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They face financial and bureaucratic hurdles in entering the business, which is growing rapidly.
If the cannabis industry is like Superman, it’s growing faster than a speeding bullet.
Unfortunately, in a tale told too often, Black entrepreneurs mostly find themselves left out of a money-making and potentially life-changing opportunity.
Cannabis data company BDSA projects legal sales of $40 billion by 2026, a 6% jump in sales over the estimated $27 billion by the end of 2022 (final data wasn’t in at the time of the projections, Forbes reported)
But Black people own just 1.2 to 1.7 percent of those businesses, according to a 2021 report from the cannabis use and education company, Leafly.
Leafly notes that the historic inability of Black people to grow wealth impedes them from entering the cannabis business. “Because cannabis remains federally illegal, government grants and bank loans are not available,” meaning that potential owners must fund their business with their own funds or venture capital — both tricky propositions.
Black families only have 10% of the median net worth (about $17,000) of white families, according to data from the Brookings Institute. Additionally, Black business owners traditionally receive less than 2% of venture capital funds, according to CNBC.
“It takes a whole lot of financial stability, and it takes a whole lot of money to get started in this industry,” Calvin Johnson, co-founder of the cannabis company, Primitiv and a former Detroit Lions wide receiver, told the Detroit Free Press.
Rebecca Colett started the Detroit Cannabis Project to help entrepreneurs learn about the industry and understand what they need to get started.
Business owners face a dizzying array of prequalification and licensing requirements on the local and state levels. This process could take up to two years, Colett told the Detroit Free Press.
The owner of the cannabis company, Calyxeum, said about 350 people have taken the project’s courses since it opened two years ago. “I never knew it would grow to be this big, but there’s definitely a need in our community.”
Other business owners worry about the societal implications of legally selling cannabis, while Black people in the U.S. are 3.6 times more likely to face arrest in relation to marijuana, according to an ACLU report.
“When it comes to cannabis, we’re in a state of enterprising now, and we have people who have been incarcerated for years, and generations of families have been impacted directly by the war on drugs,” Ashley Parks, a co-founder of the CBD tea company, BLK Sapote, told the Detroit Free Press. “That needs to be addressed.”
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