PROVIDENCE – How much of Rhode Island's potential new cannabis revenue should be placed in a special investment fund for communities most affected by the "War on Drugs" – such as Providence, Central Falls, Woonsocket and specific census tracts in Newport and Pawtucket?
During a legislative hearing in April, legislators and other advocates first made the pitch for 50% of a potential $138 million in cannabis tax revenue to go into a new "Disproportionately Impacted Areas Investment Fund" for improvements in health, housing and public education in these communities.
And they made it again at the Rhode Island State House on Thursday, May 8, for H5829.
"We can right some of the wrongs that were committed in these communities over the decades that we unfairly treated people and criminalized people in ways that we know now are completely useless and unnecessary," the lead Senate sponsor of S531, Jonathon Acosta, D-Central Falls, told a news conference.
"Let's keep it real," said Rep. Cherie Cruz, D-Pawtucket, a co-sponsor of the House bill. "Three generations of my family have been harmed, including the incarceration of my son for a dime bag of cannabis before legalization in the same community in which I'm a state representative today," where there is still "active racial profiling."
"It is time to tip those scales of justice, repair the harm, and open up access to directly impacted [Rhode Islanders] that will give them a chance to make their lives and our state whole again," she said.
How much money are they talking about?
Unknown, because Rhode Island has not yet fully opened the doors to its legalized cannabis industry.
State law already calls for a "social equity assistance fund." Right now, none of the excise tax revenue is directed to this fund.
Funded instead through the license fees of some 60 operating marijuana cultivators and seven dispensaries, the fund was established to offer financial assistance and business guidance to qualified social equity applicants wanting to get into the marijuana industry.
The fund currently has $2.2 million in it, according to the Cannabis Control Commission, which the advocates say is not nearly enough to help those it was intended to help set up shop in the industry.
The proposed new law would redirect half of the 10% excise tax the state levies on recreational cannabis sales and distribute that money evenly between the social equity fund and the new fund earmarked for improvements in "disproportionately impacted areas," such as health, housing and public education.
"To my understanding, the average cannabis dispensary requires $1 [million] to $2 million in start-upcapital," Nicole Tingle, the political action chair of the Rhode Island Coalition of Black Women, told legislators at the April 8 House committee hearing.
Numbers flew that night and again at the May 8 press conference. Among the projections:
With no change in the law, the advocates anticipate about $8 million in the social equity fund by 2034 and a potential $417 million in the state's general fund from cannabis tax revenue with all 33 dispensaries open.
If H5829 were to pass, the advocates project that the equity fund alone could grow to $135 million by 2034.
The general fund portion would shrink, but as the advocates see it, it would still have a "robust few hundred million."
The pushback
And therein lies the challenge for the advocates: The diversion of any potential new state revenue is possible but unlikely in what legislative leaders have described as a tough budget year.
Kimberly Ahern, the chair of the state's Cannabis Control Commission, raised other issues at the April 8 hearing:
"We understand and value this bill’s intent to direct cannabis tax revenue toward addressing systemic harms in communities most impacted by past enforcement practices."
But she said the Cannabis Control Commission is the wrong agency to put in charge of advancing the goals of the legislation "in areas such as housing, education, public health, and youth development."
"Our agency is fundamentally a regulatory body. The day-to-day administration of a fund with broad social service objectives would be better suited to agencies with the infrastructure, subject matter expertise, and operational capacity to effectively manage such wide-ranging grant distribution."
Richard Leclerc, director of the state's Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, also lauded the goals but voiced concerns about the proposed diversion of 50% of the cannabis excise tax revenue that current law commits to "a position responsible for substance use prevention, especially among underage users."