With the legalization of marijuana becoming a serious conversation, not everyone is finding that they have a seat at the table. Major companies are raking in investment dollars in some states where startups are struggling for their licenses. Well-funded companies are hiring lobbyists and consultants while minorities are hitting roadblocks in securing financing for their cannabis business. Are these large businesses hurting the budding industry, or helping it?
Two Canadian cannabis powerhouses, Acreage Holdings and Canopy Growth Corporation, both have accumulated large, publicly-traded portfolios. They also have agreed to merge their assets in a $3.4 billion-dollar deal if and when the U.S. legalizes the plant in the next seven-and-a-half years. Such a merger would create a colossally influential entity to push towards legalization. And Acreage Holdings is already throwing its weight around in U.S. courtrooms: the company is embroiled in legal disputes spanning twenty states. From breaching agreements to unauthorized licenses, this could be one messy merger.
When major companies act with such little discretion, it harms small businesses the most. Roz McCarthy, founder and CEO of advocacy organization Minorities for Medical Marijuana, says in an e-mail to Forbes:
“The cannabis industry is rapidly growing and consolidating, and companies like Acreage and Canopy Growth have an opportunity to lead the industry in this conversation.” “The last thing New York or Rhode Island need are conglomerates making it more difficult for the people most harmed from prohibition to benefit from legalization.”
Shannon Jones, a black entrepreneur in Massachusetts, warns that the “[w]indow is closing every day . . . Our ancestors, as black and brown people, would laugh at the fact that we put trust and faith in the government to want to help us.” Jones is currently applying for a license to open a pot café. Of the 184 marijuana business licenses issued in Massachusetts, only two are owned by minorities, people with drug records, or those from areas with high pot arrests.
Larger companies with deep pockets can wait out a sluggish application process easier than smaller companies without, and the result is another undiversified slew added to corporate America. Jean-Baptiste, a black entrepreneur waiting on a preliminary license, reports that his meeting with then-Mayor Bill Carpenter went ignored for months while he signed agreements with better-funded companies. Jean-Baptiste remarks “The [racial] wealth gap alone is ridiculous, and the war on drugs played a big role in that.”
Banking is one troublesome aspect to the pot industry that could pose a healthy hindrance to big cannabis. Due to marijuana’s federally-illegal status, entrepreneurs find it difficult to obtain insurance, start retirement plans for workers, or receive bankruptcy protection. Most of its banking is provided by state-chartered banks and credit unions that are not primarily regulated through the federal government. Some marijuana-related banks charge up to $5,500 a month for a checking account. Without a sophisticated banking process, the industry will be forced to grow at a slower, and perhaps more sustainable, pace.
With the rapid consolidation of marijuana ventures, it is of the utmost importance to the industry for consumers to stay informed and vote both with ballots and dollars. Principles can shape businesses, and Jones, the hopeful entrepreneur, refuses to visit any of her local pot stores. “None of the current dispensaries represent the people I want to support, which are my people.”