Why Blacks Aren’t Getting Into The Lucrative Cannabis Business

April 20, 2015  |  

Snoop Lion may have just invested in a marijuana delivery app, but most African Americans are not cashing in on the now thriving legal cannabis industry. It is actually the fastest growing industry in the country. By latest estimates, it’s a $2.7 billion business.

According to an NBC series called NBCBLK, there are various reasons for the lack of Black presence.

The first reason is a lack of connections and cash. You have to apply and pay for a license to sell cannabis. Some states want you to have a performance bond of $1 million in an account.  Then you must have capital to start a business. It is often difficult for Black entrepreneurs to get loans from banks for business startups.

The process requires a lot of experience applying for government licenses and dealing with government regulators. Being connected to legal representation and/or local politicians is a big help.

Secondly, if you have had a  run-in with the law you probably won’t get a cannabis license. Many states will not let you apply for one if you have had a misdemeanor or arrest for possession of any drug including, ironically, marijuana.  This rule can affect a lot of Black applicants.

“We at the Drug Policy Alliance have been pushing back against provisions that prevent people with previous criminal records as it relates to marijuana from participating in the space,” Dr. Malik Burnett, a policy manager at the Drug Policy Alliance said. “It’s particularly invasive given fact that enforcement of marijuana laws have historically been biased against people of color.”

Another issue is location. Marijuana only grows in certain areas and it has to be in legalized states, many of which, the Drug Policy Alliance notes, have fewer Black residents. But imagine if Georgia legalized marijuana, this could be a game changer, especially for Black entrepreneur-dominated Atlanta.

Also, there is a lack of support in the Black community of cannabis legalization.  You would be hard-pressed to get support from Black churches and community leaders for marijuana shops in their neighborhoods.

Lastly, is the history of Black and drugs. “Because Black and brown people have historically been more likely to be fined or arrested on drug charges, there may be a hesitation for Black entrepreneurs to try to enter the industry,” says the Drug Policy Alliance’s Ethan Nadelmann.

He adds, “African Americans know that whenever something is in a gray area of the law they will feel more vulnerable, and for good reason since statistically minorities are more likely to be targeted or seen as suspects. It may be that the general element of racism and racial disproportionately in law enforcement around drugs can make minorities queasy about entering an area which is not fully legal.”

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