The U.S. cannabis industry is exploding thanks to increased medical use and what experts say is the looming certainty of recreational marijuana legalization for adults. Valued at $13.2 billion in 2022, the legal market is projected to expand at an annual growth rate of 14.2% until the end of the decade.
For Black entrepreneurs, excitement over the drug’s rising acceptance is dulled by a lack of equal footing in the marketplace, said Kevin Greene, chief operating officer of the Cleveland School of Cannabis (CSC), a for-profit institution giving marginalized students career-oriented skills in the industry. Less than 2% of cannabis businesses are owned by this population, according to Leafly’s Jobs Report.
Greene attributed this inequality to the war on drugs, which had a disproportionate impact on Black people. Education is the only valid response to these ongoing inequities, said Greene and other Black Cleveland-area cannabis entrepreneurs.
As the country witnesses the birth of a new market, local stakeholders are intent on exposing underserved communities to every vital industry nuance.
“We’ve been miseducated for too long,” said Greene. “What are the ancillary opportunities (in marijuana)? Look at the full picture and don’t box yourself in. The best you can do is look for gaps, then create products and services to fill those gaps.”
CSC offers cannabis certification for students aged 18 to 50 in five areas: Horticulture, processing, dispensary operations, industrial hemp, and medical application of cannabis. Participants pay $7,500-$14,000 for six to eight months of training, transitioning into careers as processing managers, extraction technicians and other marijuana-industry jobs. Scholarships and student loan programs defray program costs, a must-have for an organization intent on uplifting poor and underprivileged populations, said Greene.
Entry-level trimmers, packagers and lab techs typically earn about $17-$20 per hour, though the sector’s rapid growth means entrants can work up to higher-paying jobs without additional certification, said Greene.
While recreational marijuana use is still prohibited at the federal level, two-thirds of Americans want adult consumption legalized nationally, according to a CBS News poll. Greene sees limitless potential in the field for women and people of color, a vision that encompasses prioritizing small businesses and expunging criminal records for nonviolent cannabis crimes. Under Ohio law, a dispensary cannot employ individuals with prior criminal convictions related to cannabis or other controlled substances.
“This is economic development; this is job creation,” Greene said. “We’re talking about dollars spent in the marketplace that becomes taxable income that then gets put back into reinvestment.”
A combination of problems
As long as injustice exists around cannabis, marginalized communities will continue to miss out on the industry’s burgeoning economic impact, said Greene, a Jamaican immigrant who has seen friends and family members suffer under strict prohibition laws.
Marijuana is currently deemed a Schedule 1 drug under the federal Controlled Substance Act, putting it in the same category as heroin. Despite comparable marijuana usage rates to white users, Black people are four times more likely to be arrested for cannabis possession, according to a 2020 report from the American Civil Liberties Union.
When combining policing imbalances with lack of funding access and other biases, the system remains stacked against Black ownership, said Lenny Berry, co-owner and chief visionary officer of Organic Plus Brands. Berry is also founder of the Ohio Cannabis Health & Business Summit, an event at I-X Center that links vendors and industry professionals to the general public.
For starters, Ohio’s medical marijuana dispensary lottery system favors large corporations over minority businesses, Berry said. These mostly white-owned enterprises can submit multiple applications - at $5,000-$25,000 apiece - whereas smaller players cannot afford that.
“People say that’s the way the world works - if you have money to play, you can play differently,” said Berry, whose licensed North Ridgeville hemp company sells edibles like gummies along with hemp-derived tinctures and lip balms. Brands backed by the company are also sold at area smoke shops, with consumers using hemp oil and other products for skin-care routines.
“If you’re going to have a set-aside for people to compete on the level of multi-million dollar companies, then it should be a separate lottery system,” Berry said.
Lack of industry relationships also keep Black owners adrift when it comes to getting products on shelves, Berry added. Even if a Black entrepreneur gets licensed, it’s no guarantee of success, he said. Minority entrepreneurs generally don’t have guidance on compliance or how to procure storefront real estate.
“There’s a lot of hurdles to get to first base,” Berry said. “Prime real estate has been very problematic in terms of licensing. There is filling out applications which are hundreds of pages long. You may not have the money to hire an attorney, and those fees can be anywhere from $20,000-$30,000. And Black and brown people fear that once they get a license, it’s a setup, or if I make a mistake, I’m going to jail.”
Nothing to hide
High-profile reform bills like the Marijuana Opportunity Reinvestment and Expungement (MORE) Act would change the landscape for communities of color, said Bill Williams, president of Columbus-based marijuana processor BeneLeaves.
The MORE Act – narrowly approved by the U.S. House of Representatives last year after an initial passage in 2020 – would remove marijuana from the federal list of controlled substances. Meanwhile, the Secure and Fair Enforcement (SAFE)Banking Act aims to provide previously unavailable banking services to cannabis businesses in states where the drug is legalized.
Passage of such key legislation would have a fundamental impact on industry diversity, said Williams, whose company extracts THC and other compounds from Ohio-grown cannabis, then sells it in vape pens and additional products to dispensaries in Cleveland and throughout the state.
BeneLeaves is not satisfied to wait out the slow grind of bureaucracy, Williams said. The company hosts facility tours, ideally bringing more minorities into the sector as employees and executives.
“You don’t see minority folks at the ownership level anywhere in the industry,” said Williams. “(The tours) are all about letting people know we’re here. Raise your hand, and people like me will do what we can to help.”
Williams said that Ohio can learn from New York, where the recently announced Seeding Opportunity Initiative is giving dispensary licenses to applicants with cannabis-related offenses. Directed at communities hit hardest by unfair enforcement of marijuana prohibition, the plan can similarly be part of large-scale education and social equity efforts in Ohio.
“No program is perfect, but at least (New York) acknowledges the need for reaching out and welcoming participation for all in the cannabis industry. A social equity component to the Ohio cannabis program would only help grow and legitimize our industry,” Williams said. “What’s great about the industry is we are a small network, and we’re building something great together.”
