August 30, 2017; The Root
Legal cannabis is one of the fastest growing industries in the U.S. In the next year alone, marijuana is poised to make billions of dollars and provide thousands of jobs. But the industry is dominated by white men. People of color have not been able to get in on the green rush. Now, the Hood Incubator, a people-of-color cannabis collective, is helping keep drug money in the hood.
Writing for The Root, Michael Harriot reports that, according to New Frontier Data, last year, the cannabis industry was worth $7 billion and is expected to triple in value in the next three years. By 2020, the industry will “create more jobs than the manufacturing industry, utilities, or state and local governments.” But, of the 3,000 to 4,000 storefront dispensaries in the U.S., “less than one percent of cannabis dispensaries are owned by blacks.”
There are many probable reasons for this. Most concretely, there’s the capital required to start up. For example, “Pennsylvania requires a $10,000 nonrefundable application fee, a $200,000 deposit, proof of $2 million in funding and at least $500,000 in the bank.” Another is that the industry is still in a gray zone, with relatively uncharted territory and unclear or conflicting laws. Many cite that “the only way to gain entry is to know someone already in the business, which means white people using other white people as resources.” Yet another, and very critical, reason is that drug policies have unfairly targeted people of color and entering the legal cannabis industry requires a background check with no drug convictions.
The Hood Incubator focuses on helping blacks in California transition from underground weed dealers to legal cannabis entrepreneurs by translating and augmenting existing capacities. Founded by two organizers, Lanese Martin and Biseat Horning, and Yale MBA Ebele Ifedigbo, it offers a five-month program that provides legal assistance with the licensing process; marketing, sales, and financing advice (including Shark Tank-style pitch meetings); education on the benefits of medical marijuana; and apprenticeships in the industry.
To date, Incubator graduates have started an edible catering company, opened a dispensary, started a delivery service, and launched a medical marijuana collective. The Incubator’s ultimate goal is to create a collective of investors of color which can invest in every aspect of the industry.
It would seem that, given the challenges cannabis entrepreneurs of color face, there is much room for such projects. A BuzzFeed article last year, headlined, “How Black People Are Being Shut Out of America’s Weed Boom: Whitewashing the Green Rush” by Amanda Chicago Lewis, highlights how the cards are stacked against black people, even though “investors and state governments are eager to hire and license people with expertise in how to cultivate, cure, trim, and process cannabis.”
Even though research shows people of all races are about equally likely to have broken the law by growing, smoking, or selling marijuana, black people are much more likely to have been arrested for it. Black people are much more likely to have ended up with a criminal record because of it. And every state that has legalized medical or recreational marijuana bans people with drug felonies from working at, owning, investing in, or sitting on the board of a cannabis business. After having borne the brunt of the “war on drugs,” black Americans are now largely missing out on the economic opportunities created by legalization.
In practice, the legalization of cannabis and the war on drugs are not talked about in relationship to each other. “No existing marijuana law tries to account for or acknowledge the harm prohibition has done to communities of color.” News reports frame legalization stories with images of “white college kids getting high” or “goofy hippies,” while blacks seeking to enter the legalized cannabis market are subject to discriminatory law enforcement, as gray areas like this are always ripe for bias.
Lauren Vazquez, who spent nearly a decade as a cannabis defense lawyer in California and is now the deputy director of communications at the Marijuana Policy Project, told BuzzFeed News that because of the legal ambiguities in California, only a certain type of person there—mostly young, white, and male—has felt comfortable conducting marijuana business visible to the public.
“It’s the people who push the limits, and those people are privileged people with resources and the ability to take risks,” Vazquez said.
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Chicago Lewis writes that we don’t see black people “sitting on panels at cannabis conferences or weighing in on the latest marijuana court case in the Los Angeles Times.” Further, Sessions’ DOJ memo on marijuana enforcement reinforces the criminalization of cannabis businesses and subjects entrepreneurs to prosecution and seizure of property and cash. After years of biased persecution, people of color are slower to trust the legalization process.
In The New Jim Crow: Mass Incarceration in the Age of Colorblindness, Michelle Alexander argues that “the initial drive for a more punitive drug policy came from white segregationists, who began shifting their anti–civil rights rhetoric in the 1950s and 1960s from direct appeals about the inferiority of black people to racially motivated calls for the need to crack down on drugs and crime.” As a result, “strict drug-sentencing laws would lead to more black people being in the carceral system in 2008 than were enslaved in 1850.”
However, white people who have worked illegally with marijuana receive much attention from investors. Some told BuzzFeed News that “collaboration between finance-minded people and people with experience on the black market can be key.” (In fact, some white cannabis entrepreneurs are indignant, demanding to be treated like any other entrepreneur.) This combination of underground market advantage and white supremacy is “enabling white people to easily transition from man on the corner to mogul in the corner office.”
Nevertheless, there are efforts to include reparations concepts into the emerging legal cannabis industry.
The most promising legal attempts to acknowledge the disproportionate effects of marijuana prohibition are written into the 2016 recreational-use ballot initiatives in Massachusetts and California, which allow all cannabis felons to participate in the industry. In a groundbreaking turn, both initiatives also offer the closest thing possible to reparations for the war on drugs: earmarking tax dollars from the industry for job training and other programs in the communities that have been most affected by past narcotics policies—language designed to avoid the legal complications of explicitly mentioning race.
It seems that, though the movement to legalize cannabis has been wrested from activists by profit-driven investors (in California it was led by tech billionaire Sean Parker), there is still much work to be done in the advocacy arena to ensure that there is economic opportunity for black entrepreneurs and communities. Otherwise, “the cannabis industry may become just another example in America’s never-ending cycle of racially motivated economic injustices.”
Chicago Lewis summed it well when she wrote,
Legalizing marijuana sounds revolutionary, but with every day that passes, the same class of rich white men that control all other industries are tightening their grip on this one, snatching up licenses and real estate and preparing for a windfall. First-mover advantage, they call it.
At this rare and decisive moment in American history, state governments are literally handing control of a multibillion-dollar industry to a chosen few, creating wealth overnight.