What can state and municipal governments do to promote equity by lowering the cost of starting and running a cannabis business?

It may be easier to start with what they can’t do.

They can’t take away 280e.
They can’t end federal prohibition.
They can’t allow interstate commerce.
They can’t turn a bad growing climate into a good one.
They can’t stop people from accepting bad investment deals.

All these things raise the cost of starting and doing business. And when state regulations further increase that cost, it further gates the industry. Only those with money - or the ability to get it - make it to market and can realize the value of that market.

This may be the part where a libertarian would go on a tear about how all regulations further Stifle Innovation and Discourage Investment and are Unamerican and Anti-Free-Enterprise. This is not a serious position but many take it.

For one, regulation of the product and revenue collection is crucial to getting consumer and legislator buy-in - no regulation, no market, no tax upside. It’s also important to regulate competition to stop concentrated power from sweeping in and gobbling up market share.

Compliance does have a cost. Making that cost reasonable and bearable, while satisfying the need for public health and safety, is essential. Making that cost ridiculously high is a good way to limit entry and encourage shirking.

States can also prioritize efficiency in regulating and approving licenses. This doesn’t so much lower costs as much as it doesn’t drastically raise them, but it’s a basic way to avoid scuttling smaller businesses with minimal runway before they can even leave the tarmac.

A direct way to lower costs is to provide direct cash grants or no-interest loans. Another is to encourage outdoor cultivation and plenty of it, by actively engaging rural and farming communities early. Go where the arable land is.

Another is to make it easier for businesses to rent real estate. Offer prequalification and property tax breaks in disproportionately impacted areas. And commit to keeping to a firm timeline to licensure so landlords and businesses know where they stand before they sign.

Invest in constituent services. Give applicants a number and a name they can call on when the application is confusing or the statute is unclear. Commit to responding to inquiries in a tight timeframe.

HCA reform is an entirely different can of worms but I will just say that requiring from any cannabis business the same level of contract as wind farms and casinos is a great way to exclude businesses without cash or clout.

That being said, the long term effect of HCA fuckery on the local level is still TBD. Some towns might get revenue FOMO and reverse course. Others might just keep soaking applicants. Nothing will change in the near term if the law is not visibly enforced.

Don’t want cities to charge a $100k community redevelopment fee for an HCA? Then perp-walk theIr select board members on the local news.

Cities also have the power to lower costs by making their zoning laws fair, their permitting process transparent, and their own bureaucracy efficient.

There is diminishing value in encouraging people to buy into an absurdly expensive industry unless the state is willing to meaningfully lower costs - in part through subsidies, in part by not forcing the costs up via the licensing process, in part by using their power.