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Activists, Black-owned weed businesses say N.J. can do more to ensure social equity

A passer-by examines a cannabis sample at the New England Cannabis Convention held in Boston back in March. Some polls show that six in 10 Americans favor marijuana legalization.

Tiyahnn Bryant has big dreams of running one of the first cannabis delivery companies in New Jersey. His company, Roll Up Life, currently delivers CBD products as it waits for the state to open applications for class six businesses, which deal with cannabis transportation.

The East Orange native said that during college, he was troubled to learn that Black entrepreneurs make up less than five percent of the adult-use marijuana industry, even as more U.S. states legalize the drug.

“I smoked a little bit, dabbled in selling weed here and there,” said Bryant, owner and chief executive officer at Roll Up Life, Inc. “I went to college, majored in political science, and started to see disturbing statistics…such as higher arrest rates [in communities of color], such as the war on drugs and what it actually did to the community.”

This inspired him to work toward entering the cannabis industry himself — and making it easier for others to do the same.

Cannabis regulatory officials in states like New Jersey, where residents overwhelmingly voted to legalize weed in 2020, have said “social equity” is a priority in rolling out the adult-use market.

And as New Jersey’s regulated adult-use market begins sales, some business operators and advocates of color have been vocal about what they believe social equity should look like.

“I think there's definitely some things that can be improved,” Bryant said.

Social Equity

Bryant said he feels that the state should invest in programs to help educate people from disadvantaged communities about running cannabis businesses.

He pointed to other states like Massachusetts, which rolled out a free social equity program that provides participants with training and resources in entrepreneurship, management, re-entry and entry-level workforce development, and ancillary business support, according to the state’s Cannabis Control Commission’s website.

Upon completion of the program, participants receive benefits like expedited license application review, waived license application fees, and more.

New Jersey has an application process for adult use licenses that the state’s Cannabis Regulatory Commission, or CRC, said prioritizes people of color, women, veterans, people with disabilities, people from designated economically-disadvantaged areas, and people with cannabis convictions.

At a CRC meeting on March 24, the commission reported that in 2019, 16% of medicinal marijuana license awardees were “non-minority,” and that 44% of awardees did not disclose racial data.

Additionally, the commission reported that of the first 68 conditionally-approved cultivator and manufacturer licenses in the adult-use market, 49% were awarded to businesses operated by majority Black-owned companies, 13% awarded to Latino and Hispanic owned companies (of all races), 25% to majority white-owned companies, and 6% awarded to majority Asian-owned companies.

The commission said that 19% of the initial awardees did not disclose racial makeup.

Entrepreneur Moses Sutton owns Moe Weed, a small CBD shop in South Trenton, which he hopes to transition into a licensed shop that sells THC products. Moe Weed also engages in community activism by hosting workshops about expungement and by organizing food donations, he said.

Sutton believes there is stigma around people of color selling weed. On top of that, he said he initially struggled to find resources about obtaining a license from the state and creating a sustainable cannabis company.

High cost

Cost is also a significant barrier to entry for people who want to open businesses but live in economically disadvantaged cities, like Trenton. Sutton claimed that acquiring real estate to operate a cannabis company can easily cost hundreds of thousands of dollars — or millions depending on the location.

It’s why he believes New Jersey should invest in grants to help fund business owners who lack the capital. Earlier this year, New York announced a $200 million equity fund to help jumpstart its fledgling cannabis industry.

“Corporations have the money. The small business owners don't have the money…To be fair and have a true equitable market…I'm pretty sure…if the state has the funding laying around somewhere, even if it's a small amount they can give out, I believe that will give a person like myself and other small business owners…more of a leg up,” Sutton said.

Bryant would also like to see the state invest in a fund for minority-owned cannabis businesses.

“That's real equity,” Bryant said. “It’s not just throwing down around this buzzword.”

Last week, after the state approved medical facilities, or alternative treatment centers (as the state calls them), to begin selling weed on the adult-use market, Sutton said the move gave larger entities, many of which operate on a national level, an unfair advantage over small New Jersey business owners.

“I believe they should have had everyone start at the same time selling recreational, and that's my personal opinion,” Sutton said.

Backdoor deals

Jelani Gibson is a cannabis reporter and content lead at NJ Advance Media’s “NJ Cannabis Insider.”

He has reported on social equity- and diversity-related issues in New Jersey’s cannabis space over the last year.

“One of the hardest things about reporting on this space is that many of the knowledgeable advocates are also the same people who are applying for licenses,” Gibson said. “And as a result, the things of concern that you hear as a reporter are very hard to get on record with full identification. Because many of those people are essentially afraid of state and municipal-level retaliation.”

Gibson said unnamed sources have alerted him to “backdoor deals that happen at municipalities,” and that he has heard criticism directed at lawmakers, the Cannabis Regulatory Commission, and the governor.

“A lot of people that I have run into are afraid to criticize those levels of government…” Gibson said. “And, so even if there is no retaliation going on, the implied sense of fear, the perception of fear, and retaliation is essentially driving what has the potential to be a non-consensual oath of silence on many of the issues that are happening.”

He said the issue of ensuring social equity does not “exclusively reside” with the Cannabis Regulatory Commission.

“It also resides with how the municipalities do business, with how the legislators do business, and support from the governor's office,” Gibson said.

He said he has also reported on high costs associated with entering the industry, and in many places where local cannabis businesses said they need to hire lobbyists to help gain municipal access.

“When you are dealing with a business that usually requires the services of a lobbyist in order for you to get started in the business, it's usually a rather clear indication that you are not dealing with an entry level business in terms of revenue and capital,” Gibson said.

“Many people can make a business with $250,000 to $1 million. Well, in the cannabis space, for many people, that just might be a downpayment. We're not even talking about construction costs, payroll, and all of the other things that come with running a business,” he continued.

And then there are concerns about what to do with the black market, or the “legacy” market, as some business owners and activists have rebranded the term.

‘Legacy’ market

Some advocates said doing more for social equity would allow street dealers and vendors operating in the gray area to get a foot in the door, even if they still think the legacy market will always be around.

“The black market is still going to persist…” said John Harmon, president of the African American Chamber of Commerce New Jersey. “So the challenge is, how do you reduce that so more people can be a part of the ecosystem where taxes are paid, where it’s regulated, and there's accountability.”

At the same time, Bryant said getting more people to transition to the adult-use market may prove to be challenging because ideology about the process varies.

“A lot of people on the legacy side, have a stigma against the legal industry, stigma against paying taxes on products that they have already…thinking that it's a trap,” Bryant said. “A lot of people feel as though this is going to be what lands them in trouble.”

According to Newsweek, states that legalized cannabis brought in more than $2.7 billion in tax revenue in 2020.

Harmon said that looks promising for New Jersey and that he hopes communities of color will also benefit from the state’s newest industry.

“New Jersey is a high taxation state already and this might enable municipalities to take those resources to reinvest in programming for youth, recreation, and housing. There's a lot of opportunities for those resources to be leveraged to give people a more qualitative life, particularly in some of the underperforming sectors of our state,” Harmon said.