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September 13, 2022
The Cannabis Industry Is Racially Biased—Here's Why, and What We Can Do About It

BY BEN THOMAS | Illustration by Jacob Shpall

Cannabis legalization has taken some major steps forward over the past decade. As of June 2022, a full 19 states have legalized or decriminalized weed, which is projected to grow into a $32-billion market by the end of the year. But this industry still has one pervasive and obvious problem: It is “overwhelmingly white.” At least 70 percent of executives at America’s 14 top cannabis companies are white men, a 2021 Business Insider survey reports—while only seven percent are Black. Among small cannabis business owners, meanwhile, a 2017 survey found that 81 percent are white, while only 5.7 percent are Latinx, 4.3 percent are Black, and 2.4 percent are Asian. 

These are sobering statistics for an industry that prides itself on social equality—especially in an era when Black Americans are arrested at 3.73 times the rate of whites, and are far more likely to be charged and imprisoned on nonviolent cannabis convictions. In fact, at this very moment, while white male entrepreneurs land eight-figure investment deals to grow and distribute cannabis, hundreds of thousands of Black and Latinx Americans are serving mandatory life sentences for possessing small quantities of the exact same plant.

“After 40 years of impoverished Black kids getting prison time for selling weed, and their families and futures destroyed… now, white men are [legally getting] rich doing precisely the same thing,” says Michelle Alexander, associate professor of law at Ohio State University and author of The New Jim Crow: Mass Incarceration in the Age of Colorblindness.

How did this happen—and what can we do to start fixing it? To answer those questions, we’ve got to take an unflinching look at the aftermath of America’s war on weed, and face the facts about who’s really benefiting the most from legal cannabis.

America’s drug war has been explicitly fueled by racial hatred since the beginning.

Today, many of us associate the U.S. war on drugs with President Richard Nixon. It was Nixon, after all, who signed 1970s Controlled Substances Act into law, lumping cannabis into the same Schedule-I category as lethal chemicals like heroin, and helping pave the way for today’s private for-profit prison system, in which millions of Black and Latinx Americans have been locked behind bars on nonviolent drug charges.

However, Nixon wasn’t the father of America’s drug war. That title goes to Harry J. Anslinger, chief of the Federal Bureau of Narcotics throughout the 1930s—a racist hate-monger infamous for spouting deranged quotes like, “[The] Satanic music [of] jazz and swing… result[s] from marijuana use,” and, “Reefer makes darkies think they’re as good as white men.”

Straight from the start, Anslinger’s war on cannabis was explicitly driven by his personal fear of Black Americans; a fear shared by many white people in the ‘30s. In publications like 1937’s “Marijuana, Assassin of Youth,” Anslinger alleged that cannabis was responsible for murders and suicides throughout the country—most involving “Negroes, Hispanics, [and] Filipinos.”

Anslinger’s fear campaign worked. By the late ‘30s, newspapers were regularly running headlines like, “Murders Due to Killer Drug Marihuana.” In 1937, Congress (and many state senates) passed the Marihuana Tax Act—making non-medical cannabis illegal, and setting Anslinger’s enforcers free to raid jazz clubs, plant evidence, arrest Black Americans by the thousands, and railroad them into state and federal penitentiaries.

From there, it was a short leap to Nixon’s 1970 signing of the Controlled Substances Act—in fact, the motivations behind this legislation carried a tragic echo of Anslinger’s race-hatred.  “The Nixon White House... had two enemies: the antiwar left and [B]lack people,” Nixon’s chief counsel John Ehrlichman recounted in a 1994 Harper’s Magazine interview. “We knew we couldn’t make it illegal to be either against the war or [B]lack,” but it was possible to criminalize chemicals the public had learned to associate with those communities. Then “we could arrest [Black and hippie] leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.”

From 1980 to 2019, the number of Americans behind bars for nonviolent drug offenses skyrocketed from 50,000 to more than 430,000. In 1994, the Clinton administration’s Crime Bill imposed even harsher mandatory-minimum sentences for drug-related convictions—an overwhelming majority of which continue to target people of color. To this day, Black Americans are arrested for cannabis possession nearly four times as frequently as whites, and are five times as likely to be incarcerated due to those charges.

Cannabis convictions have left communities of color economically decimated

America’s war on drugs has always been about putting more Black Americans behind bars—and the damage inflicted by incarceration doesn’t end when a person walks free. More than 30 percent of people released from prison remain jobless for at least four years, and most remain trapped in dangerous and/or low-wage jobs for the rest of their lives. Black Americans are less than half as likely to finish high school as the general public, and are eight times less likely to complete college. They’re also far more likely to suffer from chronic depression, PTSD, and other mental illnesses—all of which can further disrupt their paths in life.

Still worse, an individual's incarceration inflicts long-term damage on the lives of many people around them, too. People with incarcerated family members have statistically shorter life expectancies and overall health, and are more likely to develop substance use disorders and other mental health issues. Studies show that children of incarcerated parents are six times more likely to become incarcerated themselves, due to the traumatic effects that put a students' education, health, and social relationships at risk.

Multiply these statistics by the millions of Black and Latinx Americans systematically targeted by drug-war law enforcement, and it’s clear that cannabis arrests have stacked the economic deck against entire communities of color. For nearly a century, racially biased drug arrests have stunted the educational and career prospects not only of the people arrested, but also of their partners, relatives, children and grandchildren—“enabling a new regime of race-influenced employment discrimination,” and locking most people of color out of a legal cannabis industry that continues to favor their oppressors.

Today’s legal cannabis culture strongly favors white entrepreneurs and execs

In 2021, New York’s Marijuana Regulation & Taxation Act (MRTA) was hailed as “one of the most progressive cannabis laws” ever passed in the United States. Among other measures, the MRTA establishes a funding program and dispensary licensing system aimed at “restructur[ing] opportunities for social equity applicants” (a.k.a. people of color) who want to launch or continue operating cannabis-based businesses in New York State.

However, while the MRTA seems to represent a step in a progressive direction, it’s unclear how this legislation will benefit the communities hurt most by the war on drugs—particularly when small cannabis dispensaries have to compete against multi-million-dollar white-owned cannabis boutique monopolies funded by Silicon Valley venture capital firms, and the cost of simply setting up a legal cultivation facility—let alone navigating the red tape of licensing—can run upwards of $1 million before a dispensary gets to pocket a single cent.

“To see how lucrative the industry has become and who’s profiting from these legalization changes, versus who is still suffering because of the history behind, it is very frustrating,” says Edgar Cruz—one of the first participants in Long Beach, California’s cannabis equity program, which was designed to support cannabis-based businesses whose founders’ income was at least 80 percent below area median. Of the 93 participants who’ve made it through Long Beach’s program since 2018, Cruz says, only one has actually received a license.

Long Beach isn’t unique in this regard. A 2019 survey in Massachusetts, for example, found that only 1.2 percent of the state’s cannabis businesses were minority-owned, despite a strong statewide push for social equity. Not a single one of Illinois’s 89 dispensaries is minority-owned as of June 2022. And even in New York, the MRTA’s birthplace, Black and Latinx cannabis entrepreneurs are still less likely to be approved for funding than white business owners.

Today, people of color represent a mere 5.7 percent of cannabis entrepreneurs nationwide. What’s more, only seven percent of top executives at America’s 14 top cannabis companies are Black—which means most of the industry’s $32 billion in market capital still remains inaccessible to people of color.

“[Social equity in the cannabis sector] was supposed to have a positive impact on people of color, but we have not yet seen that,” says Kimberly Hollingsworth, president of Chicago’s Olive-Harvey community college, which specializes in training students to work in the cannabis industry. 

However, some see signs of hope on the horizon. “I think [Black cannabis business ownership] is an opportunity to build intergenerational wealth,” says Michael Malcolm, a Black realtor and cannabis consultant. 

But to get there, we’re going to have to acknowledge that inequality is systemic—which means effective solutions will have to be, too. Where should we start? Here are five recommendations.

Five steps toward fixing the problem:

  1. Release Black and Latinx Americans arrested on nonviolent cannabis charges, and automatically expunge all criminal records related to those charges.

  2. Enfranchise entrepreneurs of color with state-level licensing and funding programs that support and protect their legal cannabis businesses.

  3. Establish scholarships and mentorship programs for Black and Latinx Americans who work to earn MBAs and become executive leaders in the legal cannabis space.

  4. Implement “blind” recruiting practices at the executive level of cannabis companies, giving Black and Latinx applicants a fair shot at C-suite positions.

  5. Inform consumers about cannabis brands owned and operated by Black and Latinx Americans, and encourage them to make equitable purchase decisions.

Ben Thomas is a journalist and novelist who's lived in 40+ countries. He runs the publishing company House Blackwood, and produces the podcast Horrifying Tales of Wonder! Follow him on Twitter at @writingben.

These statements have not been evaluated by the Food and Drug Administration. Products are not intended to diagnose, treat, cure, or prevent any disease.
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