It’s Black History Month. And the looming question in the rapidly evolving cannabis industry is whether Blacks will have a seat at the table

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Today, less than 4% of cannabis business owners are Black and that number is likely to become even smaller as big industry gets ready to move in and take control.

The logic of big industry, writes Shaleen Title of the Ohio State University School of Law, quoting a cannabis industry expert, runs as follows:

Ultimately, a company’s long-term success depends on how well it rides up the consolidation curve. … [W]hether or not you like it, the cannabis industry will progress along the same pathway as virtually every sector that came before. A few strong companies will survive, and the rest will disappear.

That, for instance, is the case with the beer industry: Even though you can find thousands of brands of beer to choose from, Shaleen Title says just two massive firms, Anheuser-Busch InBev and Miller-Coors control over 70% of sales. And wouldn’t you know it, Molson-Coors is a member of the “Coalition for Cannabis Policy, Education, and Regulation,” a group pushing for the federal legalization of cannabis – which just might be because they’re looking to enter the market.

The upshot is that business startups will become increasingly difficult and big industry “will drive many small business owners out of the cannabis market,” notably, “minority participation,” says Robert Mikos of the Vanderbilt University School of Law.

If that turns out to be the case then there’s a certain cruel irony in all of this. Because it’s also the case that the only reason we have an emerging multi-billion dollar global cannabis industry in the first place is because Washington’s political elite have leveraged the past injustices of cannabis prohibition and the Black experience into pending laws – that promise to open those financial floodgates.  

We addressed this just before Christmas in the following post on Cannabis Capitalism. We reprint it here because it’s Black History month, which asks the question: Are Blacks to be fully included in the American experience or aren’t they? Specifically, is the cannabis industry just for the select few – or for the many?  

Cannabis Capitalism: Level playing field or land of the giants?

We’re about to find out what kind of creatures we are. Just as the the growth of a child into adulthood tells you something about the family that raised it, the growth of the infant cannabis industry into adulthood will tell us what kind of capitalistic culture we are: equal & inclusive – or predatory & winner takes all.

An important tell will be whether the industry makes room for small operators; specifically, businesses run and staffed by Blacks, women, and people of color, or whether the industry becomes dominated by large cap, publicly traded, transnational companies like we see with the oil & gas and Big Tech giants.

Let’s remember, the only reason we’ll ever have a viable cannabis industry is because the political class has leveraged the past injustices of the cannabis laws into an argument for reform. Here, for instance, are the noble words of Senate Majority Leader Chuck Schumer this summer introducing legislation to end cannabis prohibition:

At long last we’re taking steps in the Senate to right the wrongs of the failed war on drugs … The war on drugs has been a war on people, particularly people of color. [The Act] will help put an end to the unfair targeting and treatment of communities of color … one of the great historical wrongs of the last decades and we are going to change it.

And to right those wrongs the bill aims to ensure that small businesses and minority entrepreneurs are a “fixture at the table, a place where they have always been sidelined and shutout,” says Schumer.

Fair enough, but legalization alone won’t be enough says drug policy attorney Shaleen Title who spent 3 years on the Massachusetts Cannabis Control Commission trying to make the industry fair & inclusive. Based on her experience, Title says there’s one entity in particular that will do its best to prevent inclusion from happening – big corporations:

I have concluded that . . . the only way to ensure participation by small operators is by . . .  imposing restrictions to keep big corporations from dominating the market.

Over the years she has witnessed corporate efforts to dominate the market and exclude entry to newcomers by, for example:

  • Filing lawsuits against cities and states to invalidate their social equity policies – policies designed to ensure that small businesses and minority entrepreneurs are a “fixture at the table.”
  • Pushing legislation requiring 5 years of experience with state-legal cannabis before you could apply for a license for medical cannabis – designed, says Title, to exclude new entrants from the industry.
  • Buying multiple licenses in all 3 cannabis spaces — cultivation, manufacture, and retail – thus allowing them to take up limited real estate, begin operating, and dominate the market before most social equity applicants even receive provisional approval.
  • And generally using their money & influence to hire former regulators & industry insiders to ensure lawmakers write rules that favor big industry: “In every state that considers legalization, we see similar efforts from existing operators. They seek to be grandfathered in, given priority, secure exclusivity, or invent terms for what is essentially an oligopoly.”

And with a market dominated by a small number of large, powerful firms comes the ability to fix prices, determine consumer choice, set wages & working conditions, dampen entrepreneurial opportunity, narrow the middle class, and continue the centuries old American tradition of excluding the very people – Blacks – that the fledgling industry used as the reason to legalize cannabis in the first place.

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