Entrepreneurs of Color Fight for a Fair Share of Legal Weed Wealth

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People of color historically disadvantaged by national marijuana laws are vastly missing the burgeoning opportunities and wealth of cannabis now that legalization spreads across states – and minority entrepreneurs are pushing for change.

“I have long been the only black woman in many plays – sometimes I still am,” said Iyana Edouard, a 27-year-old cannabis marketer and content creator in California. For five years, she ran Kush & Cute, a small business that sold hemp skin care products.

When Edouard started his business, it was one of the few brands of its kind owned by a black woman, but as the industry grew in popularity, the influx of regulations and competition from businesses made it “much more difficult. for little people to stay in the game, ”she said in a telephone interview. In May, Edouard took a break from Kush & Cute.

Minorities, including women, may find that today’s cannabis industry cultivates more diversity, Edouard said, but “it’s easier for rich white women to enter the space because ‘they have the resources.

Because weed is federally banned, bank loans and tax breaks are not an option for people of color who lack sufficient financial support. Meanwhile, venture capitalists and companies with angel investors are building their own cannabis empires.

Iyana Edouard founded Kush & Cute, a small hemp skin care product company.

Photo: Courtesy of Iyana Edouard

While a handful of black celebrities, including rappers Snoop Dogg and Jay-Z, have made their way into the industry, they are outliers in a white-dominated industry. About 80% of marijuana business owners and founders identify as White, according to a 2017 Marijuana Business Daily survey. Only 5.7% of these entrepreneurs are Hispanic or Latino, and 4.3% are black.

“It’s not easy,” said CJ Wallace, 25, who started Think BIG, a black-owned business focused on legalizing cannabis and other social justice issues. It previously sold limited edition cannabis products in 2019.

As the son of the late rapper Biggie Smalls, his family legacy gives him a unique platform, but funding his business through investors and other sources remains a challenge.

“It hasn’t gone as well as people might think,” said Los Angeles-based Wallace, adding that he had seen improvements for his business over the past year.

Federal legalization could solve many problems by lifting heavy financial restrictions. But despite Democratic support, legalization is still a long way off under the Biden administration.

Thus, equity advocates are pushing for smaller gains through other legislative vehicles, such as a bill passed by the House (RH 1996) introduced by the Rep. Ed Perlmutter (D-Colo.) That would offer protections to financial institutions that choose to serve cannabis companies.

The marijuana industry “is really about money and power,” said Edward. “It’s unfortunate, but I hope that will change.”

CJ Wallace founded Think BIG, a black-owned business focused on cannabis legalization and social justice issues.

Photo: Courtesy of Think BIG

Racial disparities

The staggering racial disparity in the cannabis industry reflects a similar trend in the global agricultural industry, where more than 96% of the country’s roughly 2 million farms are run by white growers and black farmers claim around 35,000 farms, according to the last census of the Ministry of Agriculture. .

Farm groups see racism in agriculture and promise to seek change

Cannabis advocates hope to spark a discourse on racial disparities in their industry, highlighting the country’s controversial history of marijuana prohibition – and the industry’s current legal complexities – that disproportionately hurt marginalized communities.

President Richard Nixon launched his war on drugs in 1971, classifying marijuana as a Schedule I drug. His domestic policy adviser, John Ehrlichman, told reporter Dan Baum in 1994: “By bringing the public to pairing hippies with marijuana and blacks with heroin, and then by strongly criminalizing both, we could disrupt those communities. “

People of color ultimately paid the price, with black Americans 3.6 times more likely than whites to be arrested on marijuana charges, the American Civil Liberties Union found out in 2020.

Cannabis business owners must “recognize that the market they find themselves in was built entirely on the backs of arrested people of color,” said Morgan Fox, spokesperson for the National Cannabis Industry Association.

Federal solutions

The federal government still considers cannabis illegal, although the majority of US states (36 states) allow the consumption of cannabis for medical purposes, the National Conference of State Legislatures reported in May. Adults can consume marijuana recreationally in 18 states and Washington, DC, according to the group’s count in June.

Current federal policy means traditional loans, as well as Small Business Administration loans and grants, are “off the table” for cannabis entrepreneurs, Fox said. These are advantages that marginalized communities “traditionally need to be able to enter difficult and severely restricted industries”.

He highlighted Perlmutter’s bipartisan bill, co-sponsored by more than 150 House members, as a legislative solution to promote better access to capital. The measure would give cannabis companies the ability to use the banking system in states with some form of legalized marijuana.

Fox’s group is pushing to remove marijuana from the Controlled Substance Act, which sets US drug policy. According to the Reason Foundation, a think tank, declassifying cannabis would mean eliminating federal penalties surrounding its use, which could allow it to be treated like caffeine or alcohol instead.

Fox also advocates for restorative justice provisions, such as the removal of criminal records. While the legal cannabis industry rakes in billions of dollars, many Americans are still being held down by their criminal records, with some marijuana charges considered crimes.

Kaliko Castille, chairman of the board of the Minority Cannabis Business Association, lobbied the state to push the state to erase the records. He also advocates for more people of color to help draft related state and federal policies.

He still sees a future where the marijuana industry turns into a level playing field for all entrepreneurs, although time is running out as fewer opportunities remain to fairly shape cannabis laws in entering states. the market.

“I don’t think it’s won in advance that we won’t be able to show a new way of creating an industry,” Castile said. But the window for change is “closing quickly”.

More: Click here for a video on how marijuana is both legal and illegal in the United States


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