The Right Stuff: Social Equity Applicant Represents Target Demographics

click to enlarge The Right Stuff: Social Equity Applicant Represents Target Demographics
Courtesy Photo
Tyreese Williams At TNE Farms (dba Tree Junkee)

While it’s not exactly the denouement of the timeless classic Willie Wonka and the Chocolate Factory, the Arizona Department of Health Services will hand out its version of Golden Tickets at 1 p.m. on Friday when it holds a virtual, random lottery drawing for 26 social equity licenses that will be added to the 130 or so existing licenses throughout the state.

One person who will be closely watching the event will be Tyreese Williams, a Phoenix native who is in a partnership with TME Farms, LLC, doing business as Tree Junkee, one of two Black-owned cannabis businesses in Tucson.

Williams and his partner, a former National Football League player who wishes to remain unnamed, have leased a portion of Moe Asnani’s Downtown Dispensary license, but if the gods of chance are on his side, Williams and his partner might soon be able to expand under the new license.

As an established business owner in the Arizona cannabis industry, he might not seem like he is in the target demographic for a SE license, but Williams embodies the spirit of the program as it is designed by Arizona statute.

“I fit the description for the social equity program,” Williams said. “I’m African American and on top of that I understand the rules and the laws on the medical side and the recreational side and my foot is in the door.”

Williams’ story began in 2011, when he was a linebacker for the Yuma Western College football team with his current business partner.

His success on the gridiron was curtailed when he was busted for 1 gram of weed and the small baggie that held the weed was considered paraphernalia.

“It was literally one gram, but this was 2011 and [recreational] wasn’t legal yet,” Williams said. “I got three years of unsupervised probation, a $2,500 fine and I was ordered to take 16 hours of rehabilitation.”

He returned to his home, but struggled to make a living in one of the worst neighborhoods in Phoenix, an area known as “the Blade” near Interstate 17 and Indian School Road.

“I was fresh out of college, doing my own thing and to have to pay that type of fine? I couldn’t really afford it,” he said. “So even the times that I had tried to get a job, they looked at my record and just seeing that I had a marijuana conviction.... It doesn’t say it was just one gram.”

In 2017, Williams and his partner joined forces and “decided to dive into the marijuana industry,” by opening what he said was the first approved cultivation facility in Yuma County.

In 2018, the pair decided to move on from the Yuma market and set up a facility in Tucson.

Williams’ partner put up most of the $1.8 million needed to open the 20,000 square foot cultivation facility and Williams acted as the general contractor, eventually opening TME Farms in 2019, leasing a portion of Asnani’s existing license.

While Williams is already established in the business, Tree Junkee is a very small operation compared to other behemoths in the state such as Mohave Cannabis Company or Harvest Health, which is owned by Trulieve, one of the largest cannabis growers and distributors in the country.

“We’re still newcomers, but we’re keeping our heads above water for sure. It’s a little harder for us, compared to other people that came to the game with major backing,” he said. “A lot of these companies are able to come in and they have $10 million, $15 million, $20 million to just spend as they need. We’re scraping and scrounging just to stay afloat.”

But that could change on Friday when ADHS doles out licenses that could well be worth as much as $20 million when all is said and done.

The license would allow Tree Junkee to open its own dispensary and not have to pay for an outside license to grow.

Arizona’s social equity program was established by the passage of Proposition 207, which legalized adult-use recreational weed in 2020. The provision is intended to help right the wrongs of the decades long war on cannabis that has disproportionately affected communities of color throughout prohibition.

While much has been made of the particulars of the program and lawsuits have attempted to stop the process until the rules can be rewritten, ADHS is moving forward with the program as is.

Arizona is one of 15 states that have SE programs, including Massachusetts; California; New Jersey; New York; New Mexico; Michigan; Vermont; Illinois; Connecticut and Virginia. Colorado and Washington State are developing programs as well.

In January, New York governor Kathy Hochul announced a $200 million fund to get its program off the ground, but most states have conceded to capitalism and SE license holders are forced into an uneven playing field on open markets.

Since cannabis remains federally illegal, most applicants have limited to zero access to capital through banks and must rely on forming “partnerships” with wealthy entities or existing multi-state operators (MSOs).

Jon Udell, director of politics for Arizona NORML and cannabis attorney at Rose Law Group in Phoenix, said there are flaws in most SE programs, as there are many interpretations on what they are intended to do.

Rose Law represents a number of applicants, so Udell was only able to speak in generalities about the program.

“There’s a lot of ways people can reasonably disagree about what the program should do,” Udell said. “I tend to view the philosophical aspect of this thing as incredibly vague: There is no objective truth to what it should look like, so there’s room for differences of opinion.”

He added that how social equity programs are designed has a lot to do with what the outcomes are expected to be, but short of public funding for them (affirmative action, in effect) there will always be someone deserving left out of the industry.

When the ultimate goal is to help lift communities out of poverty and make reparations for past punitive drug laws, programs can be designed to address economic disadvantage or racial inequality, dynamics that often overlap, particularly in communities of color.

In Arizona, social equity candidates must satisfy three of four requirements to qualify, including: an annual household income of less than 400% of poverty level in at least three of four years from 2016-2020; has been adversely affected by previous marijuana laws by way of conviction for the individual or a family member of the individual; or has lived for a least three years from 2016-2020 in one of 85 zip codes identified by ADHS as being disproportionately affected by the enforcement of Arizona’s previous marijuana laws.

Udell says that often when people think of social equity, it is related more to race than socio-economic status. Information on the racial makeup of cannabis business owners is sparse, but the ACLU regularly reports on the disparity in drug-related arrests for Black Americans, who are more than four times as likely to be arrested for the drug than caucasians, according to “A Tale of Two Countries: Racially Targeted Arrests in the Era of Marijuana Reform.”

As far as business ownership in the state of Arizona, Williams says he believes nationwide only 4.3% of the businesses are Black-owned and in Tucson, Tree Junkee is one of only two. The other is GreenMed owner Murphy Kittrell, who recently sold the PurpleMed dispensary to Trulieve.

Udell sees social equity licenses as a way to “correct an historical injustice” that is crippling an entire population in the U.S.

“The cannabis industry has an appalling lack of diversity,” he said. “It’s a sorry state of affairs when people of color are targeted at a rate that’s two to three times the arrests suffered by other folks, despite consuming at relatively comparable rates to white Americans.”

He believes that young Black people seeing the disparity might be inclined to lose motivation to succeed or improve themselves economically.

“People draw a lot of conclusions about society based on what they see around them,” he said. “Those conclusions affect their motivation to try to give back to society and try to better themselves and improve themselves, which is what creates a better world for all of us.”

As far as Arizona’s social equity lottery goes, there were 1,500 applications submitted, but more than one-third of them came from MSOs in the state, including Mohave Cannabis Co., Copperstate in Snowflake and Mint Dispensaries. 

For his part, Williams qualified on all four criteria, and should he get one of the licenses, has a good chance of success in the industry.

“Being in the business will definitely give me an upper hand, since I understand that from both sides,” he said. “If I win, I’m going to put it smack dead in the center of a minority area and I’m going to try my best to give as many jobs as possible to minorities.”

TME Farms’ primary product is Tree Junkee, a “boutique” flower grown with “love and TLC.”

It can be found at Downtown or D2 dispensaries in Tucson, Green Farms Dispensary in Mesa and Flagstaff or Farm Fresh Dispensary, in Lake Havasu. Williams and his partner hope to soon distribute through Jars Dispensary and also begin offering extracts and edibles.

“Our slogan for our brand is Black owned and Black grown,” Williams concluded. “Hopefully, the Lord decides to bless me. If not, I’m already blessed.”

The social equity drawing will be held at ADHS with industry and news media representatives witnessing and streamed live at The accounting and auditing firm Henry and Horne will oversee the drawing.