The architect of America's first cannabis social equity program says the framework she helped build steered Black entrepreneurs into a business model designed to fail them.
Amber Senter, who co-founded Oakland's equity initiative in 2016, told High Times that legalization "opened a door, but pointed people toward the wrong room." The program became a blueprint for dozens of cities and states trying to address decades of racially disparate drug enforcement. A decade later, Senter argues that the focus on dispensary ownership, which demands heavy capital and tight regulatory compliance in markets dominated by multi-state operators, set equity applicants up to fail.
"We built a system that funneled people with the least resources into the most expensive part of the supply chain," Senter said. Oakland's program prioritized retail licenses for residents with prior cannabis convictions or who lived in neighborhoods with high arrest rates, and other jurisdictions copied the model. Industry estimates now put the cost of opening a dispensary at $1 million to $3 million, money most equity applicants don't have, since they typically lack access to traditional banking and investment.
Few equity owners have opened stores
Data from California's equity programs shows the gap. Of the state's 1,200-plus dispensaries, fewer than 100 are equity-owned, despite thousands of applicants. In Illinois, just 21 of 185 awarded social equity dispensary licenses were operational as of late 2023. Many winners sold their licenses to larger operators or remain stuck in permitting.
Ancillary businesses such as consulting, compliance software, packaging and events require far less capital and face fewer regulatory hurdles. Senter now wants equity participants steered toward those sectors. "The real money isn't in the plant anymore," she said. "It's in the services that support the industry."
Why the model broke down
The equity model assumed licenses held inherent value and that recipients could secure financing. Neither proved true. Banks still largely avoid cannabis businesses because of federal prohibition, and equity applicants, often from communities targeted by the War on Drugs, lack the collateral and credit history traditional lenders require.
Venture capital filled some gaps, but frequently on predatory terms. Management agreements and debt structures often left equity license holders as figureheads while investors controlled operations. Massachusetts regulators have investigated multiple cases of equity licensees signing away majority control.
Senter points to another flaw: the programs assumed retail would stay profitable. Oversupply in mature markets like California and Oregon has crashed wholesale prices, and dispensaries face 70% effective tax rates in some jurisdictions. Multi-state operators with vertical integration can survive the margin squeeze. Single-location equity dispensaries cannot.
Some advocates defend retail
"Ownership of plant-touching businesses puts you in the supply chain's power position," said Jason Ortiz, president of the Minority Cannabis Business Association. "We need to fix the capital access problem, not abandon retail."
Others side with Senter. Several California cities have shifted equity support toward manufacturing and distribution licenses, which cost less to start than storefronts. Chicago's program now includes technical assistance for ancillary businesses. The National Cannabis Equity Report, released in 2023, found that the equity programs with the highest success rates provided direct grants, not just fee waivers, and offered business models beyond retail.
A push to redirect funds
Senter now runs Supernova Women, a consultancy that helps equity applicants pivot to ancillary services. She is pushing California legislators to redirect equity funds from retail incubators to broader entrepreneurship support.
"We can't keep sending people into a system where the house always wins," she said. "Equity was supposed to repair harm. Instead, we created a new trap with a cannabis leaf on it."
Several states with pending legalization bills, including Ohio and Pennsylvania, are reconsidering their equity program designs. Industry observers say Senter's critique could change how the next wave of markets structures reparative justice. It is not yet clear whether existing programs can course-correct or whether a decade of misdirection has already locked out the communities legalization promised to help.
This article is based on original reporting by hightimes.com.
