Marijuana entrepreneurs typify generational shift on $24B industry, but disparities remain

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Twenty-five years after California became a pioneer in the marijuana industry, as the first state in the U.S. to make medical marijuana legal, almost every other state in America has now legalized cannabis either for medical or recreational use. It’s one of the fastest-growing markets in America that’s expected to surpass $24 billion in revenue this year, and eclipse $70 billion by 2028.

Estimates show that as many as 55 million Americans use marijuana regularly and a growing majority of Americans support its legalization on the federal level. In fact, 66% of Americans believe cannabis should be legal, according to a Gallup poll from October 2019, a dramatic shift from decades prior. By comparison, just 12% of Americans supported legalization in 1969, according to Gallup.

The numbers reveal a once gaping generational divide is closing as stigmatization of the drug slowly becomes undone with an increase in education. Research has shown marijuana can help relieve a number of ailments from chronic pain to depression, while health risks include mental health problems and respiratory disease.

Kika Keith and her daughter, Kika Howze, owners of Gorilla Rx, the only Black woman-owned dispensary in Los Angeles, represent two generations of marijuana entrepreneurs aligned on the benefits of the plant. After opening their shop this year in the Crenshaw neighborhood, the duo credits intrinsic generational values for the shop’s early success.

“We come from a very strong-rooted family … [and marijuana] was something that was a part of our family for so many generations and brought healing,” Howze told Yahoo Finance. “And that’s what we hope to be able to do for our community.”

“To be able to educate others not just based off of what we know from smoking the plant, but also what the topical wellness benefits for pain medication are … really takes us back to where the plant came from as a healing source,” she said.

Though cannabis has been used to treat ailments for at least 3,000 years, federal agencies like the Food and Drug Administration have been resistant to classify marijuana as safe or effective in treating any medical condition. However, the FDA does “recognize the potential opportunities that cannabis or cannabis-derived compounds may offer.”

Former NBA star Al Harrington, CEO of his own cannabis company Viola, knows the healing power of marijuana well. He credits it for helping subside many of the ailments his grandmother had, including glaucoma, more than 10 years ago.

“It took me two days to convince her, but when she finally tried it, she experienced instant relief,” Harrington told Yahoo Finance. “The first thing she did was she went downstairs, and she read her Bible. I actually walked in on her reading the Bible, and she was crying. She said that was the first time she had read the words in the Bible in over three years.”

Black representation in the industry

It’s stories like this, and others like Mike Tyson saying he wished he smoked marijuana his entire career, that have increased the popularity of cannabis nationwide. But just as fast as the industry has grown, disparities have also emerged. People of color account for less than a fifth of owners or stakeholders at marijuana companies, according to a 2017 survey. And Black people occupied less than 5% of leadership roles in the industry.

Dozens of marijuana dispensaries (stores) have opened along the Highway 50 lakeshore drive since the legalization of recreation cannabis was passed by voters in 2016 as viewed on October 17, 2021, in South Lake Tahoe, California. The state of California raised $817 million in tax revenues on cannabis last year and is expected to surpass $1 billion this year. (Photo by George Rose/Getty Images)

For critics, the disparities are emblematic of a continuous cycle of people of color being left out of profits on something they were once historically criminalized for.

“We were pioneers in these spaces,” Harrington told Yahoo News earlier this year. “And when you look at us today in 2021, we don’t have any representation. We have no ownership. So with cannabis, I feel like Black people that have found success in this space, we have to continue to speak on this. We cannot expect that they’re just going to do the right thing because they haven’t done the right thing historically.”

Black people have also been overcriminalized for marijuana dating back to the early 1900s, and arrests ramped up in the 1960s under President Nixon as part of the War on Drugs. Despite the same usage rates, Black people are nearly four times as likely to be arrested for marijuana than white people, according to the American Civil Liberties Union (ACLU). Today more than half of all drug-related arrests are attributed to marijuana.

It’s a troubling trend that Harrington hopes he can help course-correct with his marijuana brand. He’s advocated for more opportunities and resources on behalf of marginalized groups with politicians, including Senate Majority Leader Chuck Schumer (D., N.Y.) and Sen. Cory Booker (D., N.J.), who have lent their support. But there’s still mounting opposition in Congress.

A customer receives information about cannabis as she buys THC leaves at the Weed World store on March 31, 2021, in Midtown New York. - New York Governor Andrew Cuomo signed legislation legalizing recreational marijuana on March 31. 2021, with a large chunk of tax revenues from sales set to go to minority communities. New York joins 14 other US states and the District of Columbia in permitting cannabis after lawmakers in both state chambers, where Cuomo's Democratic Party holds strong majorities, backed the bill on March 30. (Photo by Kena Betancur / AFP) (Photo by KENA BETANCUR/AFP via Getty Images)

A customer receives information about cannabis as she buys THC leaves at the Weed World store on March 31, 2021, in Midtown New York. New York Governor Andrew Cuomo signed legislation legalizing recreational marijuana on March 31. 2021. (Photo by KENA BETANCUR/AFP via Getty Images)

“The War on Drugs has been a war on people — particularly people of color,” Schumer, Booker and Sen. Ron Wyden (D., Ore.) said in a joint statement earlier this year. “Ending the federal marijuana prohibition is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country.”

Viola, named after Harrington’s grandmother, is currently in six states and expects to be in nine by the end of 2022. But even with his access to capital after a 16-year NBA career, Harrington understands how challenging it is to break into the space.

“This industry has been founded on our backs,” he said. “And we just feel like 3% is not the proper representation for our people.”

‘Education is the key’

Keith believes education is a major part of leveling the playing field. She was able to open up Gorilla Rx thanks, in large part, to LA’s Social Equity Program, which promised to provide a more equitable ownership in the space.

But once she started going through the program in 2017, Keith quickly found various obstacles. She pushed back on many of the requirements and still, the slow rollout meant she’d have to pay monthly rent of $12,000 on a space that was left vacant for three years while she acquired a license. So Keith turned the space into a classroom.

“Education is the key,” she said. “We really have to look at both access to capital and education to properly prepare us to run a compliant business.”

Marquise Francis is a national reporter and producer with Yahoo News.

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