As cannabis legalization continues to proliferate across the nation, minority business leaders remain locked out of many of the lucrative opportunities presented within this new, burgeoning industry.
Not long ago, marijuana sales were cloaked in secrecy and relegated to darkened back alleys and street corners. It was these very covert operations that placed many Black men and women in jeopardy of being targeted by the criminal justice system.
After state legislative changes, drug money is no longer considered dirty money. Yet, those who have been so disproportionately impacted by the so-called “war on drugs” are ironically, effectively banned from benefiting from the economic boon created by the legalization of weed.
According to Marijuana Business Daily, more than 80 percent of cannabis entrepreneurs are white; only roughly four percent are Black. Although Blacks and whites consume marijuana at relatively equal rates, Blacks are reportedly 3.5 times more likely to be arrested for crimes related to cannabis.
The rank hypocrisy that pervades the industry has become a rallying cry for Black community and business leaders who are now calling for a more level playing field.
For decades, our community has been over-policed and harshly punished for marijuana sale and possession. When the drug was legalized, it created a framework that favored rich, largely white business entrepreneurs’ participation in the new economic opportunities. It is not surprising that the industry that contributed to the disenfranchisement of communities of color would include very little diversity after legalization.
Legalization has not necessarily meant an end to unfair policing practices. For instance arrests for consumption and distribution in Washington DC nearly quadrupled after legalization. Three out of four of those arrested were Black. This disturbing trend could pose a serious challenge to our legal participation in the industry moving forward.
Recently, the Colorado Black Roundtable hosted its first Black Cannabis Equity Initiative to discuss ways to “engage Colorado’s cannabis dispensaries, owners/operators, and industry and government leaders in ways to build equity, diversity and inclusion in the industry.” The event featured representatives from state and local government along with industry leaders.
According to Colorado Attorney General, Phil Weiser, the state is taking steps to address the issue of inclusion in the cannabis space. “We are pursuing new licensing processes that will allow those in low income demographics to receive licenses to do business,” Weiser said. “Specifically, Senate Bill 224 will permit the state to grant so-called ‘micro licenses’ aimed at creating more diversity among those who desire to create a business.”
Along with granting access through creative licensing procedures, local and state government must cease prosecutions for marijuana offenses. Some states, like New Jersey, have gone even further with marijuana legislation that requires 25 percent of all legalcannabis licenses to set aside for minority entrepreneurs.
There are several primary reasons why Blacks have been unable to gain access to the cannabis market on a more significant scale.
First, the application process is confusing and cumbersome; there is little transparency, which makes navigating the process intimidating to those who are not seasoned business people or who lack experience deciphering mountains of government red tape. Add to that, most Blacks lack the resources to secure needed legal representation that would prove helpful.
Second, if you have an arrest or conviction on your record for marijuana sales or possession, your chances of procuring a cannabis license are significantly reduced, if not rendered impossible. Therefore, the war on drugs has now turned in a war on our ability to take advantage of the very situation that caused us to become ensnared in the criminal justice system to begin with—it is a perfect catch 22.
Third, money talks! Entering the cannabis industry requires access to a significant amount of money. In some states, you are required to possess a performance bond of at least $1 million in a secured account before even being allowed to proceed with an application. This money cannot be used to start or operate your business.
It is no secret that access to capital investment is the number one reason why Black businesses find it difficult to grow and expand. The fact that most banks are still not working with the industry because of its continued status as a Schedule 1 Drug at the federal level, makes it that much harder. It can cost up to $3 million to successfully open a top- tier cannabis operation.
Next, we are forced to deal with the notion of “not in my neighborhood.” The Black church is still a force to be reckoned with in the Black community. The perception of legal cannabis maintains a negative perception. This may make setting up a legal weed shop in a Black neighborhood, in proximity to multiple churches, a serious concern.
The first states that approved legal cannabis had relatively low numbers of Black residents—Colorado, Oregon, Nevada and Maine, for instance. Certainly, that story may have been different if cannabis was legalized early on in places like Georgia, Illinois, Maryland and Michigan, where this is an ample Black middle class, entrepreneurial African Americans.
Finally, there is generally a lack of education and information targeting Blacks when it comes to establishing a cannabis operation. Even in the cases where there is government support for equity, the lack of sources of information and mentorship for African Americans, we are still vulnerable to unscrupulous players who take advantage of this lack of knowledge.
It is for these reasons, and others, that the Black Cannabis Equity Initiative launched by the Colorado Black Roundtable is a critical component in helping to increase the number of Black cannabis owners and operators.
According to CRBT President, John Bailey, there are several ways to diversify the cannabis industry. “Too often we think that the only way to get into this industry is to open a dispensary or grow house,” Bailey told those gathered at the December event. There are several other opportunities for us to enter this industry that are far less cumbersome. For example, delivery services, packaging, training, marketing, advertising and public relations, pod casting and blogging, security, video surveillance, logistics, technical support and so much more.”
Bailey intends to host regular meeting of the Cannabis Equity Initiative to further inform the community on ways to enter the lucrative marijuana market.
“Despite the barriers that are keeping persons of color out of the cannabis industry, it is still possible for African Americans to succeed, and with more of us entering the industry every single day, it will only become easier,” Bailey said. “This is an $11 billion industry as of the end of 2018 and it will only grow from here. There is no reason why we cannot enter this industry in some capacity even if we decide not to open dispensaries.”
Clearly, any business endeavor requires a substantial financial and personal investment. Until we can solve the most vexing problem of accessing the appropriate amount of capital necessary, it might be a great idea to consider the ever-expanding ancillary services that support the industry. It is still possible to stake our claim in this brave new world of legal cannabis.