Cannabis is the new Big Business
It ain’t a secret, the legal weed game is booming right now. Dispensaries are opening everywhere and marijuana is becoming more and more main stream as many states opt for legalization and social justice reform. Cannabis entrepreneurs, brand names and the like are rushing to get their piece of the American pie (or edible I guess). But how does legalization affect the people who have most directly been effected by years of unjust marijuana laws, policies and community over policing?
Statics show that although marijuana is consumed at pretty much the same rates by Black Americans as it is by White Americans, Black Americans are still almost 4 times more likely to be arrested for possessing the herb. Marijuana penalties range from fines and license suspensions, to ordered rehabilitation and imprisonment. With predominately African American communities accounting for the bulk of the negative impact of unjust marijuana laws you’d think they’d be the first in line to benefit from its legalization, right? Wrong!!
The answer to why is actually rooted in a much larger issue. The vast majority Black Americans simply aren’t equipped with the tools and resources needed to compete with their white counterparts. This is true in all areas of business not just the cannabis industry. But why?
Years of Economic Exclusion has hindered the Black Community
Years of economic exclusion in business, finance, and property ownership have hindered the black community. Today the average black family has a net worth that is 17 times less than that of the average white family. The wealth gap is a direct result of 150+ years of social and economic inequality following the Civil War which freed the American slaves. The wealth gap translates to less economic opportunity because adequate resources are simply too hard to find or not available in most predominately African American communities.
It’s a fact that most African Americans have limited access to capital in terms of credit, bank loans, collateral etc. Black entrepreneurs are also less likely to have friends and/or relatives who are in position to loan or help them access the capital they need to get started. Most often Black Owned Startups take a ground up approach with little to no help from any real outside financial sources.
Requirements to establish and operate a cannabis businesses vary from state to state but there are similarities. Here are some monetary guidelines for opening a medical dispensary in Virginia.
Requirements to open a Dispensary in Virginia
- A non-refundable application fee of $10,000 is due at the time of application submission.
- An initial permit fee of $60,000 is due prior to the issuance of the permit.
- The permit is valid for one year and may be renewed annually pursuant to Board regulations for continued operation.
We can assume the requirements for opening a recreational dispensary in Virginia will be along the same lines as opening a medical dispensary, and as you can see $70k upfront plus another 10k a year is no small order for anyone. This is only the price of licensing and insurance that’s not to mention real estate, product, security, professional services etc. When you add this all up you could be looking at a over quarter million dollars.
Lack of Resources
That being said the majority of African Americans looking to open a licensed canna-business are going to need help, and to get that help, they’ll have to know where to look. Virginia Governor Ralph Northam has consistently stated that social justice reform is a main driving force of weed legalization in our state. There should be cultivation and dispensary licenses reserved for the African American community and measures are to be put in effect that will ensure that inclusion for Virginia’s underserved communities in some capacity.
The commission that will preside over these matters is set to be assembled in July 2021 when Virginia officially legalizes cannabis. Although weed will be legal in July dispensaries won’t actually be opening in until 2024. The cannabis industry here in Virginia is still in its infancy and the official roadmaps have yet to be drawn. One thing is for sure though, if you are not planning now be prepared to be left behind in this ever changing and highly lucrative industry.