Millennial Money: Changing the face of the cannabis industry
Cannabis businesses have transformed from clandestine ventures to glossy lifestyle brands in a matter of years, thanks to an evolving regulatory and business landscape.
The majority of states now have some form of legalized cannabis, whether for medical or recreational use. The 2021 U.S. cannabis market is valued at $33 billion , according to an analysis by market research firm Grand View Research. That number is forecast to balloon to $84 billion by 2028. These trends indicate a fertile environment for seeding a new cannabis venture.
But while the cannabis world continues to expand, the industry remains overwhelmingly white and difficult to break into for people of color and LGBTQ individuals. A 2017 survey from Marijuana Business Daily found that 81% of cannabis business owners and founders were white. The proportion of Hispanic/Latino owners and founders was 5.7%, while 4.3% were Black, and just 2.4% were Asian.
To help spur greater diversity, here’s how people of color and LGBTQ individuals can spark their careers in cannabis.
Cannabis has been both a weapon against and a balm for racial minorities and LGBTQ individuals.
Communities of color continue to be disproportionately policed for marijuana offenses. Black people are 3.6 times more likely than white people to be arrested for marijuana possession, an April 2020 report from the American Civil Liberties Union found. And during the AIDS crisis , cannabis was one of few treatments that alleviated patients’ pain, which led the LGBTQ community to advocate for legalization. These experiences are the context for today’s push for equity and entrepreneurship in the industry.
“We have a unique opportunity for people to do conscious capitalism,” says Felicia Carbajal , a cannabis activist and executive director at the Social Impact Center, a nonprofit that provides opportunities for underserved communities. “The more BIPOC, the more queer people we have participating, we can force the industry to shift and find some values.” (BIPOC stands for Black, Indigenous and people of color.)
To Carbajal, that means creating equitable opportunities and protecting people from abusive business practices, tokenization and exploitation.
FIND YOUR FOCUS AND KNOW YOUR PURPOSE
To break into the cannabis industry, pin down what kind of work you want to do and your motivation.
“Understand what you bring to the table,” says JM Balbuena, founder of Synergy, a cannabis consulting firm in California. “If you can identify a problem in the space and with your unique skill set provide a solution and then replicate that with other companies, you can create a viable company.”
But just because your skills are transferable doesn’t mean you’ll be the right fit for this fast-paced and rapidly changing industry. Those who succeed tend to have two driving factors: a passion for the cannabis plant and a motivating “why” factor, says Gracie Morgan , director of operations for MedLeaf Delivery, a cannabis delivery company in Oceanside, California.
“As appealing and fresh and new as the cannabis industry is, it requires constant pivoting” to keep up with changing regulations and market conditions, Morgan says. “People who have a hard time pivoting typically don’t last more than three years in the industry. To succeed, it’s really important to identify your ‘why’ beyond something monetary.”
Careers in cannabis aren’t limited to owning a dispensary or working sales at one. There are numerous ancillary opportunities, like jobs in accounting, marketing and recruiting. For this type of work, you could start your own consulting firm or join an already established company. These jobs tend to have lower barriers to entry for those in marginalized communities, since they don’t require the same expensive licensing as “plant-touching” businesses like dispensaries.
KNOW THE REGULATIONS
To have a successful cannabis business, particularly if you’re on the plant-touching side, it’s essential to become familiar with the regulations around cannabis in your state and municipality.
“Cannabis regulations can be absolutely labyrinthine,” says Morgan Fox , spokesperson for the National Cannabis Industry Association.
Fox recommends talking with a legal professional who is versed in local and state regulations. You may want to hire a legal consultant to ensure you remain compliant as laws change. “There are so many companies that focus specifically on compliance for regulation,” Fox says.
FIND FUNDING AND TAP YOUR COMMUNITY
Raising capital for a small business remains a significant roadblock for LGBTQ individuals and people of color, regardless of the industry. To help overcome financial hurdles and find support, veterans of the industry suggest becoming an active member of your niche cannabis community.
“The cannabis industry is all about collaboration over competition when you get into niche groups,” says MedLeaf’s Morgan. She recommends tapping into online networks and attending events organized by people in your specific community.
Your community can become a lifeline of emotional – and financial – support, says Courtney Davis , director of government relations and public affairs at Marijuana Matters, a cannabis advocacy organization
“It’s not always easy to have access to capital,” Davis says. “This isn’t something you venture out on on your own and just think you’re going to be successful. Be bold and realize that you do have support in this industry.”
This column was provided to The Associated Press by the personal finance website NerdWallet. Sean Pyles is a writer at NerdWallet. Email: email@example.com. Twitter: @SeanPyles.