In 2022, the landscape of the legal cannabis industry is still as homogenous as ever, and it’s getting worse.
A 2017 survey from Marijuana Business Daily found that 81% of American cannabis business owners and founders were white and 10% of cannabis business founders identified as Hispanic/Latino or Black. As of last year, despite Black people representing approximately 13% of the population, they accounted for only 1.2% to 1.7% of business owners in the industry, per Leafly’s Jobs Report 2021.
The prevalence of Black entrepreneurs in the cannabis industry varies from state to state, but few states meet a 5% Black ownership rate. In Colorado, Michigan, and Nevada, Black entrepreneurs account for 2.7%, 3.8%, and 5.1% of cannabis business respectively, according to Marijuana Business Daily’s 2021 Women and Minorities in the Cannabis Industry Report. In Colorado’s capital, Denver, only 5.6% of cannabis business owners are Black, and the majority—75%—are white, according to a 2020 survey by the Denver Department of Excise and Licenses.
And while Massachusetts was the first state in the nation to require that equity and inclusion be part of its legal cannabis framework—and the first to launch programs specifically designed to assist entrepreneurs from marginalized communities—the state’s efforts to diversify cannabis entrepreneurship mirrors that of states with less robust initiatives. Even with diversity efforts, in 2020, only 11 total licenses had been granted to the 143 participants of the Massachusetts social equity program and the 122 certified economic empowerment applicants, as reported by WGBH News. As of 2021, 73% of active owners, employees, executives, and volunteers of cannabis establishments in Massachusetts were white, and 64% were male, according to the state’s Cannabis Control Commission data. In addition, Black people held a mere 5% of senior-level positions at Massachusetts-based cannabis businesses, according to a 2021 study published in Cannabis Magazine.
So the question is: Why don’t more Black entrepreneurs have licenses or cannabis businesses?
Many Black cannabis businesses can’t secure funding
“One of the reasons I think we see Black ownership decreasing over time has to do with regulatory requirements and access to capital,” Perry Salzhauer, founding partner of the Greenlight Law Group and chairman of the Incarceration Nations Network, an organization that empowers formerly incarcerated persons to start cannabis businesses, told Fortune.
Ignite Daniel, a neighborhood liaison for Gorilla Rx, a California-based Black-owned cannabis company, noted that startup capital played a huge role in whether or not the company would be able to become a successful business.
Published: April 27, 2022
Founder & Interim Editor of L.A. Cannabis News