Marijuana Industry Needs Black Entrepreneurship

Marijuana Industry Needs Black Entrepreneurship

Legal cannabis opportunities in the U.S. are exploding and the marijuana industry needs black entrepreneurship to be an integral part of the trend.

More Americans support legalization than at any time in the nation’s history. Medical marijuana is now legal in 29 states, and eight states now allow adults to use pot for recreational purposes.

The legal marijuana industry brought in $6.7 billion last year, and is projected to reach $50 billion by 2026. And while more and more budding bud entrepreneurs are taking advantage of the opportunity to make huge profits in the industry, one segment of our society — African Americans — is struggling to get its collective foot in the industry door.

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If the marijuana industry needs black entrepreneurship, what's the problem?

According to a 2016 investigation by Buzzfeed, less than 1 percent of the nation’s dispensaries are owned by African Americans. This dearth of minority ownership, researchers and industry experts say, is due to myriad obstacles not faced by other owners.

First, most states block people with a criminal record from entering the marijuana industry. Since black men are six times as likely as white men to be convicted of a crime and incarcerated, that means they are six times less likely to become pot entrepreneurs.

Second, substantial economic barriers from state to state block African Americans looking to enter the industry. Not only are there very few licenses issued in some states, but the associated application fees, license fees, and startup fees can be cost prohibitive. Applicants in some states also have to pay six-figure deposits and, in states like Pennsylvania, provide proof of $2 million in funding, with at least $500,000 in the bank.

While those who don’t have access to that kind of cash might turn to banks to help fund the launch of other kinds of businesses, the fact that pot is still illegal at the federal level means than banks are unwilling to give out loans to those looking to enter the marijuana industry. Industry experts say these high investment requirements unfairly benefit politically connected individuals, who are typically wealthy and white.

"Marijuana legalization without racial justice risks being an extension of white privilege," says Bill Piper, a lobbyist for Drug Policy Alliance.

Another big factor is African Americans’ disinterest in getting involved in a business selling a drug that has played a pivotal role in the targeting and incarceration of their family and community members. The Trump administration’s renewed focus on the War on Drugs — spearheaded by prohibitionist Attorney General Jeff Sessions — has only increased those apprehensions.

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So, if the marijuana industry needs black entrepreneurship, what's being done?

While the lack of African American entrepreneurs in marijuana industry is disappointing, new initiatives by various states and municipalities are contributing to positive change.

Here a few examples:

  • Portland, Oregon is the first city in the nation to vote to direct part of its cannabis tax revenue toward reinvestments into communities of color. Los Angeles and San Francisco are pursuing similar policies.
  • The city council of Oakland, California recently voted to reserve half of all new marijuana business permits for people with drug arrests on their records or who lived in neighborhoods with a significant number of pot arrests.
  • Florida is reserving one of its future cultivation licenses for a member of the state’s Black Farmers and Agriculturalists Association.

While these pockets of progress are encouraging, it’s too soon to gauge their effectiveness. Hopefully, they will be successful and influence other municipalities to follow suit.

Stay tuned to The Sugar Leaf for future updates regarding this matter.