Of the 26 social equity licenses issued last year, only four of the license winners still have an equity stake.
The vast majority of cannabis social equity business permits in Arizona are ending up controlled by the exact demographic for which they were not intended.
Of the 26 social equity licenses issued by the state last year – which were intended for entrepreneurs harmed by the war on drugs – only four of the license winners “still have an equity stake in the lucrative licenses,” according to the Arizona Center for Investigative Reporting. That’s after 10 of them were won by “major dispensaries” instead of small businesses in the first place.
“Existing corporate dispensaries now own half the licenses outright, with private investors holding equity in 10 more,” the center reported.
At least four social equity license recipients thus far have lost legal battles with either investors or “major corporations” when it came down to who was going to be calling the business shots, the center reported.
And of the 13 social equity shops that have opened thus far in Arizona, only one has done so without backing of a corporate sponsor. The other dozen “operate under familiar names like Sol Flower, JARS Cannabis, Story Cannabis, and Mint Cannabis.”
“At this point, there really isn’t much of any way you could call it a social equity program, because most of the social equity qualified applicants have been bought out or pushed out of the licenses that they made possible,” Tom Dean, a cannabis attorney, told the center.
Of the four social equity license recipients that endured legal battles over their permits:
Anavel Vasquez lost hers to a Wyoming LLC named Helping Handz through an arbitration process, and the permit is currently being used by Story Cannabis, which has 16 dispensaries in Arizona, including three social equity licenses.
Keiandrea Mandley lost hers to Mohave Cannabis Co., due to a “predatory” contract she signed before the social equity lottery.
Meagan Dixon and Shonae Johnson sold theirs to a New York LLC named ACP Investments after a court battle.
Denzel Mason lost his to Copperstate Farms due to a lawsuit that concluded in May, and Copperstate bought out Mason in August for an undisclosed sum.
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