A billion-dollar industry, a racist legacy: being black and growing pot in America

What does it take to succeed as a young black entrepreneur in a sector largely dominated by white men seen as daring trailblazers?

by Rose Hackman

Three years ago, Jesce Horton, a former engineer in his early 30s, quit his corporate job to set up his own small, family-owned cannabis cultivation business in Portland, Oregon.

Horton is part of a nascent industry that netted $6.7bn last year and is projected to reach $50bn by 2026. And as one of the few black business owners in an industry whose legality varies by location, he stands out.

“I guess how I dress is hip-hop hipster. I have my Jordans, but I also have my beard and a Portland hat,” Horton says with a chuckle when asked to describe himself.

Horton’s parents were at first lukewarm about his plan to sell a substance associated with decades of systematic imprisonment that have devastated communities of color. But the young entrepreneur sees the partial legalization of cannabis as an opportunity not just for business, but to acknowledge past wrongdoing and seek economic justice.

There is an obvious chasm between the number of people of color who have been jailed for simple possession during the “war on drugs” and the number of white men who are starting to make millions in profit from the industry. Formal statistics do not exist, but first-hand accounts and reports confirm that cannabis entrepreneurs are overwhelmingly white. Last year, an investigation by Buzzfeed estimated that less than 1% of cannabis dispensary owners across the country were black.

Solutions are now being explored through reparations – mainly in the form of measures addressing this imbalance.

For the first time, policy and local pieces of concrete legislation in cities including Oakland, California, and Portland, Oregon, encourage participation in the regulated marijuana industry by communities of color, or reinvestment into these communities.

These quiet, small steps towards justice are nothing short of revolutionary.

A white man’s industry: $710,000 for a license

Horton is proud to live in Portland, he says, for it is the first US city to vote to dedicate a portion of its recreational cannabis tax revenue towards investment into “communities disproportionately impacted by cannabis prohibition”. 

 

Beyond investing in businesses and training, the fund will also partly finance the expungement of cannabis convictions.

Such policies, reparative in ambition and nature, recognize that the current playing field was historically set up to be inequitable. Cannabis culture may be open in ethos, but so far, with few exceptions, the industry has proven itself glacier white.

Horton and fellow advocates offer three reasons for this.

One, most states have barred anyone with a criminal record from entering the industry. The US is home to an estimated 70 million Americans with criminal records, and a disproportionate number of those are men of color (according to a Pew Research Center study in 2013, black men were six times more likely to be incarcerated than white men).

Two, by varying degrees, depending on the state, the economic barriers to entering the industry (application fees, license fees and startup fees) are extortionately high.

In Pennsylvania, for instance, where medical cannabis was legalized last year, only a small handful of licenses were set to be given out. Wannabe growers were required to pay a $10,000 non-refundable application fee, together with a $200,000 deposit. They also had to provie proof of $2m in funding, with at least $500,000 in the bank.

(Oregon, where Horton lives, is an outlier. Barriers of entry there are low, with number of licenses granted limitless, application fees at $250, and yearly licenses never exceeding the $6,000 mark.)
Banks, still jumpy from federal prohibition, are not lending. Application numbers are also vastly restrictive and rely on opaque selection processes, in which connections are important. This means applicants with personal wealth or access to networks of wealth are at a high advantage. In a still segregated America, the median American white family is 13 times wealthier than the median black family, and 10 times wealthier than the median Hispanic family.

Three, even where there are funds to be sourced, communities of color are often loath to take a chance on openly doing business with a drug they have seen too many of their kin targeted, criminalized and locked up over.

“Unless measures are taken to recognize and reconcile the harm done by the war on drugs, unless we reach out to communities of color to include them, communities will see legal cannabis as a slap in the face and won’t use it,” Horton says.

To change that, Horton spends a large portion of his time trying to uplift current and would-be cannabis entrepreneurs of color. He does this through a Minority Cannabis Business Association, which he heads, and by advocating for laws that get to the roots of why communities of color have been excluded from the industry.

A place for every color, race and creed

Legacy weighs heavily on Horton, and not simply because he just welcomed his first child.

Horton’s father was sent to prison as a young man on cannabis-related charges. After serving his sentence, he found work as a janitor at a large corporation, where he slowly worked his way up through the ranks, retiring as a vice-president.

Horton was himself also arrested and charged for minor cannabis possession three times, but he says he lucked out. “I was able to get out of the criminal justice system with little,” he says. Friends were less fortunate, and some of them are still behind bars because of the drug.

Eventually, seeing his seriousness, Horton’s parents came around to his business plan. Part of the seed money came from his parents and their fellow retired friends.
Horton’s medical cannabis company originally served eight patients, selling off the rest of his modest crop to dispensaries. He is now preparing to launch a much larger all-purpose facility, which will grow, sell and provide space to safely consume weed on a three-acre piece of property, formerly an auto wrecking ground.

“It’s been family from the start. My mom and my dad even came and helped with the first harvest.”

For years, Horton’s two full-time employees were his cousin, who moved from North Carolina to work with him, and a woman named Linda. She serendipitously landed with the company after she lost her job. She’s in her 60s, and the only white person of the trio. She has recently been diagnosed with cancer, so Horton has set to work trying to develop a cannabis strand to help her deal with the illness.

“We are a bit like the Brady bunch,” Horton offers. “It’s the best of cannabis culture. The idea that there is a place for every single color, race, creed. At this point, I don’t have a lot, but I am passionate. I feel like I have a short window of opportunity to put my son in a better position, build a better position for my family and my community – for people of color.”

Horton doesn’t want to be the exception to the rule, either. It doesn’t seem right, and it doesn’t seem fair, especially since the depiction of cannabis and the depiction of race have been intertwined from the get-go.

For instance, the original federal document outlawing cannabis in 1937 employed “marihuana”, a Hispanic slang term, that until then was not the most common term for the plant. Accounts have suggested it was chosen to make the drug instantly associable with Mexicans, or non-white people.

While studies have shown that cannabis consumption is similar in terms of percentage across races, black and brown people are far more likely to be arrested for both distribution and simple possession of the drug in the US – about four times on average nationwide.

After successive presidents embraced a “war on drugs” starting in the 1970s, portraying drugs, including cannabis, as the root of evil, the prison population ballooned at an astonishing rate. Today, with 2.3 million people locked up domestically, the US is the world’s largest incarcerator.

In an in-depth analysis on the subject, the American Civil Liberties Union (ACLU) found that over the course of the first decade of the 21st century, even as cannabis legalization was beginning to take hold, cannabis arrests increased, rather than the opposite. The study recorded 8m marijuana arrests across the country, 88% of which were for possession alone.

‘This is a moment in time that we may never see again’

Oakland, California, has offered perhaps the most groundbreaking laws to date addressing the issue.
A recent city-commissioned report spoke in stark and harsh terms of, on one hand, the existence of mostly white medical cannabis businesses, and on the other a cracking down on black and brown community members for cannabis possession and distribution.

Oakland is about one-third black, one-third white and one-third Hispanic, but cannabis-related arrests in Oakland in 2015 involved black people in 77% of cases, and people of color in about 95% of cases.

White people represented 4% of cases.

At the end of March this year, following the release of the report, Oakland’s city council voted on a set of regulatory measures for medical cannabis dispensaries in what is referred to as an equity permit program.

Its scope, ambition and framing are unprecedented.
Under new rules, at least half of new cannabis business permit holders, issued by the city at a maximum rate of eight a year, will have to go to “equity applicants”. Applicants must earn less than 80% of the city’s median income; and they must either have been residents of police beats disproportionately targeted by law enforcement in recent decades, or they must have been sent to prison on cannabis charges within the last 20 years.
“Non-equity” applicants not fitting this criteria will be given priority for the other half of permits available if they incorporate helping equity applicants with free rent or real estate.

“Honestly, I think this is a moment in time that we may never see again,” Oakland’s vice-mayor, Annie Campbell Washington, said during a council meeting. “We have the ability to right the wrongs of structural racism so directly and try to level the playing field and benefit the actual group of people who were harmed.”

To the north, Portland, Oregon, is the first city to direct part of its cannabis revenue taxes towards reinvestment into communities of color. Los Angeles and San Francisco are seeking to implement similar policies.

Massachusetts, which voted to make cannabis legal for recreational use at the end of last year, is the first state to include a section of the law which requires the participation of communities criminalized and economically crippled during the “war on drugs”.

While details are still being smoothed out, the text of the law is extraordinary in that it creates a link between a formerly criminalized population and the new industry. There is no formal apology or admission of wrongdoing, but it is not a stretch to see the wording as a recognition of people being owed something, and between the lines, the need for repair.

Massachusetts is also the first state not to bar former convicted felons from operating in and around the industry.

Meanwhile, California’s new adult use law, which also passed last November, requires a portion of the taxes collected from cannabis businesses to be re-invested into “communities disproportionately affected by past federal and state drug policies.”

Much of this may seem utopian, or at least unrealistic. Steps for reparations, which, in the American context, most often refer to a call to pay damage to the descendants of slaves violently brought from Africa for the purpose of multi-generational labor exploitation, have repeatedly gone nowhere.

But these measures could mark the first time an explicit form of reparations takes hold in this country.

Jeff Sessions: ‘Good people don’t smoke marijuana’

Of course, at a federal level, cannabis remains illegal. In fact, it is classified as a Schedule I drug, which means the federal government sees the drug as having no medical benefit whatsoever. This marks it as more dangerous than Schedule II drugs, which include opioids, meth, and cocaine, among others.

Starting in 2013, under Barack Obama, a “Cole memo” unofficially agreed to exercise discretion and turn a blind eye on in-state legal cannabis activities, so long as those states enforced “strong and effective” regulation.

But Donald Trump’s attorney general, Jeff Sessions, has called for renewed efforts in combatting drugs, which he has described uniformly as “bad”. In 1996, the Alabama Lawyer reported that Sessions, then Alabama attorney general, had introduced a package of crime bills for the state to “fix a broken system”. One of those bills sought to impose the death penalty as a mandatory minimum sentence for second time offenders of the state’s anti-drug trafficking law. Trafficking charges included non-violent cannabis charges.

The crime bill did not pass, and at his federal confirmation hearings this January, Sessions said that such measures were “not his view today”. But as recently as last year, Sessions was emphatic that he believed cannabis was “dangerous” and “damaging”, repeatedly calling during a Senate hearing on the matter for federal law to be enforced.

“Good people don’t smoke marijuana,” he said.

This could prove worrying for cannabis entrepreneurs but even more so for communities of color, for whom the business of cannabis has never ceased to be equated with the risk of imprisonment.

Ezekiel Edwards, the director of the Criminal Law Reform Project at the ACLU, warns Sessions is “a drug warrior of the first order”. He says Sessions would not be reviving a war on drugs, only re-escalating one that never went away.

“Even after marijuana legalization, we continue to fight a drug war in communities of color. Arrests are still being done, including in states where legalization has taken place, and still disproportionately in communities of color. That war is not over,” Edwards says.

Lynne Lyman, the state director for the California branch of the Drug Policy Alliance, who helped successfully get recreational cannabis legalized duringNovember’s elections, says that a large part of her work is what she calls “anti-stigma work”.

Anti-stigma work involves making people who use and sell drugs be seen as people first.

For cannabis entrepreneurs, this means no longer treating black sellers of cannabis as dangerous “dealers” to be incarcerated, and white sellers of cannabis as exciting, legitimate trailblazers, with the laudable American flair for risk.

Confronting that stigma takes you to the core of it all.

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