Maryland's Cannabis Industry Has a Strong Racial Disparity Issue

The 2017 Disparity Study, entitled Business Disparities in the Maryland Market Area provides a comprehensive analysis of the participation of minority- and women-owned business enterprises in Maryland state contracting and in the geographic and product markets within which the State operates.

Managing Director, John Wainwright, of National Economic Research Associates, Inc reported his findings to the Maryland Department of Transportation, which, in turn, provided it to the Maryland General Assembly and posted it on the MDOT website.

As the Principal Investigator for the #2017DisparityStudy, Wainwright was asked by the State of Maryland to examine information regarding the major industry activities and ancillary industry activities that are likely to be involved in the medical cannabis business. Specifically, he was asked:

1. To examine data provided by the State for the medical cannabis business and determine whether the North American Industry Classification System (“NAICS”) codes relevant to the medical cannabis business are different in any consequential way from the NAICS codes included in NERA’s analysis of Maryland state contracting for the 2017 Disparity Study; and

2. To determine whether the 2017 Disparity Study provides an evidentiary basis for applying race- and/or gender-conscious remedial measures, including the State’s Minority Business Enterprise (“MBE”) Program, to the medical cannabis business.

His findings...

With respect to disparities in wage and salary earnings, the 2017 Disparity Study concluded: … [M]inorities and women earn substantially and significantly less than their nonminority male counterparts in the State of Maryland market area. Such disparities are consistent with race and gender discrimination in the labor force that, in addition to its direct effect on workers, also reduces the future availability of M/WBEs by stifling opportunities for minorities and women to progress through those internal labor markets and occupational hierarchies that are most likely to lead to entrepreneurial opportunities. These disparities reflect more than mere “societal discrimination” because they demonstrate the nexus between discrimination in the job market and reduced entrepreneurial opportunities for minorities and women. Other things equal, these reduced entrepreneurial opportunities in turn lead to lower M/WBE availability levels than would be observed in a race- and gender-neutral market area.

[M]inority and female entrepreneurs earned substantially and significantly less from their efforts than similarly situated nonminority male entrepreneurs. These disparities are a symptom of discrimination in commercial markets that directly and adversely affect M/WBEs. Other things equal, if minorities and women cannot earn remuneration from their entrepreneurial efforts comparable to that of nonminority males, growth rates will slow, business failure rates will increase, and business formation rates may decrease. Combined, these phenomena result in lower M/WBE availability levels than would otherwise be observed in a race- and gender-neutral market area

Read the full Racial Disparity Report here