Under legislation introduced on Tuesday in the Rhode Island House and Senate, 24 recreational marijuana retail licenses will be issued upon passage and the subsequent promulgation of rules by the newly created “cannabis control commission.” Six licenses will be reserved for “social equity applicants” – that is, people representing communities that suffered disproportionately during the multi-decades long and ultimately failed “war on drugs.” Six more licenses will be reserved for issuance to workers’ cooperatives, which are employee owned businesses that share profits equally among all employees. The remaining twelve licenses will go to what I’ll refer to as “Big Pot” – millionaire investors and out-of-state venture capitalists.

This is a wasted opportunity. 

Certainly there should be licenses for social equity applicants. But why just six? If we were to somehow add up the costs of the war on drugs in terms of families torn apart, lives destroyed and misery created, six licenses seems like an insult, not an honest attempt to make up for decades of racialized policing and abuse. A more serious offer would be in the realm of 75% or more licenses for social equity applicants. 

Rhode Island’s business incubators and the Commerce Department should be eager to provide the training and resources needed to ensure the success of these new businesses. But these shouldn’t be ordinary businesses. Why should we allow the millionaires and private equity investors to dominate the fledgling marijuana industry in Rhode Island when we can instead build a new kind industry, the first anywhere, based entirely on a cooperative model?

At their simplest, cooperatives are businesses that are owned by workers, run democratically by workers, and profits are shared equally among the worker/owners. The money generated by this new industry of cooperative businesses will not leave the state and flow to banks in New York, it will go to people and families here in the state, encouraging local investment and purchasing. These families will build homes, spend money in local businesses, pay taxes here in Rhode Island, and begin building generational wealth. 

Imagine 24 new businesses, each with 30 employees making the kind of money that will support new families. We’re talking about hundreds, and eventually over a thousand families all thriving, working, living and spending right here in our state.

Dollars spent in the local community circulate through the local community, spreading that wealth. A family making enough to eat out will spend money in local restaurants, and buy their groceries in local stores. 

Cooperatives build communities – not just among the worker/owners, but also outside the business and in the community. Instead of encouraging predatory businesses that drain money away like  payday lenders, a worker/owner run cooperative will have the community connections that leading to community investment.

All decisions cooperatives make are decided democratically by the worker/owners. Businesses with a strong democratic ethic and profit sharing will attract top talent eager to get in on that action. The employees will be driven to succeed not because they want a paycheck and need to keep their millionaire bosses happy, but because the know that the harder they work, the more money the business they own will make.

If you lived in Seekonk and had the choice between spending your money at a corporate pot warehouse in Massachusetts or a super cool worker owned cooperative in East Providence, where would you rather shop? Worker/owners will see customer service as more than selling the boss’s product, they will see it as a way to show pride in the business they are so eager to make successful.

Cooperatives have challenges. For instance, they have difficulty finding funding. This is where government can step in and provide assistance. If the state is going to subsidize businesses, why not do so for a brand new industry that has the potential to bring over a thousand people into the middle class in a few short years?

Cooperatives also have a hard time competing with businesses that are not cooperatives. Decisions democratically made are slower than those made by a sole entrepreneur making gut decisions fast. There are ways to organize cooperatives to avoid some of this, but how much better would it be if the competition were entirely other cooperatives? All cooperatives would be on more or less equal footing and they wouldn’t have to worry about competing with companies that have millions in out of state investments and non-cooperative decision making structures.

We are talking about 24 new multimillion dollar businesses, 75% of them with a social equity component and all of them centered on a worker/owner model. This can only have a positive effect on Rhode Island’s economics. To foster this, government needs to step in with the seed money, the legal structures and the business help these new companies need. The mission and scope of the “cannabis control commission” should change. It should provide bookkeeping and tax help, location services and whatever else these businesses need to  succeed. We have the opportunity to establish a new and robust industry that can be uniquely Rhode Island.

And while we’re at it, let’s get rid of the name “cannabis control commission” and come up with something better, like the “Cannabis Cooperative Incubator.”