In order to help get more black entrepreneurs into the cannabis industry – Jay Z has launched a fund worth $10 million dollars to invest in minority cannabis businesses. He recently was interviewed on the Wall Street Journal where he said;
“We were the ones most negatively affected by the war on drugs, and America has turned around and created a business from it that’s worth billions.”
The fund comes from the merger of two California cannabis firms “Left Coast Ventures” and CMG Partners. The “Parent Company” as they call it, will begin to create “Social Equity Ventures” with an initial fund of $10,000,000 with 2% of the company’s net income dedicated to the fund every year.
“I wanted to do something in a real, concrete way, where I do my part,” he reportedly added.
While this is a brilliant move for the rapper turned business mogul, it still doesn’t really address the issue of “minority owned businesses”.
As it turns out, the very lucrative cannabis marketplace is predominantly owned by white business owners whereas only 4.3% of the market share goes to African Americans.
The question we need to be asking ourselves is – will $10,000,000 make a dent in the $20b per year industry?
If we’re talking about opening up cannabis related businesses in California – the state will probably gobble up a large portion of that fund. More importantly – the “minority business owners” will be most likely friends or acquaintances of Jay-Z (I know his name is Sean Carter). At the very least, they will be closer to the stratosphere of Jay-Z, meaning that those who were “truly affected” by the war on drugs – will still not be able to participate in the marketplace.
But how do we remedy this?
Lowering the bar
Why is it that only rich, wealthy, white males can afford to get into the cannabis game? Simple – it costs a metric fuck-ton to enter into the game. The government wants their cut and so, they increase the costs of operation, increase taxation, make more regulatory processes – and the next thing you know you’re spending hundreds of thousands of dollars, or in some cases millions – to get a license.
Now let me ask you this – how many people from the South-Side or the Bronx has a million dollars just sitting around?
This means that no matter the funds you raise – you’ll never address the real issue that minorities face – accessibility.
I have proposed before a phenomenal solution of creating a 2-tier licensing system where it will only cost you $1,000 per year to have a small “Craft license” that will give you a permission to grow and sell up to the tune of $1,000,000 per year in net earnings.
Beyond this point, you’d need to upgrade to a commercial license which would have more regulations in place. Of course, this is only the most basic of ideas and there would be a lot of kinks to work out – but the only way to truly address the negative impact of the drug war is to lower the point of entry to match the economy of the most effective.
Unless you do this – cannabis will always be a game for those who have money, while the “negatively affected community” continues to use the product but not getting benefit from the industry.
Advocating for Equality
I applaud Jay-Z for pumping money into his community. If you’re killing it, it’s only fair to help others who supported your music and helped you reach your height. This is not detracting from Jay-Z’s personal work ethic. That dude is on another level of thinking and I think people need to recognize that he built his empire using his talent and vision.
Now that he’s “made it” – creating opportunities for others is the philanthropic thing to do.
However – if he truly wants to make a change, then he should start an organization that advocates for Craft licensing schemes where any person can start with a minimal investment and minimal government oversight.
Establish the craft marketplace, similar to how you have Farmer’s Markets – but for weed, where those who do not have millions of dollars at their disposal, can grow and sell weed to help finance their own empowerment.
Investing in one business is a good thing, however, creating the opportunity for millions of others to invest in themselves is far superior in my opinion. We should create a highly competitive marketplace by lowering the point of entry. Once we have done this, independent craft businesses will have the opportunity to provide cheaper weed at higher quality while simultaneously giving minorities access to this industry.
Will this happen? Probably not – if you were to legalize a craft marketplace like I’m suggesting, you’d drive down the price of weed making the “Big Wigs” lose out on money. And the affluent can’t be losing money on honest competition now can they?
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