Billions at stake as Wisconsin dicusses legalizing marijuanaPosted by On


CHICAGO (AP) — The historic hub of black culture on the south side of Chicago called Bronzeville bears the marks of disinvestment common to many of the city’s black-majority neighborhoods.

Along the expansive South Dr. Martin Luther King Jr. Drive, lines of greystones alternate in and out of disrepair, and many of the district’s blocks that were once home to vibrant institutions — earning it the name “Black Metropolis” — are now mottled with overgrown, vacant lots. A census tract within the area is one of the poorest in the city.

But for Seke Ballard and Seun Adedeji, the area is ripe for reinvestment because — not in spite — of it being disadvantaged.

In late June, Illinois Gov. J.B. Pritzker signed a law legalizing the recreational use of cannabis that lowers the barrier of entry to the industry for places like Bronzeville and its residents who have been disproportionately harmed by past cannabis laws and poverty. It takes effect Jan. 1.

Though blacks nationwide use marijuana at similar rates to whites, they are much more likely to face criminal penalties for using it. In Wisconsin, blacks are four times as likely as whites to be arrested for pot possession, where all uses are illegal.

Ballard and Adedeji envision a Bronzeville, a Chicago and an Illinois revitalized by a cannabis industry that is operated by people reflecting the diversity of the state and creating an ecosystem of businesses — including security camera installers, construction contractors and restaurants — to support it.

“It’s a snowball effect, and this is a once-in-a-generation opportunity for people who come from communities that look exactly like this community that we’re in now to really use that spark to jumpstart economic development in those areas,” says Ballard, a Harvard-educated businessman and founder of Good Tree Capital, a firm that lends money to small cannabis businesses.

With 11 states and Washington, D.C., having legalized cannabis for adult recreational use and 33 states plus D.C. with medical cannabis laws, marijuana has quickly grown into an $8 billion industry that shows no signs of slowing down. Wisconsin is debating legalization — but Republicans who run the Legislature are not fully on board.

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The nonprofit news outlet Wisconsin Watch provided this article to The Associated Press through a collaboration with Institute for Nonprofit News.

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Democratic Gov. Tony Evers has proposed legalizing medical marijuana. Evers also wants to decriminalize possession of small amounts of marijuana.

Nationwide, by 2022, legal cannabis revenue is projected to nearly triple from current levels into a $23 billion industry, according to the Arcview Group, a cannabis-focused market research firm.

If Wisconsin were to legalize cannabis for medical uses, there would be a net $1.1 billion positive effect, bringing in additional fees and health benefits while potentially reducing opioid overdoses, addiction and traffic fatalities over five years, according to a cost-benefit analysis by the University of Wisconsin-Madison’s La Follette School of Public Affairs. If the state were to decriminalize cannabis, it would save an additional $30 million in decreased criminal justice costs.

The study did not project potential state tax revenue, but the Legislature’s leading proponent of legalization, state Rep. Melissa Sargent, D-Madison, says such a move could bring in $138 million a year.

The marijuana industry’s continued growth is almost unprecedented. Tom Adams, editor in chief of Arcview, says the only consumer industries to grow as largely and as quickly as cannabis in recent years are broadband internet in the 2000s and cable television in the 1990s.

Owing to marijuana’s continued federal ban, the most critical element for entry is a state-awarded license.

When Florida voters approved Amendment 2 in 2016, legalizing the use of medical marijuana for those with debilitating conditions, the state implemented a merit-based application system, including whether a company had a medical director and its experience with cultivation.

Initially, companies could apply for one of five integrated licenses to be awarded for the entire state. Each “vertical” cannabis license — meaning the one license required for the company to own and operate the entire chain of production from cultivation to retail — allowed the winning company to open up to 25 dispensaries.

With the medical market projected to grow in Florida to $956 million by 2022, a scramble ensued for these five coveted licenses. Since then, the number of licensed operators has grown to 22, an expansion spurred in part by a lawsuit filed against the state.

Although states like Florida and New York have limited the number of licenses and required vertical integration, the merit-based application process effectively gave an advantage to large, well-funded corporations, says Andrew Livingston, an economic and policy analyst for the nation’s largest cannabis-focused…

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