In the Age of Corporate Cannabis, How Can the Biggest Players Support Social Justice?

There is no question that marijuana, CBD, and hemp are fast becoming a very lucrative industry. State-legal cannabis is already a $9.7 billion industry in the US, and is projected to surpass $30 billion globally by 2021. The hemp-derived CBD industry, buoyed by passage of the 2018 farm bill, is projected to reach greater than a $20 million valuation by 2022.

But how can this newly wealthy and successful cannabis industry-at-large use its power to right the wrongs of the War on Drugs? Decades of prohibition, racially disproportionate over-policing and incarceration have ravaged minority communities around the country — now desperately in need of the kind of reinvestment that a new generation of weed money may be able to offer.

“The cannabis industry has a special responsibility to repair the harms of the Drug War, which they profit off of every day,” said Adam Vine of Cage-Free Cannabis. “A sizable portion of their potential competition is still locked up, or continue to deal with the collateral consequences of convictions that remain on their records.”

According to Morgan Fox of the National Cannabis Industry Association (NCIA), "corporate responsibility" should be a core value of the cannabis industry, and one that should be reflected in the discussion around policy reform moving forward. “We have an opportunity — given all the hardships people have had to undergo and the underlying culture that has permeated the industry and movement for years — to make corporate responsibility central to our work," he said.

Responsibility comes with power, which comes with money — and so the cannabis industry has a whole lot of both. On the stock market, cannabis has been a lion (or perhaps a ‘bull’), while 2018 saw the debut of the largest cannabis corporations on U.S. stock exchanges. In July, Tilray Inc. became the first marijuana-producing company to go public in the U.S. on the Nasdaq. Canopy Growth Corp. (CGC) entered the New York Stock Exchange in May, followed by Aurora Cannabis in October.

Bloomberg reports that marijuana stocks in 2018 outperformed Bitcoin, gold, and the broader market. The report also noted that the top three cannabis companies (Tilray, Canopy, and Aurora) account for almost 30 percent of the market capitalization, or value, of the top 100 companies on their cannabis index. In other words, this is quickly becoming an industry dominated by a few very lucrative companies.

Companies like Tilray have been busy partnering with alcoholic beverage behemoths, pharmaceutical corporations, and the vast consumer brand empire Authentic Brands Group to get their products into new markets for new populations. But what would it look like to use the visibility and credibility they have as the world’s biggest cannabis company to advance social equity and justice, inside and outside the industry?

Fox explained that cannabis companies can focus on improving their hiring practices and community outreach, and can direct money towards charity. He cited the example of the NCIA’s scholarship program to help new people attend their trade shows, allowing them to see the industry up close and network with those who are already deeply involved in it.

“The priority has to be giving back to forms of equity, justice and repair with no strings attached,” Vine said. “Companies should focus efforts on freeing people who are incarcerated, clearing people’s records, opening up pathways into the industry for people who’ve been attacked by the War on Drugs, and helping repair the communities that were devastated by it.”

In November 2017, Vine helped form the Equity First Alliance, a national coalition of cannabis and social justice organizations. They hosted the first-ever National Expungement Week in cities like Los Angeles, Denver, Boston, and Washington, D.C., which offered clinics and workshops for criminal record expungement, sealing, legal advice, and other educational services.

“We could start with the collateral consequences of convictions and use that as a roadmap to repair,” Vine said. “People lost access to education and student loans, housing, employment, voter rights, and fundamental services.” Cannabis companies, then, can sponsor and fund these types of programming as a means of uplifting communities. Vine also noted that companies can put money into scholarships, affordable housing funds, and other similar ventures.

“Expungement is one of the greatest examples we’ve seen so far,” Fox said. “And it seems to be spurring state governments to continue that work. For years retroactive amnesty was something no politicians wanted to touch or that most voters approved of, but now it’s becoming the norm in conversations about how to legalize.”

The cannabis industry has to also think about how to grow equitably. While criminal convictions pose an immediate barrier to people working in the legal marijuana industry, one of the most significant barriers any new cannabis company faces is simply the high cost of licensing and legal fees, and startup costs for acquiring land and building facilities and other infrastructure.

The financial barriers of starting a business in the industry are compounded by significant racial and gender disparities. A 2017 survey by Marijuana Business Daily showed that only 19 percent of founders and owners in the cannabis industry were racial minorities. To break it down further, only 5.7 percent were Hispanic/Latino and 4.3 percent were African American. (And meanwhile, blacks are 3.73 times more likely than whites to be arrested for marijuana.)  

A component study showed that women make up only 27 percent of executives in the industry, and that number has decreased from 36 percent in 2015. Besides just alleviating financial pressures in the industry, companies can focus efforts on creating more diversity and inclusivity.

In Portland, OR, the NuLeaf Project by Jeanette Ward and Jesce Horton is developing a grant-funding program to assist new businesses getting into the industry. NuLeaf is raising money to provide up to $30,000 in capital to both new and established companies, with priority given to local businesses owned by people of color. Their program is partially funded by the city government.

Also in Portland, Amy Margolis of the Oregon Cannabis Association is running an accelerator program to assist women entrepreneurs in the industry. Dubbed The Initiative, the program runs three months and offers mentoring, education, and funding to assist a cohort of new businesses looking to raise money and expand. It just kicked off its first classes on January 7.

Many other businesses and nonprofits are mentoring and assisting new entrants in the cannabis industry. The Hood Incubator, based in California’s Bay Area, helps cannabis entrepreneurs navigate the complicated process of successfully applying for a license. It works closely with the Oakland city government and applicants who are eligible for its social equity program, which prioritizes communities disproportionately harmed by the War on Drugs.

Vine emphasized that cannabis companies can direct money towards organizations and governments, which are already doing this kind of ground-breaking work, but just need more funding. “We don’t want to just see a company’s marketing director or a corporate responsibility officer defining what equity means,” he said. “Rather, we should empower people who have been impacted by the War on Drugs to make these decisions.”

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