Cannabis Is Black Business Opportunity

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.

(Reprinted from CulturalGrassroots.com 7/2016)

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.

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*List of industries represented at the Cannabis trade show: Accounting & Insurance Services, Advertising & Marketing Agencies, Banking & Payment Processing Services, Botanicals, Containers, Bottles, & Packaging, Dispensing & Vending Machines, Displays & Fixtures, Grow Lights, Hemp Products, Hydroponics & Cultivation Products, Infused Edibles & Beverages, Inventory Tracking, Lawyers & Legal Resources, Licensing Services, Medical Resources, Paraphernalia (Head Shop & Smoke Shop Goods), POS & Management Software, Private Equity & Investment Resources, Professional Training & Education, Security Services & Equipment, Seed Banks, Testing & Lab Services, Tinctures Tonics & Topicals, Vaporizers.

Black Church to the Rescue?

The new civil rights movement for Black people is the Self Sufficiency Movement. Will the Black Church once again provide the primary leadership in this new civil rights struggle?

I've got to say, I am a little uncomfortable with the idea that an institution whose main purpose and reason for being is to pray and "serve God", would be the focal point for Black economic survival. But that does seem to be the case. The Black Church, once again, is coming to the rescue of the general Black public.

We all know about the church's role in the civil rights movement, and in providing a place of solace and activism during the long march out of slavery. But now, in contemporary America, when so many of us are skeptical about the role of religion in civic life, and who bristle at the thought of an institutional interloper in our spiritual space, is this a model that can do justice to the church and our social survival simultaneously? What about all of the charlatans that gravitate to the church for the purpose of making a living? And what about all of those zealots whose every other phrase is "praise God"? Are we giving them too much power over our secular selves?

These are some of the conundrums that are part and parcel of a movement that depends on the institution of God as its primary impetus. But the evidence doesn't' lie. The Black church remains the only example of Black people working together in large numbers to achieve broad social progress.

Over the last 20 years or so, Black churches of any significant size have built an economic development operation. These ECD's are involved in everything from housing and credit unions to owning supermarkets. If you are a Black person with a penchant for self-sufficiency, these ECD's are pretty much the only game in town with regard to being employed by Black people, working on a Black agenda. That's the good news. The bad news is that these organizations can't employ nearly enough of the Black talent that is ready, willing and able to devote itself to the cause of Black self-sufficiency, or can they?

Another concern I have has to do with where these ECD's get their money. Many of these organizations are getting money from the government, and private corporations run by the usual White suspects. Naturally, there is a price to pay in terms of how far they can go in representing the true interest of Black people when their money is coming from White folks with their own agenda. However, from what I can tell, there seems to be a number of progressive Black congregations and ministers out there that really do understand the survival challenge that Black communities face across the nation, and they are stepping up to provide jobs and opportunities for Black people in response.

It is worth mentioning a few of the efforts that, in my mind, deserve to be highlighted because they are charting their own course and using their own money and talent to get there. In Meridan, Mississippi, Bishop Luke Edwards started off with a small group of members who were all on welfare. By pooling their food stamps they were able to start selling groceries out of the basement of their church. Eventually, they elevated their game and opened more than one restaurant, a bakery, an auto repair shop, a cattle farm and a plant to process the meat. Now that's a vertically integrated business infrastructure!

And then there are people like Rev. Gerald Austin, Sr., of Birmingham, Alabama, who founded the nonprofit ECD, Center for Urban Missions, and is involved in an annual conference called the A.G. Gaston Conference, where the specific discussion is about the Black Church's role in economic development of Black communities. This year's speaker was one of my homeboys, Rev. Floyd Flake of Queens, NY, where he has built a formidable economic infrastructure that employs, houses and develops Black human capital. Rev. Austin published a 12 page report for this year's conference, in it he goes right to the heart of the challenge: "the black community faces a new struggle just as daunting as the civil rights struggle - community and economic revitalization," and he challenges the Black church to step up and meet the challenge head on.

Considering the fact that there are so many churches, from storefronts to grand cathedral-like structures, in Black communities all over this country, I can see an opportunity for churches to extend their type of self-sufficiency into businesses that can provide the foundation for more advanced 21st century type opportunity to the cash starved entrepreneurial class of Black folks. I can tell you from my 20 years of experience as an entrepreneur focused on Black self-sufficiency, that there are a lot of Black folks out here with ideas, skills and in-the-trenches experience competing in the mainstream. We all eventually run up against the same brick wall that stands in the way of our ability to build substantial businesses in the 21st century economy (see my article "Managed Mobility" for stats on the pervasive insolvency of Black businesses): capital with a vision for Black power.

The information/entertainment business is a good example. People that invest in companies like New Line Cinema, and now Lions Gate Entertainment, two companies with a history of producing coon comedies and urban malaise movies, are simply not interested in a Black media company that is focused on "three-dimensional images and stories from the African Diaspora" (the motto of KJM3 Entertainment Group, a Black film distribution company involved in Black film classics like, Daughters of the Dust, Sankofa, The Man By The Shore). Wall Street doesn't have a vision for creating a Black business infrastructure that can provide financing, employment and prosperity for the Black community. In fact, they see such efforts as competition for the power to ascribe value to our goods, services and ideas, which they understand is the kind of influence that could change the whole power dynamic in America and the world. The White investor class is simply not interested in relinquishing that kind of power.

Another Achilles heal in church based development is their tax exempt status. When you talk about changing the power dynamic, you must consider that for every action, there is a reaction. How will Uncle Sam respond to a Black business infrastructure anchored by tax free religious institutions? Well, we are already starting to see some push back by the government in its interest in the finances of the mega churches. Creflo Dollar (a Black minister named "Dollar", LOL), along with a number of big White churches have received supeonas from a congressional committee interested in all that money and influence. Remember Marcus Garvey? They finally got to him on a trumped up mail fraud charge. Can you imagine how hard they will come at a tax-exempt, vertically integrated Black business infrastructure capable of disseminating a parallel narrative that can compete with the New York Times and CBS for the hearts and minds of between 40 and 400 million people camped out in major cities around the country and the world (I've been to Africa where they were so thirsty for Black images they sucked up BET like it was water in the desert)?

In some ways, it all seems like a set up. Why is it that all of this economic activity is being led by institutions that regularly deal in the ephemeral? Sometime ago I came across a document purporting to be a National Security Council memo to Richard Nixon. It talked about the rising radicalism in the Black community and ways in which to blunt the efficacy of the radicals' message. One of the suggestions was to sow division in the Black community by appealing to the business-minded Black people with government contracts to help them get started in business.

The idea was that these people represented the best and brightest and could be separated from the lumpen mediocrity with opportunities to build their own wealth. A classic divide and conquer strategy. One very similar to the colonial strategy of identifying a minority ethnic group within a larger society, prop them up with education and privileges not available to the majority, and then let them fight amongst each other over a vision for the future. Naturally, the favored group needed the colonialist's power and weapons to continue to enjoy their artificial advantage over the majority, thereby creating the "massa, our house is burning" symbiotic relationship that Malcolm X talked about. Is there some element of a colonial set-up in the availability of capital and opportunity to all of these individual religious institutions? Does the parochial nature of each individual church prevent them from having broader efficacy? Will a competition for available resources stymie the movement for self-sufficiency and prosperity as it builds momentum? Will secular resentment make it impossible for these ECD's to get beyond their own congregations? Only time will tell.

Right now, though, I am absolutely applauding all of these Black church ECD's involved in the mundane and practical upon which the Black masses live. However, in order to guarantee Black participation in the next iteration of human existence, we will still have to find a way to put together the venture capital to support our entrepreneurs that are trying to keep pace with the evolution of society. We have to play in the 21st Century and a sandwich shop is not enough sustenance to keep our best and brightest minds focused on our future.
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