Wanda James and her husband Scott Durrah, first-movers in the birth of Colorado’s recreational cannabis business, just a short time ago were talking and writing about the dearth of Black folks participating in what has now emerged as the Cannabis Industry. Well, judging by the number of Black participants at the recently concluded “Cannabis World Congress & Business Expo” trade show held at the Javits Center in New York City, Black folks have heard the message.
There are more of us than was expected preparing to participate in this new, still highly volatile and unpredictable industry being plagued by a patchwork market built out of a patchwork of legal minefields spread throughout these not quite united states, where in some localities, those with a particular penchant for the “good ole days” that have never quite faded away as we’ve learned from the Prison Industrial Complex where the 13th Amendment simply ain’t relevant, Black people are still more likely to be arrested or harassed for possession of what everyone now reliably knows, is actually quite good for you personally, and judging by Wanda James’ and her fellow Coloradoans, society as a whole. Who knew? Well, We Did!
When an activity gets to the point of having trade shows, you know the boat has sailed on an industry and every enterprising entrepreneur on the planet is going to have a look to see what opportunities are there and how their existing strengths and infrastructure can be adapted to reduce the cost of entry and increase their chance of first-in success. In attendance, there were people in on-line education now giving classes on every aspect of the cannabis industry; there were food processing companies with their latest and greatest tech for extracting, mixing and consuming cannabis extracts, the key form for the medical industry; there were brokers and dealers on the run from the algorithm monster conquering the trading floor on Wall Street, repurposing all of their financial wizardry into new-fangled schemes to get around hostile tax and banking laws. And naturally, the people that know the most about growing stuff where there with their neat, clean and efficient indoor growing operations known as greenhouses that promise a steady, reliable and, depending on your access to knowledge biological, whole new custom strains of cannabis that will blow your mind. Or, my personal favorite, the guy with the vacuum sealer used with plastic food storage packaging now repurposed to keep your weed oxidation free!*
I made it my business to talk with every Black person I saw at the expo. I met students from southern agricultural colleges, successful small business people from more traditionally available “black bidnesses” like office and residential cleaning operations, a baller or two from the record industry, a Corporate Black Guy with all the right connections, an avantgarde couple of sistas with a vertically integrated, horizontally connected, strategically timed tactical plan that transported them from east coast urbania to the mid-west where the laws and attitudes were open for business. There were diverse angles of attack that included some who were planning growing operations, others planning for distribution and sales , and still others contemplating the direct pipeline from seed to dispensary. And while money is always an issue, legal status, banking regulations and federal fickleness were bigger problems for most. The corporate brother had raised over a million dollars through a group of Black investors; the brother from the record business was walking with his own dough from his Brooklyn based pancake franchises, and a couple from the DC area were looking to transition some of their loot from the cleaning business.
What’s at stake here? Well, the legal cannabis industry is made up of three parts: industrial hemp (a wide variety of uses including as paper, fabric, biodegradable plastics, paint, insulation biofuel and more), extracts used in the medicinal industries (50% of medicinal market uses eatables, not smokables), and recreational use. According to a Wikipedia entry, globally, in 2013, 60,400 kilograms of cannabis were produced legally. In 2013 between 128 and 232 million people are thought to have used cannabis as a recreational drug (2.7% to 4.9% of the global population between the ages of 15 and 65). There are now 26 states (including DC), half of the United States, where there is some type of legal framework for using and selling cannabis, with the promise of more to come and, not sooner than we all hope, a federal law decriminalizing the drug is inevitable. Once that happens the financial people are estimating that $45 billion in yearly recreational demand is ballpark, and the overall industry will explode when the big boys storm the beaches with their marketing prowess and inclination to dominate the supply chain.
Back in the early 1990’s scientist cloned what they call “endocannabinoid receptors” that are located in the human brain and throughout the body and are part of the “Endocannabinoid system” (ECS), which is involved in a variety of physiological processes like sleep, appetite control, immune system functions and pain management. The psychoactive ingredient in cannabis, tetrahydrocannabinol, “THC”, is attracted to these receptors and when they interact not only do you feel good, or, “high”, turns out these chemicals are responsible for keeping critical biological functions in balance. When stress throws those functions off, the endocannabinoids move in to restore balance. Voila! The medical cannabis industry now had the science to back up the reported experiences of so many pain sufferers, cancer treatment patients, and seizure victims. Advocacy groups shot up like wildfire and before anyone could blink, big dog social engineer George Soros was funding advocacy umbrellas like, Drug Policy Alliance, and other billionaire evangelist including former Facebook founders, Sean Parker and Dustin Moskowitz, insurance mogul now deceased, Peter B. Lewis, and Pay-Pal founder, Peter Thiel, were all involved in providing much of the money that has gone into the professional organizing effort responsible for the legalization/decriminalization wins on the state level.
Not to get to deep in the woods with the scientific (Wikipedia provides a good overview), but there are three species of Cannabis: Indica, Sativa and the less significant, Ruderalis. On average, cannabis indica has higher levels of THC compared to CBD (Cannabidiol); and Sativa has lower levels of THC to CBD. CBD is the other active ingredient that plays a balancing role in the psychoactive effects of the leaf. Generally speaking, the Indica high has been described as a “body buzz”, whereas, the Sativa high has been described as “spacey, stoned”. Manipulating these levels produces different types of highs. Remember the Acapulco Gold from Mexico that energized you and the Kush that was heavy and drug like, well, those are examples of the differences between Sativa and Indica.
This kind of differentiation could be the only way for the mom and pop to compete when the big dollars are unleashed. Microsoft is in with its inventory tracking and transactional systems being peddled through a software company named, “Kind Financial”; and Philip Morris is in with, believe it or not, a marijuana cigarette marketed under the brand, “Marlboro M”; Big Pharma led by Monsanto and Bayer AG, are in trying to lock down any and every patentable product they can conjure. In some ways, the longer the feds take to decriminalize, the stronger the foothold the smaller entrepreneurs will be able to establish. One guy is unlocking the genetic sequence of the cannabis plant in order to keep the big guys from flooding the patent office with bogus claims on natural sequences and admixtures. As the middle-class continues to try and claw back bits and pieces of the economy of its existence from the rapacious corporate dogs — the buy local movement, coops and urban gardens, anti big-box zoning, craft beer movement, crowdfunding and cryptocurrencies — the opportunity may be in the localization of the ecosystem, like the neighborhood bartender, local green garden and the milkman. I can see the possibilities of developing localized boutique brands that compete with the bigger corporate brands that will become household names (“Marlboro M’s”, a reality, not a dystopian projection).
But, it will take money. Once upon a time (pre-2009), the average homespun entrepreneur would have to rely on friends, family and personal business associates in order to raise startup funding for a new venture. Today, crowdfunding has unified this “friends, family and business associates” network into a large, interconnected, efficient and effective funding juggernaut accessible to all of the thinkers, tinkerers and entrepreneurs looking to create and innovate.
Silicon Valley has been the biggest winner in the crowd funding space because they have enough self-confidence to create a whole new solar system! It’s a small group of self-confident and capable people that are getting together to encourage the best and brightest to innovate and create the world they envision. These Silicon Valley entrepreneurs and their supporters are not trying to proselytize the whole world, they aren’t waiting until every last man, woman and child has joined hands, or waiting on that one big-dog angel investor to anoint them into the club of the rich and infamous. Through crowdfunding, the Silicon Valley crowd has essentially moved on from Wall Street and their last in most out predatory predilections, and have empowered themselves to achieve great and useful things. Kickstarter and Indiegogo did not exist in 2008 when Obama won the presidency. A mere eight years later, they are now responsible for billions of dollars in transactions that Wall Street has nothing to do with. Crowdfunding has liberated the brainiacs from the sociopathic money men whose motto is: “Too Much Is Not Enough!”
And crowd funding can liberate “Black folks with a self-centered, historical view of the world” from their terminal dependence on this same political and economic elite that will exploit its own shadow for being slightly behind. In a surreptitious and brilliant way, Barack Obama has handed the collective Black community a mechanism that can be utilized to accomplish tactical and strategic goals aimed at making our community more competitive across the globe. Title III of the Jumpstart Our Business Startups Act, Section 4(a)(6) creates a securities-based crowdfunding market. What that means is that instead of getting a t-shirt proclaiming your status as a “donor”, you can now get an ownership share in the company — equity — and share financially in its potential success.
Here we have two pieces of a business infrastructure emerging contemporaneously — Cannabis and Crowdfunding — that are heretofore unencumbered with the traditional barriers to entry, which gives us an opportunity to be competitive. This is big for us!
“When the script is written about this particular time in history, the fact that the first Black president of the United States was the one to usher in this revolutionary piece of legislation won’t seem at all coincidental. It will, in fact, be looked at as a master stroke of strategic and tactical planning and execution in the never-ending competition for civic efficacy amongst social groups. Obama will look like a genius in 50 years … but only if we seize this moment, this opportunity, to turn our collective pennies into investment dollars to Fund The World We Want To See!”
Black folks have long been associated negatively with weed, from the abusive arrests that fed the cheap labor needs of corporations and municipalities throughout the United States, to the local weed dealer that always seemed to be a Rastafarian with a record store. Can that negative association be transformed into a strategic asset? Does the rush to legalize being funded by these billionaire social engineers mean that the business opportunity train has already left the station? There are a couple of indicators that I will be monitoring to determine whether we can flip the script on the negative association and turn it into a competitive brand that can fuel opportunities to build an infrastructure of self-sufficiency. First and foremost, money. We will have to take serious the ole’ adage, “you’ve got to pay the cost to be the boss.” Crowdfunding via the Internet is a game changer; equity crowdfunding is a nuclear strike against the house of Wall Street. I am personally promoting the crowdfunding proposition, CulturalGrassroots.com, as the best approach to building a portal focused on increasing Black competitiveness worldwide. If we can get past asking ourselves questions like, “Why Do We Need a Black Crowdfunding Portal?”, that will be a significant sign that important segments of our community are thinking strategically about our collective progress.