No easy glide path for Black marijuana CEOs
Boston conference aims to educate cannabis industry leaders of color
BLACK AND LATINO men were disproportionately incarcerated for decades for drug-related offenses. But when it comes to participating in the emerging legal marijuana industry, only 4 percent of cannabis company CEOs nationally are people of color.
On Thursday, a group of 16 cannabis CEOs of color gathered in Boston as the first cohort of a national executive education program geared toward developing leadership among people of color in the marijuana business. The program is paid for by Parallel, one of the country’s largest cannabis companies and the parent of New England Treatment Access dispensaries in Massachusetts, and run in partnership with Black CannaBusiness Magazine, an industry publication.
Leaders of the business education effort say Black chief executives may have reached the top in the new sector, but they face many of the same challenges from racism and financial exploitation that have been part of the Black experience in America. CommonWealth spoke to Brandon L. Wyatt from Black CannaBusiness and James Jackson, senior director of social equity at Parallel, about the education program and the broader issues facing leaders of color in the cannabis industry. What follows is an edited version of that conversation.
JAMES JACKSON: Black CannaBusiness and Parallel are collaborating on a national education series. It’s aimed at creating more diverse CEOs in the cannabis space. Right now, there’s roughly 4 percent ownership of people of color in the cannabis space, which obviously, thinking about diversity, is alarming, especially considering if you look at the persecution of cannabis and the war on drugs. The Black cannabis CEO intensive program is an immersive experience that empowers minority cannabis owners to thrive in the cannabis industry. We’re providing best in class leadership training and a next level business curriculum.
Participants get a free executive training program that highlights the following areas: finance, risk management, products, customer experience, leadership, and marketing and sales. The program is a hybrid, virtual and in person, with six weeks virtual training, and two days of in-person training. We’re kicking off in Boston, then we’ll be in three other cities.
CW: Why did you choose Boston to host the first event?
BRANDON L. WYATT: Boston is one of the first states to have legislation that recognizes equity and equitable cannabis markets. Sun Tzu said, “The wheels of justice grind slow but grind fine.” As an attorney, I went to Howard University, and I’m an Army veteran. One thing that resonated is justice isn’t in one place. Justice is a mass movement. What Massachusetts was able to do is start to move the ball toward equitable treatment of minorities in the space. We thought that was great. But there’s a true gap in minority business owners and their ability to thrive. Survive is one thing, thrive is another.
I love the Tea Party. I love the idea of out with old ideas, the old regime. The War on Drugs is well documented. What’s not is what’s committed against minorities entering the business now. There’s a lot of predatory actions, overhyped markets, capital loans and sharks taking advantage. I come up from Maryland, Washington, DC, there are many legal matters regarding straw man ownership, where individuals take advantage of minority CEOs.
CW: What skills are you teaching?
WYATT: It’s one thing to get a cannabis business education, but one focused on you is important. Learning styles is important. Minority business owners deserve to have teachers like me who look like them, to provide them with a pathway to success as they define their business, not as someone else defines it or as a straw man.
CW: Is this the first time you’re hosting this, and is there anything else like this in the country?
WYATT: There’s isn’t something like this. We do have schools that offer cannabis education. What we don’t have are programs dedicated exclusively to creating and cultivating minority cannabis CEOs, which is important.
CW: Why is there a need for a conference explicitly focused on Black CEOs?
WYATT: I’m a lawyer, I also went to business school. It was a totally different learning style for an executive MBA. Being able to learn and understand business from a corporate level does speak to legal understanding, foundational business understanding, also mindset and the network. You can’t do it alone.
CW: Massachusetts has a law that explicitly prioritizes social equity. But according to Cannabis Control Commission statistics, only 8 percent of businesses with approved licenses are minority owned. Why is it so hard for minority entrepreneurs to enter the business?
WYATT: It’s not just hard for minority CEOs to enter the business, it’s hard for minorities to exist in America. When you have issues that face a specific population, they’re going to translate into whether that population can do business, whether they’re effective, where they’re received, whether there’s policy and legislation to help with those issues. Eight percent is not representative of all the failed tries, people who’ve been abused, whose father or mother was disenfranchised and never went to college. Federal rules that if you had a cannabis charge prevented you from getting federal student aid existed for 30 years. It’s systemic.
The issues facing minority businesses are reflective of the issues facing minorities in America and around the world, from systemic disenfranchisement starting in elementary school from the education they’re receiving. You have entrepreneurs who need remedial executive training because they missed the opportunity due to the drug war.
JACKSON: Historically, people of color have not been privy to the same information, to the same networks, to the same overall resources that our counterparts have. If you look at the cannabis industry, why only 8 percent when they’ve prioritized it? It really comes down to a number of things, but the end goal is capital. There’s no institutional loans. You can’t go to Bank of America or Wells Fargo, put in a business application and get approved. If you don’t have internal, already built out relationships with people you can call on that can lend you millions of dollars, it’s very difficult to thrive in this industry.
What we are doing is providing the base, the fundamentals, the tools, the networking, the understanding to be able to get a lot of business owners to the point of helping them progress in their conversations around capital. How to get capital, the people they should be talking to, how the investments should be structured, what’s fair. A lot of time in this industry people have been taken advantage of. We want to make sure we’re giving minorities around the country the ability and resources to actually have a chance to be successful in this industry.
CW: How have you seen minority business owners being taken advantage of?
WYATT: In Maryland we had many cases of a straw man. Individuals enter into a relationship similar to a mentor-mentee but the terms of an agreement are so oppressive that once capital is given, if it takes a month longer to open, there’s a default or transfer in ownership or underlying control that effectively and functionally removes that person’s control of that business.
Minorities are faced with alienation, without full understanding of the relationships you need in the cannabis supply chain. I don’t have a good relationship with a cultivator, I don’t get best purchase [in product or price]. There’s a lot less cultivators than there are dispensaries.
CW: One of the biggest concerns has been financing. Massachusetts is talking about establishing a public loan fund but so far it doesn’t exist. Statistically, Black individuals tend to be less wealthy than whites. What advice do you give Black entrepreneurs on obtaining financing?
JACKSON: Make sure that you have everything in place to protect yourself when you’re going out for financing. If you don’t know where to start, things like this program would be able to help you get to a point you can have those financial conversations. Understanding what an operating agreement is prior to going into any financial conversations is huge, because that is where we’ve seen predatory action happen in the past, where folks can take over someone’s company because of a lack of strength in an operating agreement.
WYATT: Wealth is a mindset. Understanding what capital is, the sophisticated instruments that drive capital that must be obtained, that education must be obtained before you sign a document. We’ve seen the sheer excitement of a public fund – that happened in Oakland, folks defaulted. They never had a chance to get into the industry and they owed $80,000, $90,000, a million dollars to a loan given from a public fund that didn’t ensure they had proper education in how to use the capital, they didn’t have a straw man, they didn’t have an oppressive agreement in place.
There’s a gap that exists that we’re filling and the state Legislature can fill through educational programs that come along with loans. You don’t always need a super loan. Sometimes you need a sustainability loan and a great business model.
CW: Is there a state that has done the best job in promoting Black leadership in the cannabis industry?
WYATT: Massachusetts is up there in the top two. The other region would be Washington, DC. Massachusetts has been a great model of what can happen when states focus solely on making sure equitable marketplaces exist.
JACKSON: There are some states that are coming online. New Jersey is doing a decent job in awarding conditional applicants that are people of color. New York is having a lot of positive conversations.
CW: In Massachusetts, there was some talk that the delivery licenses would be a big step for Black as well as Latino and other minority entrepreneurs, since they are being given exclusively to social equity applicants for the first three years. Has that worked in increasing industry diversity?
WYATT: The answer relates to the nexus. One example is Colorado. There’s a participant who has the only social equity license in medical and recreational marijuana for a region in Colorado. He has no clients. No business wants to work with him because delivery is a business model and he hasn’t perfected the understanding of how to maximize the business model. Unless there’s some type of assurance these operators can execute in a manner to ensure they have clients, it’s not going to really increase the growth of participation in the industry. It’s an extremely positive step. It should also have further depth of thought…to ensure operators actually have clients that use them.
JACKSON: At [New England Treatment Access], we have partners that are BIPOC-owned that handle delivery. Chris Fevry at Your Green Package handles our delivery. His business is doing well and growing.
There’s good and bad. You have other people in Massachusetts, some are still struggling to find a home in a municipality that will take them in. Of course, the designation needs to be made. I commend Massachusetts for doing so, and other states should follow the model. There also has to be something that follows up, that provides a different level of support for individuals once they get a license. If they can’t find clients, there needs to be help to find clients. If they can’t find a municipality there should be help from the CCC or the state that helps them bridge that gap. It needs to be a next step, there’s exclusivity for minorities, there’s also assistance that’s offered and backstops built to make sure that not only do they get a license, but they’ll be successful.
CW: Why focus on CEOs? Isn’t there a need to promote Black workers throughout the industry?
WYATT: The reason it’s important to train a CEO is because a boss is a person that creates opportunities for other people. If your CEO is not able to create or sustain an opportunity, the workers don’t have a sustainable lifeline. If we don’t focus on making sure the top of the food chain understands exactly what’s going on throughout their corporate cycle, we put more minority workers at risk of working for companies that might go defunct.
JACKSON: Every day we support people of color who wake up and work in the cannabis industry. The reason we’re being specific around CEOs is that number of 4 percent ownership in the cannabis industry. That’s representative of people that own businesses in the industry, who actually have the opportunity to build wealth within the industry. The only way we change the industry is by empowering individuals to empower themselves, to empower other like-minded people, folks who come from similar backgrounds and communities. At Parallel and NETA we’re hiring Black and brown people every day, but we also want to support people to go out and start their own business.CW: What makes a successful cannabis business CEO, and is it different from what makes a successful CEO in any other industry?
WYATT: The compassion. I’m blessed that I’m not a victim of the drug war directly, but my friends are. Meeting CEOs who are able to come to the industry with love, embrace those folks, fight for them, employ them is a difference in a CEO.