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C. E. Hutton Team

BARRIERS TO ENTRY IN THE LEGAL MARIJUANA INDUSTRY FOR MEN OF COLOR

There have been and continues to be several articles, blogs, podcasts and other venues speaking to the wealth of opportunity in the legal marijuana industry that is projected to be roughly $40 billion in the year 2020. There have also been articles, blogs, podcasts and industry event discussions about diversity, the need for it and how industry leaders are committed to seeing change in the business entrepreneur landscape particularly with people of color.

While the above is clearly a work in progress, this is against a back drop of significant burden men of color carry. The burden is heavier to lift and can be harder shake off when facing barriers and obstacles such as past criminal records, legalization in states with larger diverse populations, access to the capital and influence necessary to obtain legal cannabis licenses and the big mountain; securing capital to begin and run a successful business.

Criminalization is undoubtedly the Mt. Everest challenge to overcome and setting aside convictions of marijuana offenses are beginning to gain momentum. But the access to capital is the other summit to be ascended and is paramount in the legal marijuana and hemp industry for those seeking entry.

Institutional loans from banks is frequently a non-starter and a select few in the minority community have the assets to act as angel investors for entrepreneurs. If lucky, one can secure angel investors from outside their respective community but can wind up foregoing majority ownership to secure that investment.

Ultimately for men of color trying to eradicate the barriers of entry in the cannabis industry, we must reply on a shrewd strategy of finding the right business partners who bring capital, a shared vision, positive energy and the business acumen to start and stay for the entire journey.

Additionally, we must find the right strategic alliances to help navigate the landscape with expert insights and embracing/executing on good advice. Finally, we must deploy a strategy of helping one another and sharing knowledge without seeking to upend one another.

This is a time where the “crab in the barrel” mentality is simply unacceptable, and that old way of thinking holds everyone hostage in a game where the stakes are high and valuable time is wasted.

We all can play and we all can win.
It is imperative.

C. E. Hutton, President & CEO

References:
https://www.rollingstone.com/culture/culture-news/how-states-can-bring-african-americans-into-the-marijuana-industry-117602/
https://www.nbcnews.com/news/amp/ncna344486

Cannabis’ Leading Ladies

Women have always been a force for equal rights and influential change. As new legal fights come to the forefront, so do the inspirational women waiting right behind to lead the charge. In an article by Leafly, in honor of Women’s History Month, they chose to name the eight women who are helping to pave a brighter future for the legalization of cannabis.

The list below names just a few of the women, from all walks of life, including lawyers and entrepreneurs. Their continued dedication is sure to improve the quality of life for millions of citizens, especially those unnecessarily charged with misdemeanors and felonies for possession.

Diane Goldstein
She dedicated 21 years working as the first female lieutenant for the Redondo Beach Police Department in Southern California. The drug arrests Diane made in her time greatly helped to shape her perspective on the war on drugs, particularly cannabis, especially after an arrest made on a family member. She is an Executive Board Member for Law Enforcement Against Prohibition and regularly writes and speaks on the benefits of cannabis legalization.

Jasmine Hupp
After serving as Director of Digital Media for Women 2.0, which helps women start their own high-growth businesses, she became the founder and CEO of Women Grow. This group was created as a community for women to feel empowered in the cannabis industry. The business has a national leadership summit and local branches in more than 30 cities.

Renee Gagnon
She is the first, and only, transgender woman CEO who created a cannabis company and made it public. Thunderbird Biomedical Inc., was founded in 2013, even before receiving her license under the Marijuana for Medical Purposes Regulations from Health Canada in February 2014. The company was bought out in 2015, after which she began working with Gill Polard, a fellow female cannabis entrepreneur. They co-founded a supply chain known as International Cannabis Centres Inc.

Kate Brown
The Governor of Oregon has been extremely receptive to the positive benefits of cannabis legalization. In addition to supporting it for medical and adult-use, she signed legislation that allows the sale of edibles and that lets banks and credit unions work with cannabis companies without the fear of criminal liability.

Hilary Bricken
An attorney at Harris Bricken, PLLC since 2010, she became an advocate for cannabis legalization in Seattle. She created the firm’s Canna Law Group and is the chair. Hilary was named “Deal Maker of the Year” by Puget Sound Business Journal and “Industry Attorney of the Year” by Dope Magazine.

Julie Netherland, Shawnta Hopkins-Greene, and Melissa Mentele, are among the list that have fought for the push in passing cannabis legislature. They have created companies, run for office, and helped pass policies all in attempt to better the lives of those impacted negatively by the justice system. Their continued efforts are an inspiration to those still trying to add their voice to the cannabis battle. And with the fight far from over, there is plenty of room for more voices!

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A “Green Rush” for Business

The “green rush” has started to flourish as marijuana becomes more legal with each piece of legislation. A problem still remains however; there is an abundance of rules and fees.

Several studies have projected California will reach $6 billion in marijuana sales by 2025. And though the challenges of starting a business aren’t ideal, there are those looking for other avenues to pursue their greener interests.

Mark Hersman and Nick Portolese are just two of the aspiring entrepreneurs looking to break into the industry. Having met at church 10 years ago, their bond over sports has now led them to attempt to build a successful marijuana business in Alameda, California.

The town has reserved certain parts for potential cannabis businesses. Alameda has also enacted legislation that will permit two medical dispensaries. The two men hope to be one of them, and would plan to open it next summer, with the appropriate name, Portman Enterprises.

Mark and Nick have also expressed an interest in opening a cannabis friendly social club with a country club atmosphere and entertainment, where monthly memberships would allow members to enjoy recreational cannabis.
Their reasoning for pursuing this business lies in both Nick’s remembrance of his parent’s suffering with cancer, and Mark’s deduction that those interested in cannabis don’t have a strong grasp on the business side. He states, “They have tremendous experience and technical skills in growing the plant and proper nutrition, fertilization, hydration techniques and that sort of thing…but they don’t know a lot about running a business — meeting payroll, regulation, audits and taxes, etc.”

The trouble for the duo lies in the expenses. Together, the total investment for both businesses is close to $8-$9 million. They have put $100,000 of their own money into research and development alone, and plan on conducting a capital raise and looking for investors. The problem has been shown to be the actual real estate for the business. Landlords are more restrictive on leasing to marijuana businesses and federal banks can pull loans on the building.

Sharon Golden, a business consultant and founder of the Alameda Island Cannabis Community, warns against the belief of getting rich quick. She explains for places like dispensaries, edibles, farms, and testing sites, that licenses and permits are pricey. Taxes are another issue, with 15% sales tax going toward adult use and adding the local 9.25% sales tax, costing the consumer 25% in sales tax.

Yet there’s room in the business for non-selling purposes, which Nate and Krystle Cameron plan on investing in. After opening Them People Productions, that provides safe social spaces for people of color, they now plan on creating events that allow the use of recreational marijuana. The effort comes from the understanding that people of color are more persecuted for their cannabis use. Their strategy is to find a venue, sometimes as a partner for the event, and pay the artists they hire from ticket sales. Krystle states the most they’ve personally spent is $1500.

Hopefully the stigma of marijuana will change to allow cannabis companies to have an easier foot in the door. Until then, those that are already investing are proving to be valuable allies in the fight for federal legalization.

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