Some Cannabis Leaders Are Helping to Pave the Way for Minority Business Owners
With social equity programs failing, some trailblazing executives are taking matters into their own hands.
"There's not enough diversity. The cannabis industry looks a lot like tech," says Tiffany McBride, Managing Director of Social Equity Ventures at The Parent Company. Last November, McBride was appointed to her position to help elevate diversity, equity, and inclusion efforts within the cannabis sector.
The data backs her up. White men comprise 80 percent of the cannabis industry, while the number of minority business owners in cannabis consisted of 5.7 percent Latinos, 4.3 percent Blacks, and 2.4 percent Asians.
Although the cannabis industry is exploding and over 34 states have decriminalized the plant, the persistent inequalities prevent minorities from benefiting from the business and financial opportunities the space offers.
"Cannabis legalization alone will not erase the damage and lasting effect the War on Drugs has left in our [minority] communities,'' says Emery Morrison, co-founder of CampNova, a cannabis lifestyle tech company in Los Angeles. "Which is why we need programs to support minority cannabis businesses with resources from the local and federal government with tax incentives or tax reliefs to position our businesses for success."
He and other industry leaders like McBride are trying to change this paradigm in encouraging ways.
An inequality of criminalization
According to the American Civil Liberties Union, Blacks are 3.73 times more likely than Whites to be arrested for marijuana. A recent analysis conducted by NORML found that Black made up 95 percent of marijuana-related arrests. Meanwhile, in Washington, DC, according to a report in the Washington Post, 84 percent of people arrested for public consumption since 2014 were black (after legal marijuana possession took effect), even as they make up 45 percent of the city's population.
McBride believes the cannabis industry owes the Black and Brown men and women in jail investments in social impact and social justice policy reforms, which will get them out of jail and provide them with job training and education to integrate back into society.
"Let's start with our brothers and sisters that are still incarcerated for doing the same work in the same industry that we're out, making millions of dollars, now," McBride says. "We owe it to them to go back and invest in getting them out because they paved the way."
She points to several California cities — Los Angeles, Long Beach, Sacramento, Oakland, and San Francisco — that have created equity programs for people of color and those formerly incarcerated for marijuana crimes. These programs were designed to provide access to all types of cannabis businesses licenses in cultivation, manufacturing, delivery, and retail.
"This is a great start, right?" McBride says. "Government funding is great. We get all the permits. Everything we need is right there and it's expedited. But what happens after that? Where do we go? We can't get small business loans. We can't go to traditional banking institutions."
Is social equity working?
In 2019, the California State's Department of Cannabis Control launched its social equity grants to support local jurisdictions. Other cities and states have implemented their own social equity programs to provide a pathway to more minority-owned cannabis businesses.
But according to cannabis leaders like Morrison, there have been instances where these programs have often failed due to government regulation, lack of capital and resources. Furthermore, according to Morrison, social equity program participants find themselves sitting in vacant retail spaces with no products, atop a pile of paperwork and a mountain of debt — still waiting for the promised leg-up but no movement or prospects. Years later, some are still struggling to open while others are on the verge of stubbing out before even lighting up.
"This cannabis space is tough," Morrison says. "and what we learned from the beginning, just like everybody in the state of California, is you could do everything right, but your business could be affected by unforeseen occurrences, by other people, other entities or for example, the state of California compliance issues."
"But it's not all bad," he adds. "There's enough money for all of us; there's enough opportunity for all of us. But everyone needs a fair chance to get in this business."
Taking matters into their own hands
But some cannabis executives are not just waiting for the government to fix the problem. For example, Morrison offers mentorship with insightful and helpful business conversations and advice. Over the last five years, he's offered insight and support to anyone who asks. The questions varied, and the circumstances were always different, but he says that the important thing was "sharing the knowledge so that they too can find success."
"Not everyone asking for advice is a social equity applicant," Morrison says. "Mentorship, while important, is also about having no ego and not being afraid to ask for help, insight, and support."
Beyond the government's social equity workshops and programs, many cannabis companies, like TPC, Glass House Brands, GHB, and CampNova, are creating their form of social equity support, without the red tape, strenuous applications, and waiting periods.
"One thing about the cannabis space, it's converted from street business to traditional consumer packaged goods," Morrison said. "We need to tap into resources within the cannabis space to learn things about cannabis and have those conversations with each other."
Glass House Brands' Chairman and CEO Kyle Kazan recently joined the board of directors of The Weldon Project, a nonprofit organization co-founded by former and recently pardoned cannabis prisoner Weldon Angelos. GHB also donated $25,000 to The Weldon Project. The nonprofit is dedicated to ending federal prohibition and achieving criminal justice reforms for nonviolent cannabis-related offenses.
CampNova has made strides in supporting minority and women-owned businesses within the confines of social equity programs and others that are not a part of the programs but still need guidance by offering seed to direct-to-consumer mentorship.
"Bill Gates has a mentor," McBride points out. "If he needs a mentor, of course, we're going to need mentors, too. And as long as there are leaders who are looking to grow and develop themselves, there is going to be a desperate need for mentors."
TPC announced, in June, its commitment to investing in a social equity corporate venture fund that will help discover and develop the cannabis industry's future entrepreneurs of color, while offering capital and mentorship necessary to build generational wealth as part of a more equitable and diverse cannabis industry.
"One great thing I can say about social equity entrepreneurs is we find a way to come together to network and to share resources," says McBride.
A success story
Marcus Malone is an example of a Black cannabis entrepreneur who has succeeded with help from his peers. Three years ago, he partnered with former NBA champion Lamar Odom to launch Rich Soil Organics, thanks to a mentorship with Morrison.
"Working in the cannabis space, I knew I was going to need a mentor," Malone says. "I knew I couldn't do this by myself. Because who do you turn to when everybody else in cannabis is not the same as us, nor understands our culture?"
Now Malone is paying it forward, working as Manager of Corporate Communications at Glass House Brands, where he's able to influence the cannabis sector to help get the right people on board to foster more space for diversity and inclusion.
As the cannabis industry develops, Malone and Morrison believe the conversations can't stop. As more states step into medicinal or recreational legalization, new endeavors are raising new unanswered questions. According to Malone, mentorship is a key that will assist the industry in achieving its predicted multi-billion dollar future.
"I think every person in cannabis, especially a minority, needs a mentor," Malone said. "What we're able to do together comes from communicating, and we're able to create history. And so I think this is the formula to help people become successful."