When Stacy Pope attended her first cannabis entrepreneurship meet-up in Atlanta last September, she didn’t know at all what to expect. “I was surprised that so many other business owners were interested in the industry. That really sparked my curiosity,” says the beauty salon owner.
But her decision to enter the legal cannabis market was solidified just days later when she saw a viral clip featuring the head of the Alaska Cannabis Club (ACC) and KTVA-TV reporter Charlo Greene quit her on-air position—during a live broadcast—to focus on her passion. “I was captivated by it. From that point on, I jumped in,” says Pope.
After months of research, the Atlanta resident is now considering a move to Colorado, where she can not only do hair but also work in a cannabis dispensary to learn more about the field. Obstacles, however, abound: Pope lacks the funds to make a seamless transition, and the stigma against the formerly illegal industry has prevented her family from being supportive. “I’m sad that it’s so difficult, but I believe this is part of my legacy,” she shares. Pope, who wants to have her new business operating by the end of 2015, is motivated to enter the legal marijuana trade while the fire is hot and as a way for her to possibility create intergenerational wealth.
The Money Tree
According to the latest report by marijuana investment and research firm The ArcView Group, legal commerce of the substance in the United States brought in $2.5 billion in 2014. That number is predicted to exceed $10 billion over the next five years as demand increases and new markets open up. As additional states move toward legalization, there is a push for African-Americans to grab a seat at the table in this lucrative trade or risk losing their place in line.
“This is going to take off across the country. For Black people, who have been negatively impacted by its prohibition, it would be wise to figure out how we can benefit from its legalization,” says Art Way, state director of the Drug Policy Alliance in Colorado.
To date, 23 states and the District of Columbia permit the use of medical marijuana. Measures to legalize recreational use have been passed in four states—Alaska, Colorado, Washington and Oregon—and the District of Columbia, according to the Pew Research Center. An additional 14 states have decriminalized small amounts of marijuana possession, some equating the offense to a minor traffic violation for first-timers.
Although laws are changing, Way is not surprised that Pope is having trouble getting into the industry. The cost to set up a dispensary, which varies by state and is said to be in the five- to six-figure range, will be a barrier to access for many. For example, according to the Marijuana Policy Project, in Colorado entrepreneurs need at least $7,500 for application fees for a medical marijuana business and $1,200 for infused product manufacturers and cultivators. And there are other mandatory fees and taxes. Although this may be the prime time to get involved in such enterprises, a strong network and financial resources are necessary to do so.
The Blunt Approach
A far-reaching, integrated support system is exactly what Tiffany Bowden is working to build. The entrepreneur is a co-owner of Comfy Enterprises (hellocomfytree.com), which includes Comfy Hemp, an online dispensary, and Comfy Tree, offering low-cost education and entrepreneurship training on the cannabis industry.
“What we encountered in trying to get involved in the business was surprising. When we reached out to consulting firms to help us determine how to proceed, we were getting quotes for $18,000 a month just for lawyer fees, which is ridiculous,” states Bowden.
Her business partner George McGill says legal fees are just a part of the costs of trying to get a legal marijuana enterprise off the ground. “In general, if you are going to build a cultivation center or a dispensary, you have to find a landlord to accept your business plan, then pay rent without having any revenue coming in for about six to eight months [the amount of time it takes to plant and harvest],” he explains.
The duo says at least $100,000 is needed get started, but even more may actually be required. Consequently, Bowden, who is also the president of the Minority Cannabis Business Association, and her business partners decided to start The Comfy Tree Cannibis Academy. The program offers seminars that start at $149 and are held in major cities across the United States. The training covers everything from costs and compliance to networking and effective marketing.
“We essentially did all the work, then took a boot-strapping approach to this whole thing. We can make the industry accessible. We can help others get involved while financing our pathway,” says Bowden.
Legal marijuana businesses need budtenders (servers at cannabis shops), trimmers, growers, dispensary staff and delivery workers, but this burgeoning field also needs staffers with experience in other professions, including security, administration, advertising and even the culinary arts. Websites such as 420careers.com, THCJobs.com and Ganjaprenuer.com post open listings for marijuana industry jobs.
Rules and Regulations
Start-up funds aside, there are still challenges. State laws have restrictions on who can work in this field. In Colorado, for example, a person who has had an undischarged felony conviction within the past five years can’t work in the industry, and individuals with drug-related felonies over the past 10 years are also banned. For those ready to get involved, understanding state requirements is essential.
Although federal officials have allowed individual states to move ahead with locally run programs that permit cannabis use for medical and recreational purposes, the herb remains illegal under federal law, which had prevented banks and other financial institutions from providing funding. But things are changing. In February 2014, the Obama administration issued guidelines allowing financial institutions to offer business account services to pot distributors operating legally.
According to the Marijuana Policy Project, Rhode Island may be one of the next states to legalize pot, with advocates actively pushing The Marijuana Regulation, Control and Taxation Act. In 2016, at least five more states—Arizona, California, Maine, Massachusetts and Nevada—are expected to vote on similar ballot initiatives.
“People realize that the way we have been dealing with marijuana is not working, and the time for change is now. The thing with this whole green rush is that there are so many business opportunities,” says former reporter Greene, who is also ACC’s president and CEO. This is also a great time for individuals who have grown or sold marijuana illegally to transfer those skills to a legal operation. She also offers some advice for trailblazers: “Don’t take no for an answer; make sure you’ve got a set of brass balls because there are going to be people looking to stop you at every opportunity.”
Business as Usual
Industry experts encourage others to maximize the skills they already have when deciding on what may be the right fit for them in the legal marijuana trade. “You don’t have to reinvent the wheel per se or just assume you’re going to be a grower. If you’re really great at baking cakes, maybe you should consider getting into the edibles business so you can maximize that segment of the trade,” adds McGill.
As the trade develops and becomes more widely accepted, the way that consumers use marijuana will surely change. “You will start to see fewer people smoking marijuana via blunts or joints and see more consumption of it via candies, treats, sodas, nuts and pretzels,” he notes.
Legal marijuana business owners say now is the time for the Black community to act. “No one will have an opportunity like this again in our lifetime,” says Greene. “We should consider this our steel industry, our dot.com bubble, our Westward expansion.”