BusinessColumnistsWilliam Reed

BUSINESS EXCHANGE: Are Blacks Being Smoked Out of Marijuana Dispensary Businesses?

Back in the day, the sale of marijuana was illegal and carried on with staggering racial bias with aggressive enforcement of possession laws that ensnared hundreds of thousands of Blacks into the criminal justice system.

But now, even as Attorney General Jeff Sessions’ Justice Department is set to unveil the War on Drugs 2.0, sale of cannabis is legal throughout most of the county and one of its fastest-growing industries. It is poised to make billions of dollars and provide jobs to thousands. Yet for all its expected growth, very few people of color have been able to get in on the ground floor.

To rectify this problem of growing inequity, Blacks need broader education on the subject and situation. During the ’70s and ’80s, African Americans were disproportionately arrested and incarcerated. Now marijuana is a legitimate business enterprise Black entrepreneurs should be allowed participate in.

The scene on marijuana has shifted. Grandmothers who’ve seen their children’s epilepsy seizures stopped with cannabis oil have become ardent believers in medical cannabis. The market for marijuana dispensing is booming. Seven states and the District of Columbia have legalized marijuana for recreational use. An additional 22 states have made medical use of marijuana lawful. Along with buying marijuana to smoke, customers can now get cannabis-infused candy, cookies, brownies, sodas and cuisine. Revenues from the U.S. marijuana industry are expected to grow to over $21 billion by 2021.

The case should be made by Blacks for “equity across the board” in America. In coming years, the marijuana industry will create more jobs than manufacturing, utilities, or state and local governments. The cannabis dispensing industry is expected to be worth $10 billion in the next years. It’s estimated that less than 1 percent of the nation’s 3,500 cannabis dispensaries are owned by blacks.

Some say it is because of the capital required to get into the industry. 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. In Maryland, the application fee is $8,000 and the licensing fee is $80,000. In Texas, the application fee is $7,356 and licensing fee is $488,520 for a two-year period.

“Equity” is what Blacks should pursue. Whether or not they use cannabis, Blacks should focus on taking advantage of legal business opportunities.

Aside from the religious and social stigma, getting in the marijuana business is difficult for a myriad of reasons. First, prospective merchants need to lay down the groundwork. That includes preparing a business plan. A business plan will help you find investors by providing them with a clear description of the prospective company’s goals, assets, plans and projections. Next, secure the necessary funding, buy or rent a suitable place, then get your permit/license to open.

Truth be told, a lack of information and financing, not race, appear to be stumbling blocks keeping many African Americans out of the booming weed business. Major hurdles for Black entrepreneurs are lack of community and government support and investment money. Blacks aren’t properly informed on how to have a dispensary. Many people don’t have the proper funding nor rapport to walk into a bank and say, ‘Hey, I need a loan for this amount to open a dispensary.’

Make it a political priority to address past disparities in the cannabis industry. Minimize barriers of entry by assuring legislators set aside medical cannabis permits for people in predominantly Black neighborhoods, and that local cannabis commissions be required to have transparent diversity efforts and programs.

William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via Busxchng@his.com.

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William Reed

William Reed is President and Chief Executive Officer of Black Press International. He has been a Media Entrepreneur for over two decades. A well-trained marketing and communications professional, Reed has a national reputation for his expert writing, speaking, organizational, research, management and motivation abilities, along with strong managerial, presentation and sales skills.

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