financial assistance, and license preferences for individuals from DICAs.^7,14-19 One 2024 study examined these programs in 12 cities in 10 states, including their selection/allocation of retail licensure, eligibility criteria for SE entrepreneurs, and financial and training resources available to SE entrepreneurs.¹⁸ Findings suggested greater fidelity to redistributive justice goals when states issued SE and non-SE licenses at equal ratios and had multiple SE criteria, more discrete DICA and cannabis conviction criteria, and more comprehensive supports.¹⁸ These findings are important, but little information was provided about the nuances and nature of the SE initiatives in these settings, which may have important implications for SE-related outcomes.

Another important SE-focused initiative relates to how cannabis-related revenues are allocated to community reinvestment and promoting SE. At least 19 states have ensured that these revenues are allocated toward efforts to support health and education and to monitor and address any potential negative implications of substance use (eg, mental health, addiction treatment), often with a particular focus on DICAs.⁷ From a social determinant of health perspective, these types of SE-related initiatives may ultimately promote health and reduce disparities in DICAs.²⁰

The current paper aimed to advance the literature regarding various dimensions of SE initiatives, different states’ approaches, and potential lessons learned. Drug policy frameworks specific to cannabis^5,21 and cannabis SE policies^4,18,22 (described below) were used to provide case studies of cannabis-related SE efforts in 5 states—Colorado, Washington, Massachusetts, Connecticut, and Missouri. A qualitative case study approach among these 5 states with varied approaches to SE offers in-depth insights into the specific domains of SE-related initiatives in these states and may provide important context for research more succinctly quantifying the nature of these SE initiatives across a broader range of settings.

Methods

Study sites

Five states were selected to represent diversity in terms of geographical regions, the longevity of their nonmedical cannabis retail environments, and certain aspects of their SE initiatives, per a preliminary review of state SE initiatives. (A full data set of SE-related initiatives across states can be found elsewhere.²³) Colorado and Washington represent the first 2 states (in the Western and Northwestern regions) to pass nonmedical cannabis laws—both in 2012,^24,25 with markets established in 2014.^26,27 Despite their relatively mature markets, their SE programs were not established until 2019 to 2020.^28-30 Massachusetts and Connecticut represent Northeastern states that passed cannabis legislation in 2016^31,32 and 2021³³ and implemented their SE initiatives when they established their retail markets in 2018^34,35 and 2023.^36,37 Missouri is a Midwestern state with recent nonmedical cannabis legislation (in 2022³⁸) and retail (2023)³⁹ that implemented its SE initiatives alongside the establishment of its market.⁴⁰

Measures

Guided by general frameworks for drug policies, including for cannabis and alcohol,^5,21 and frameworks for cannabis SE initiatives specifically,^4,18,22 3 areas of SE policy or initiatives were defined: promoting equitable cannabis entrepreneurship opportunities, community reinvestment, and criminal justice actions. Key dimensions within each domain were further fleshed out: (1) equitable entrepreneurship opportunities—types and number of SE licenses available, selection process, eligibility criteria, and benefits including training, technical assistance (TA), and financial assistance; (2) community reinvestment—taxation (including retail sales and excise tax rates and how they were applied) and revenue allocation; and (3) criminal justice actions—when implemented, type (eg, automatic or petitioned, expungement vs. pardons), and number granted (see Table 1).^4,5,18,21,22

TABLE 1.

Overview of Domains and Variables Related to Cannabis Social Equity (SE) Related Initiatives

Domain (and Subdomain)	Variables Within Each Domain
General context	Year nonmedical legalized Year retail launched Year SE program established Regulatory agency SE-related goals SE oversight and objectives
Equitable cannabis entrepreneurship opportunities
Licenses and selection	License priority (ie, reserved licensure, preferential review) Special license types Selection: merit- or lottery-based
SE eligibility criteria	Number of criteria required; which criteria were required or among possible criteria Majority ownership Residency Income limit Prior personal or family cannabis-related convictions Resident of a DICA Other personal disadvantages Service to DICAs
Training and financial resources	Training Funding
Revenues and allocation	Tax rates (retail sales and excise) General state retail sales tax rate (as context) Revenue allocation
Criminal justice (pardons, expungement)	Year legislation passed Type (ie, pardons vs. expungement; automatic vs. petition required) Eligible offenses Number granted State population (as context)

Data collection

Then, in October to December 2024, relevant resources including state laws and state agency websites and reports were systematically reviewed, leveraging previously published methods,^41,42 to identify sources of SE-related information, as these often varied in terms of their documentation in state laws versus other official texts (eg, cannabis licensing board requirements, processes, etc.).⁴³ Based on this review, core information sources were identified for each state. To assess relevant state laws and statutes, state legislative documents were examined (per best practices for legal research^44,45). Cannabis licensing board websites and other relevant online sources (eg, SE task force or council reports) were used to identify data pertaining to SE-related activities and processes for implementing SE-related laws and initiatives as of December 2024.

Data analysis

After defining the core information sources for each state, these resources were reviewed to refine the initial coding framework. Then, 2 research team members independently dual-coded variables (alongside their data sources) and compared their data after coding the first 2 states. After addressing any discrepancies, the coding scheme was refined to reduce ambiguity as needed. Then, the remaining states were dual-coded, and the coded data were compared to ensure reliability.

Results

SE goals and leadership

Table 2 provides variables to contextualize SE-related initiatives within each state, including the years when nonmedical legislation was passed, the nonmedical market launched, and SE legislation was passed, as well as the cannabis regulatory bodies, their SE goals, and SE leadership and their roles. Notably, Colorado’s Marijuana Enforcement Division was within the Department of Revenue, Missouri’s Division of Cannabis Regulation was within the Department of Health and Senior Services, Connecticut’s oversight was within the Department of Consumer Protections, and 2 states—Washington and Massachusetts—had cannabis licensing boards or control commissions (with Washington’s board also home to liquor licensing). Also noteworthy is that SE initiatives were overseen by working groups or task forces (often including DICA members) in Colorado, Washington, Massachusetts, and Connecticut,^46-49 but overseen by the Chief Equity Officer in Missouri (as of December 2024).³⁸

TABLE 2.

Context of Cannabis Social Equity (SE) Related Initiatives in 5 US States

	Colorado	Washington	Massachusetts	Connecticut	Missouri
Year nonmedical legalized50	2012	2012	2016	2021	2022
Year retail launched50	2014	2014	2018	2023	2023
Year SE program established	202029	202051	201848	202149	202252
Regulatory agency	Marijuana Enforcement Division within the Department of Revenue	Liquor and Cannabis Board	Cannabis Control Commission	Department of Consumer Protections	Division of Cannabis Regulation within the Department of Health and Senior Services
SE-related goals	“An inclusive and equitable cannabis industry that acknowledges the effects of criminal enforcement of cannabis laws on communities of color and focuses on outreach and engagement to support diversity in the cannabis industry.”29	(1) Increase the number of cannabis retailer, producer, and processor licenses held by applicants most harmed by the War on Drugs; (2) reduce the accumulated harm suffered by individuals, families, and local areas subject to severe impacts from the historical application and enforcement of cannabis prohibition laws.51	“Provide sustainable pathways into the cannabis industry for individuals most impacted by the War on Drugs, including disproportionate arrest and incarceration due to cannabis prohibition.”48	“Promote equitable economic prosperity by supporting Social Equity Entrepreneurs and reinvesting in the communities most impacted by the war on drugs.”49	The microbusiness path is for “small businesses” and “designed to provide a path to facility ownership for individuals who might not otherwise easily access that opportunity.”52
SE oversight and objectives	SE Advisory Work Group; work with stakeholders to assess the effectiveness of the SE Program and to identify opportunities for improvement.46	SE in Cannabis Task Force; provide recommendations on SE program implementation and policies to facilitate SE in the cannabis industry.47	SE Advisory Board (consisting of individuals representing DICAs); advise on the administration of the Cannabis SE Trust Fund, which provides loans and grants to entrepreneurs from DICAs.48	SE Council; implement and oversee SE initiatives (eg, commission studies, review SE applications, advise on SE training and implementation, make recommendations to the Governor and General Assembly).49	Chief Equity Officer; lead SE-related activities.38

Abbreviations: DICAs, disproportionately-impacted communities or areas; SE, social equity.

Equitable cannabis entrepreneurship opportunities

License priority/types

As shown in Table 3, each state had distinct ways to support or allocate licensure to SE entrepreneurs. Colorado reserved some micro-business licenses for SE entrepreneurs and also provided the option for SE licensees to operate independently or participate in the accelerator program, in which they would partner with an accelerator-endorsed licensee (a regular licensee who would then provide them financial and technical support in order to certain preferential treatments from the state).⁵³ Washington’s Senate Bill 2870 (passed in 2020) authorized cannabis retailer licenses exclusively for SE applicants.²⁸ Washington’s Senate Bill 5080 (passed in 2023) amended the original bill to increase available retail licenses and extend SE opportunities to producer and processor licenses.^54-56 Massachusetts reviewed SE applications before non-SE applications and also reserved 3 special licenses (courier, delivery operator, social consumption establishment) for SE entrepreneurs.²² Connecticut reserved 50% of the maximum number of license applications in each license type for SE entrepreneurs, which were then selected through a lottery by license type.²² Missouri allocated SE licensures for wholesale facility and dispensary microbusiness licenses and used a lottery system to select SE entrepreneurs.⁵²

TABLE 3.

Overview of Initiatives to Promote Equitable Cannabis Entrepreneurship Opportunities in 5 US States

	Colorado	Washington	Massachusetts	Connecticut	Missouri
License priority	Some micro-business licenses reserved for SE applicants53	Some licenses exclusively for SE applicants28,54-56	Reviews SE applicants before noncertified applications22	50% of max number of each license type reserved for SE applicants22	SE licensures for microbusiness licenses for wholesale facilities and dispensaries52
Special licenses	2 SE licenses: accelerator (for SE licensee) and accelerator-endorsed (for regular licensee); accelerator licensees work with accelerator-endorsed licensees who provide special financial and technical support53	–	3 special licenses: courier license, delivery operator license, and social consumption establishment license22 *Reserved for SE applicants for 3 y unless extended by commission48	–	–
Selection	Merit-based53	Merit-based (using point system)57	Merit-based22	Lottery22	Lottery52
SE eligibility	aMust meet one of the 3 criteria58	bMust meet ≥2 of the 4 criteria30	cMust meet ≥1 of the 2 criteria or be a Certified Economic Empowerment Priority Applicant with ≥1 ofd criteria48	Must meet all criteria59	eMust meet ≥1 of the 5 criteria60
Majority ownership	≥51% ownership (no prior revoked cannabis business)	≥51% ownership	≥51% ownership	≥65% ownership *For SE joint venture applicants: minimum SE individual ownership is 50%59	≥51% ownership
Residency	State residency (no stated length)	State residency ≥6 mo	Implied below##	Implied below **	Not explicitly required
Income limit	aHousehold income ≤50% of state median	bHousehold income <state median	CHousehold income ≤400% of area median income	Ave household income <300% of state median over past 3 tax y	eNet worth <$250 000 and income <250% of federal poverty level ≥3 of past 10 y
Prior personal or family cannabis-related convictions	aHas been or has a parent, legal guardian, sibling, spouse, child, or minor in their guardianship arrested or convicted for cannabis offense or subject to civil asset forfeiture related to cannabis investigation	bHas been or has a family member arrested or convicted of cannabis offense	cResidency in MA ≥past 12 mo and (a) conviction or continuance without finding for offense under M.G.L. c. 94C or an equivalent conviction in other jurisdictions or (b) married to, or child of, individual with such offense ##	–	eHas been or has a parent, guardian, or spouse arrested/prosecuted/convicted of non-violent cannabis offense ≥1 y prior to 12/08/22, ie, on or before 12/08/21, unless provision of cannabis to minor; or was for DUI of cannabis
Resident of a DICA	a≥15 y between 1980-2010 Defined by census tract designated as an “Opportunity Zone” or “Disproportionate Impacted Area”	b≥5 y between 1980 and 2010	d≥5 of past 10 y##	≥5 of past 10 y or ≥9 y prior to age 18**	eDefined by zip code or census tract with: (a) ≥30% < federal poverty level; (b) unemployment rate 50% higher than state ave; and/or (c) cannabis-related offense incarceration rate 50% higher than state rate
Other personal disadvantages	–	bBoth socially and economically disadvantaged individual; subjected to racial or ethnic prejudice or cultural bias because of identity, and ability to compete in business impaired due to diminished capital and credit opportunities (per Office of Minority and Women’s Business Enterprises61)	dBlack, African American, Hispanic or Latino descent		eGraduated from a school district unaccredited at time of graduation, or lived in ZIP code with unaccredited school district for 3 of past 5 yrs eDisability card issued by US Department of Veterans Affairs
Service to DICAs	–	–	dExperience in ≥1 positions that primarily served DICAs, or involved economic education, resource provision or empowerment for DICAs dOther demonstrated experience or business practice to promote DICA economic empowerment	–	–
Training	Cannabis Business Office provides TA and access to capital through grants; TA includes webinars, training modules, personalized one-on-one consulting, and other support62	TA grant program: (1) assistance navigating licensure process; (2) cannabis-business specific education and business plan development; (3) regulatory compliance training; (4) financial management training and assistance in seeking financing; (5) strengthening an SE plan as defined in RCW 69.50.101; and (6) connecting SE applicants with established industry members and tribal cannabis enterprises and programs for mentoring and other forms of support63	Training in 4 areas: (1) entrepreneurship, (2) managerial-level workforce development, (3) entry-level workforce development, and (4) ancillary support for businesses that contract with the industry but do not hold a license48	4 programs: (1) accelerator program partners SE applicants with cannabis establishment; (2) workforce training to ensure Well-trained employee applicant pool, and help individuals in DICAs find cannabis industry employment; (3) SE joint venture program that targets existing cannabis establishments seeking hybrid licensing to partner with SE applicant; and (4) SE partnership program that targets cultivators seeking hybrid license to partner with SE applicant22	Webinars educating individuals about SE program (eligibility, process, etc.) to help aspiring entrepreneurs develop skills and knowledge to establish and operate cannabis businesses64
Funding	Loans to SE licensees for seed capital and ongoing business expenses and grants to SE licensees for innovation and job creation22,29,65	Licensees can submit an SE plan, addressing ways to promote SE, to receive 1-time reimbursement of annual license fee	Grants and loans to promote participation in the regulated cannabis industry by those from communities disproportionately harmed by cannabis prohibition and enforcement license application fees waived and reduced (50%) annual license fees for SE applicants48	Fee waivers, funding ($50 million) for start-up capital, cannabis business accelerator program, and workforce training; authorized sale of bonds up to $50 million, proceeds to be used for low-interest loans to renovate properties as cannabis establishment, capital to SE applicants to start or maintain a cannabis establishment, or to develop or sustain accelerator and workforce training programs22	Applicants must pay $1500 application fee, but can request refund if not picked in lottery

Abbreviations: DICAs, disproportionately impacted communities or areas; SE, social equity; TA, technical assistance.

^aColorado SE entrepreneurs must meet one of the 3 criteria.

^bWashington SE entrepreneurs must meet ≥2 of the 4 criteria.

^cMassachusetts SE entrepreneurs must meet ≥1 of the 2 criteria or be a Certified Economic Empowerment Priority Applicant with ≥1 of the criteria.

^dAdditional criteria for Massachusetts (as previously noted) - must meet all criteria.

^eMissouri SE entrepreneurs must meet ≥1 of the 5 criteria.

^##Cross-reference Massachusett’s state ‘residency’ criteria with criteria regarding ‘prior personal or family cannabis-related convictions’ and criteria regarding ‘resident of a DICA’.

^**Cross-reference Connecticut’s state ‘residency’ criteria with criteria regarding ‘resident of a DICA’.

SE eligibility

Table 3 provides an overview of each state’s SE eligibility criteria. All state requirements included majority ownership and consideration of residence, particularly state residence and in DICAs, albeit with variations in the definitions of DICAs and the timing and duration of required residence.^30,48,58-60 Many considered histories of cannabis-related convictions of the applicant and/or their family members. All had restrictions on income levels, although these varied widely (from <50% state median in Colorado to <400% municipality median in Massachusetts). Additionally, most considered status as a socially and economically disadvantaged individual, although these definitions varied—such as racial or ethnic minorities or those with veteran status. Massachusetts was unique in its inclusion of individuals who demonstrated a commitment to advancing SE, and Missouri was unique in its inclusion of those with a disability card issued by the US Department of Veterans Affairs. Washington was distinct in its use of a point-based system to evaluate SE applicants.⁵⁷

Training and financial resources

Each state provided some type of training and TA to SE entrepreneurs focused on educating individuals about the SE program (eligibility, process, etc.) and assisting aspiring entrepreneurs to develop the skills and knowledge necessary to establish and operate cannabis businesses, such as regulatory compliance or business plan development, via webinars, consulting, and other supports (Table 3).^58,64 Some distinct approaches were used across the states.

Similar to Colorado’s accelerator program (described above), Washington’s TA grant program offered to connect SE entrepreneurs with established licensees and tribal cannabis enterprises, as well as programs for mentoring and other forms of support,⁶³ and Connecticut’s offered 3 such partner/mentorship programs (ie, accelerator program partnering SE entrepreneurs with existing establishments, SE joint venture program incentivizing cannabis establishments seeking hybrid licensing to go into business with an SE entrepreneurs for over 7 years [50% transfer fee waiver], SE partnership program incentivizing existing cultivators seeking a hybrid license similar to the joint venture program).²² Connecticut also offered a workforce training program to ensure establishments had well-trained employee applicants and assist individuals from DICAs find industry employment.²² Massachusetts’ TA program was tailored to 4 tracks: (1) entrepreneurship for those aiming to establish cannabis businesses, (2) managerial to facilitate industry leadership roles, (3) entry-level workforce development focused on creating accessible employment opportunities, and (4) ancillary services for non-licensed businesses offering services related to cannabis operations.⁴⁸

Each state provided some financial resources (Table 3). Four states (Washington, Massachusetts, Connecticut, Missouri) explicitly stated opportunities for licensing/application fee waivers or discounts, and 3 states (Colorado, Massachusetts, Connecticut) explicitly provided loans and grants. Colorado’s Cannabis Business Office administered loans to SE licensees for seed capital and ongoing business expenses (eg, rent, application fees, workforce training/retention) and grants to SE licensees for TA, innovation, and job creation²² and divided eligible businesses into 3 categories (“funding pathways”) based on the maturity of their business (ie, foundational, foundational plus, growth).^29,65 Massachusetts’ Cannabis SE Trust Fund provided grants and loans to promote industry participation among DICAs.⁴⁸ Connecticut had a SE and Innovation fund that provided capital for businesses; furthermore, Connecticut authorized the sale of bonds up to $50 million, the proceeds from which were for capital to SE applicants to start/maintain cannabis establishments, low-interest loans to rehabilitate and renovate unused or under-used properties for cannabis establishments, and funding the accelerator and workforce training programs.²² The nature and duration of funding and other benefits were not detailed, as these aspects were often contingent on states’ annual budgets (and often based on cannabis-related revenues).

Cannabis revenue and allocation

As shown in Table 4, each state implemented taxes on cannabis sales, although states varied in the nature and level of taxation.⁶⁶ State taxes on cannabis products were 15% on wholesale average market rate and 15% on retail sales in Colorado, 6.75% retail sales tax and 37% excise taxes on retail sales in Washington, 6.25% retail sales tax and 10.75% excise taxes on retail sales in Massachusetts, and 6% excise tax on retail sales in Missouri. Counties and municipalities could impose additional taxes in certain states (Colorado, Massachusetts, Missouri). In Connecticut, a 6.35% retail sales tax was applied and additional excise taxes were based on product type (eg, $0.00625 per mg of THC in plant material, $0.0275 per mg of THC in edible products, $0.009 per mg of THC in other cannabis, $1 per THC-infused beverage); there was also a 3% municipal tax on retail sales. Table 4 also provides the general state retail sales taxes by state⁶⁷ to show how cannabis sales taxes differed relative to other product retail sales taxes.

TABLE 4.

Overview of Cannabis Revenue Allocation Toward Community Reinvestment and SE in 5 US States

	Colorado	Washington	Massachusetts	Connecticut	Missouri
Tax (retail sales tax, excise taxes)66	15% retail tax (no excise tax); additional 15% wholesale taxa	6.5% retail sales tax; 37% excise tax	6.25% retail sales tax; 10.75% excise taxb	6.35% retail sales; excise taxes based on THC in different products: $0.00625/mg of THC in plants; $0.0275/mg in edibles; $0.009/mg in other; $1/THC-infused beverage Also dictates 3% municipal tax on retail gross receipts	6% excise tax (no retail sales tax)b
General state retail tax rate67	2.9%	6.5%	6.25%	6.25%	4.23%
Revenue allocation	10% of state’s retail tax revenue allocated to local governments and distributed according to % of cannabis sales within city and/or county boundaries; remaining 90% to cannabis tax cash fund (71.85%), general fund (15.56%), and public school fund (12.59%, distributed to all districts)22,68	State healthy youth survey, cost-benefit evaluation of cannabis legalization, public education materials on health and safety risks of cannabis use, administering cannabis-related laws, drug enforcement task force, and cannabis SE TA grant program; remaining for school-based prevention programs, mental health services, services for pregnant and parenting women, Poison Control, research, etc.22	Administrative costs of cannabis program; remainder spent on: public and behavioral health, public safety, law enforcement training, Prevention and Wellness Trust Fund, and programming for restorative justice, etc. for DICAs22	SE and Innovation Fund to provide capital for businesses, TA for business start-up and operation, and funding for workforce education and community investments; Prevention and Recovery Services Fund22	Administrative costs of cannabis program, then court system expenses for expunging cannabis-related offenses; remaining divided among public defenders, drug addiction treatment, and veterans22,69,70

Abbreviations: DICAs, disproportionately-impacted communities or areas; SE, social equity; TA, technical assistance.

^aCounties and municipalities can impose additional taxes on wholesale, ≤5%.

^bLocalities may impose additional taxes ≤3%.

Across states, cannabis program revenues, including excise taxes and application/license fees, were directed back to cover cannabis program operational costs; the amount of funding allocated to this and other initiatives varied (Table 4). After covering operational costs and contributing to each state’s general fund, revenues were allocated to: law enforcement and criminal justice (Washington, Massachusetts, Missouri); mental health and substance use treatment (Washington, Massachusetts, Connecticut, Missouri); public health and prevention programs focused on cannabis use (Colorado, Massachusetts); public schools/education (Colorado, Washington); SE programs for DICAs (Washington, Massachusetts, Connecticut); research related to cannabis use, treatment, and the effects of cannabis legalization (Colorado, Washington, Connecticut); and local governments (Colorado, Connecticut).^22,68-70 Other initiatives varied, for example, services for pregnant and parenting women and the Poison Control Center in Washington,²² workforce development in Massachusetts,²² and veterans in Missouri.^69,70

Expungement/pardons

Shown in Table 5, 3 states implemented pardons several years after cannabis was legalized, specifically in 2019 in Washington,⁶ 2020 in Colorado,⁷¹ and 2022 in Massachusetts.⁷² The more recent (2023) cannabis legislation in Connecticut⁶ and Missouri⁶ included expungements—a bolder approach.

TABLE 5.

Overview of Criminal Justice-Related Initiatives and Actions in 5 US States

	Colorado	Washington	Massachusetts	Connecticut	Missouri
Year legislation passed	202071	20196	202272	20236	20236
Type	Pardons, automatic71	Pardons, automatic6	Pardons, automatic. Expungement, can petition72	Expungement, automatic6	Expungement, automatic6
Eligible offenses	Possession ≤2 oz.	Single conviction for adult misdemeanor cannabis possession, prosecuted under state (not a local) law between 1/1/1998 and 12/5/2012, when I-502 legalized cannabis possession; must be only conviction on criminal record	Possession of ≤2 oz, or, if cannabis was in primary residence, ≤ 10 oz or ≤6 plants for personal use, or ≤12 plants on premises; Expungement also available in other circumstances	Classified/unclassified misdemeanor (imprisonment <1 y), with a 7-y waiting period from most recent conviction; and Class D, E, or unclassified felonies (imprisonment <5 y), or any conviction for operating under the influence, with a 10-y period from most recent conviction6,73	Possession of ≤33 g cannabis6
Number granted	~2700 pardons in 2020 and ~1350 in 202174	~3500 pardons in Jan 20196	Tens of thousands of pardons in Apr 2024 to address ~69 000 civil or criminal possession violations in 2000-20136,73	~43 000 expungements granted in Jan 20236	>100 000 cases (including >10 000 felonies) expunged in Dec 20236
State population76	~5.9 M	~7.8 M	~7 M	~3.6 M	~6.2 M

Abbreviations: DICAs, disproportionately-impacted communities or areas; SE, social equity.

Eligible offenses varied in terms of: (1) amount of possession (eg, ≤ 2 oz in Colorado and Massachusetts or ≤35 g [1.235 oz] in Missouri); (2) number and timing of convictions (eg, single conviction in Washington); (3) nature of possession (eg, in Massachusetts, if cannabis was in the primary residence and ≤10 oz or ≤6 cannabis plants for personal use, or ≤12 cannabis plants on the premises); and (4) magnitude of offense (eg, in Connecticut, either [a] misdemeanors, with a 7-year wait from most recent conviction, or [b] certain low- to mid-level felonies, with a 10-year wait.⁷³)

Estimates of the number of pardons or expungements granted across states varied: ~3500 pardons in Washington,⁶ >4000 pardons in Colorado,⁷⁴ tens of thousands of pardons in Massachusetts,^6,75 ~43 000 expungements in Connecticut,⁶ and >100 000 expungements in Missouri.⁶ Notably, these numbers do not reflect the population sizes of the states⁷⁶ (Table 5).

Discussion

This analysis of cannabis SE initiatives across Colorado, Washington, Massachusetts, Connecticut, and Missouri (as of December 2024) revealed diverse approaches to promoting equitable entrepreneurship opportunities among those from DICAs, reinvesting in DICAs, and managing the consequences of prior cannabis prohibition. Current findings underscore the importance of timely implementation of SE-related initiatives designed for broad reach in order to facilitate equitable entrepreneurship opportunities, impact DICAs, and address the historic injustices of cannabis prohibition, as delays and restricted SE criteria, allocation of cannabis-related revenues, and criteria and processes related to criminal justice reform could result in ongoing disparities.

Regarding equitable entrepreneurship opportunities, these 5 states had licensing considerations for SE entrepreneurs and similar SE eligibility criteria, trainings, and financial resources, but also distinct approaches to licensure, eligibility criteria, approaches to training, and sources of financial support. As previously noted, a prior study indicated that redistributive justice goals were best facilitated when states issued SE and non-SE licenses at equal ratios and had multiple SE criteria and more discrete DICA and cannabis conviction criteria.¹⁸ Relatedly, eligibility criteria may not be clear or easy to assess. For example, media coverage of Missouri’s lottery system⁶⁴ alleged that over half of the 2022 lottery winners were denied licensure due to inability to prove their SE eligibility^77-79 or because ineligible individuals recruited SE-eligible individuals to submit applications on their behalf and then offered them contracts that severely limited their profits and control over the businesses.^77-79 Furthermore, some criteria have been disputed; for example, Washington’s requirement of 6 months of state residency has been the focus of 1 court case disputing the rationale for such longevity of state residency.⁸⁰

Prior research has also documented the importance of more comprehensive benefits and supports for SE entrepreneurs.¹⁸ However, in these 5 states (and reportedly in other states,¹⁸) states’ annual budgets dictated the amount and duration of support for SE entrepreneurs, which may be particularly crucial for those with limited business experience or financial resources.⁸¹ Furthermore, prior research found that non-SE (vs. SE) retailers clustered in more affluent neighborhoods with more access to commercial and tourist activity,¹⁸ underscoring the need to anticipate additional financial hurdles for SE entrepreneurs.

Importantly, certain states had a significant gap of time between nonmedical cannabis legalization and SE program establishment, which may have led to inequitable business opportunities in the initial years of legalization, particularly in Colorado and Washington.^18,82 Press highlighted concerns that delays in Washington’s SE efforts (from 2014 to 2020) will make it impossible to correct the White-dominated industry. In 2020, >82% of the 484 retail licenses in Washington were White-owned,⁸² although 78% of Washington’s population is White.⁶¹ Relatedly, even well-intentioned, compelling initiatives may take time to implement. For example, the accelerator-type programs are compelling but lack evidence, as Colorado had yet to issue an accelerator license (as of February 2024⁸¹) and Connecticut’s programs are just being implemented.

Notably, these states had varied taxation levels and approaches, as well as diverse ways of allocating cannabis-related revenues. These differences are important to consider, as taxation strategies can increase revenue streams, help make governments more responsive to the needs of its citizens, redistribute wealth and income to mitigate social and health inequalities, and reduce the consumption and negative public health impacts of certain goods, like alcohol, tobacco and sugar-sweetened beverages.⁸³ Indeed, there is a robust evidence base regarding the implications of alcohol and tobacco taxes for reducing negative implications of alcohol and tobacco use and related disparities.^84-86 Importantly, the increased revenues from higher taxes can be reinvested into the community and potentially make larger impacts.^7,87 However, the impacts of how cannabis program revenues are allocated across initiatives are important to assess in terms of population-level health, SE, and other community reinvestment outcomes, as such information is crucial to guide future legislative actions.

Finally, these 5 states’ distinct approaches to criminal justice also are important to note, as there was great variability in eligible offenses and whether reform actions were automatic or required petition,^6,71,72 which likely have implications for the numbers of individuals who benefited from criminal justice reform efforts, as suggested by the number of pardons and expungements granted in each state.^6,74,75 In addition, the fact that some states granted expungements and others granted pardons^6,71,72 may also impact the extent of benefit among those granted expungements vs. pardons.⁸⁸ This is a controversial topic that considers the intended outcome for those granted pardons or expungements and for the population as a whole.⁸⁸ These are crucial outcomes to research, given the ultimate goals of SE-related initiatives.

Strengths and limitations

This study is limited given its focus on state-level initiatives in only 5 states, which may not fully capture the diversity of cannabis SE initiatives across states in the US or within localities in these states. Additionally, analysis relied on publicly available documents, which did not uniformly present information across states and might not reflect the most up-to-date practices or informal programmatic nuances. Relatedly, few state licensing boards publish data evaluating their SE initiatives, making it difficult to identify challenges for these initiatives. However, the current study has some key strengths, given the use of a qualitative case study approach applied to 5 states with varied approaches to SE, which can provide important context and insights for other studies summarizing these SE initiatives across all states.

Implications for Policy & Practice.

• This study revealed significant variations in states’ approaches to enhance equitable cannabis entrepreneurship opportunities, invest in DICAs, and address the historic injustices of cannabis prohibition that have implications for policy, practice, and research.

• First, timely implementation of SE-focused legislation is needed to facilitate equitable entrepreneurship opportunities, and states with already-established markets must consider how to address existing inequities.

• Second, states should consider reserving licenses for SE applicants and using a merit-based allocation system, given prior research indicating the utility of reserved licenses for advancing SE goals¹⁸ and the challenges of lottery-based allocation indicated by press.^77-79 Third, states should critically consider the clarity of SE eligibility criteria and whether these criteria are sufficiently diverse and appropriate for serving DICAs.¹⁸ Fourth, given the diversity of supports states provided to SE entrepreneurs, research is needed to assess the types and levels of support needed to facilitate the success of SE entrepreneurs.

• Fifth, states should critically consider taxation levels and their implications for population-level impacts of cannabis use and for opportunities for community reinvestment.

• Sixth, how different approaches to criminal justice reform—in terms of types of eligible offenses and the process for addressing them (via pardons, expungement, etc.)—may best advance SE goals is important for states to consider.

• Finally, states implementing SE initiatives may benefit from community engagement (eg, via SE task forces or workgroups) and should conduct long-term evaluation using standardized metrics for outcomes across states and include measures at the state level (eg, cannabis revenues), population level (eg, misuse rates), community level (eg, reinvestment outcomes), and SE applicant and licensee level (eg, business success, SE applicant/licensee demographics) to inform future SE initiatives.⁵