New York’s cannabis licensing is driven by unlawful discrimination

New York recently legalized the sale of cannabis, and entrepreneurs looking to get in on the green rush are now free to submit license applications. But, because of their race, some applicants will find it harder than others to obtain a license.

New York requires “priority licensing” to individuals on the basis of race and sex, among other characteristics, such as residence in a “disproportionately impacted community.” Extra priority is given to individuals from such communities who were convicted of, or had a family member convicted of, a marijuana offense.

The end game: to have 50% of industry licenses given to “equity applicants.”

New York is not the only state to jump on the cannabis industry equity bandwagon. States like New Jersey, New Mexico, Vermont, and Virginia have implemented similar cannabis licensure laws.

Any government policy that shows favoritism toward an individual because of their race or gender is almost always unconstitutional.

Unfortunately, discrimination through occupational licensure is nothing new. In the 1886 case of Yick Wo v. Hopkins, the Supreme Court struck down a law that the San Francisco government used to exclude Chinese immigrants from obtaining laundry licenses.

In a unanimous decision written by Justice T. Stanley Matthews, the Court found the law to be a violation of the Equal Protection Clause of the Fourteenth Amendment. Justice Matthews wrote that if a law “administered by public authority with an evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the Constitution.”

While San Francisco attempted to write its law in a way that made it appear to be impartial, which the Court didn’t buy, New York isn’t even trying to hide its motives. New York’s policy takes license discrimination to the next level by openly disfavoring certain applicants, similar to controversial set-asides in government contracting, or racial preferences in university admissions.

But as the Supreme Court said just this past year when ruling on Harvard’s discriminatory admissions policy, laws that use race to distribute benefits must be designed to directly remedy a past violation of the Constitution. To justify its discriminatory program, New York will have to argue that priority for “equity applicants” is necessary to remedy prior discriminatory violations of the Constitution or statutes, which is often identified as the drug war’s past discriminatory harms.

Make no mistake, the drug war has been—and remains—a national disaster that has undeniably and disproportionately harmed minority individuals. However, giving racial preferences to individuals to open a cannabis store does nothing to directly remedy past problems, like police overenforcement of drug laws. Just as an Ohio court held regarding racial set-asides for medical marijuana licenses, New York’s law does not cut it for a host of reasons.

First, the law itself undermines the remedial justification for its racial and gender preferences by also giving preference to individuals from disproportionately impacted communities. Because this community-based classification is already more directly aimed at remedying past harms, the race- and gender-based classifications are nothing more than an unconstitutional set-aside.

Second, the United States Court of Appeals for the Second Circuit, which has jurisdiction over New York, has already ruled that the drug war’s disproportionate impacts do not violate equal protection. It will be quite difficult for New York to argue that its “equity applicants” are remedying a constitutional violation when the court has already said there is no constitutional violation.

Third, the idea that cannabis license preferences would ameliorate the harms of the drug war is ridiculous. How getting a license to grow, sell, or distribute cannabis in New York solves the decades-long problems with marijuana prohibition is nonsensical. Not to mention, while the policy claims to help those directly impacted by the drug war, applicants aren’t required to provide any proof of harm to themselves individually. Race or gender alone is enough.

Fourth, even if the law were effective at ameliorating the drug war’s harms, this remedial action is not directly related to those harms. In City of Richmond v. J.A. Croson, the Supreme Court held governmental discrimination in a particular industry is constitutional only if it is supported by evidence of prior unconstitutional discrimination in that industry. As far as the cannabis industry is concerned, it’s still in its infancy. For constitutional purposes, the relevant question at hand is not about past discrimination by the drug war at all. Without the prior existence of the industry, there is little, if any, evidence of prior unconstitutional discrimination.

Lastly, this law burdens applicants who share no blame for the drug war. The Supreme Court recognized this problem with race-based classifications in Students for Fair Admissions v. Harvard, a problem that equal protection demands the law avoid.

By creating new racial discrimination, New York perpetuates a never-ending cycle of racial grievance. The Equal Protection Clause contains the promise that we will one day be rid of racial discrimination by the government. New York’s law moves us in the opposite direction.

The drug war is wreaking havoc and despair on countless innocent victims. But using occupational licensure as a tool of zero-sum grievance politics is unconstitutional, displaces licensure laws’ legitimizing public health/safety purposes, and sews social discord. It prevents us from overcoming past policy failures in a constitutional way that benefits all.

As the Supreme Court recently said, “ending discrimination means ending all of it.” New York is on the wrong side of history.