The Unspoken Racial Side Of Starting A Cannabis Businesses
By Roger Malespin photo/istock/rez-art
The cannabis industry is among the fastest growing and lucrative targets for startup businesses today. Legal cannabis brought in around $9 billion in sales in 2017 and that number is expected to more than double by 2020. With 9 states allowing recreational use and 30 more having some form of decriminalization, there are more places in the country than not for entrepreneurs to plant the seeds, so to speak, for a startup cannabis business. But there are barriers to this endeavor, and one of them that isn't talked about as much as it ought to be is the racial one.
It is true that states like Colorado have made quick and efficient strides in most areas of commercial cannabis and the marketplace is thriving. However, a glaring fact is that the opportunities are open almost exclusively to people with capital, which leaves most Black and Latino would-be startups holding the short end of the stick.
According to investing consultant Andrew Freedman, former chief of staff to Colorado’s lieutenant governor, a startup business would need roughly a million dollars to have a viable shot at sustaining itself. Land, lawyers, lobbyists, and state and city licenses are all going to add up very quickly, and the regulatory codes are always changing. Because banks cannot lend money for a technically illegal business, startups rely on loans from friends and family, as well as private equity loans.
Minority communities have precious little of any of the those to get a leg up in the industry. Instead, they need people who will go out and do the grunt work of informing the communities, and rallying them for city council meetings and hold events for community members to learn about the business. One such advocate is attorney Tsion “Sunshine” Lencho from Oakland.
“we didn’t see anyone black attending these meetings where the city council was talking about ordinances that would have allowed for a locally regulated market. So we decided as a group–there were four of us–that we were going to read the regulations, write summaries, and have free events all over town so our community could come and learn what people who have hired lobbyists or have had the businesses that were considered lawful in the city of Oakland
already knew”, Lencho said. “ we expanded to L.A., Sacramento, and Boston, and have created a network of people of color who are working in businesses, and also on the local and state levels, to figure out how to build an equitable cannabis industry.”
It can be easy to forget that police forces around the country have consistently targeted minority communities at a much higher rate than others for marijuana offenses, and because cannabis businesses are technically illegal in the eyes of the federal government, going into this business as an African-American is most daunting. But according to Lencho, “part of the beauty of the cannabis industry is that we support each other, and there’s a rapid response to law
enforcement intervention, to people being wrongfully prosecuted and [not being paid by] dispensary owners, which happens, particularly when you look like me.”
So let’s continue to support each other however we can. It doesn’t need to be financial - something as simple as keeping informed and passing the knowledge onto others the way Lencho has can be more effective than you might think. The cannabis community is made up of people from every walk of life, and our reputation for taking care of our own relies on all of us to fight discrimination however we can.