Diversity in the marijuana industry has emerged as an issue as legalization for medical use has spread to 25 states and the District and recreational sales are permitted in four states. Pictured: A marijuana plant flourishes under grow lights at a warehouse in Denver in October 2010. (Ed Andrieski, Associated Press file)
Are black biz owners missing from the Maryland medical marijuana industry?
Published: • Updated:
By Fenit Nirappil, The Washington Post
Maryland set up its legal medical marijuana industry with hopes of racial diversity and equity in spreading profits, but none of the 15 companies that were cleared last week for potentially lucrative growing licenses is led by African Americans.
Some lawmakers and prospective minority-owned businesses say this is unacceptable in a state where nearly a third of the population is black, the most of any state with a comprehensive legal pot industry. They say the lack of diversity is emblematic of how, across the country, African Americans are disproportionately locked up when marijuana use is criminalized yet are shut out of the profits when drug sales are legalized.
“We are not going to see this industry flourish in the state of Maryland with no minority participation,” said Del. Cheryl D. Glenn (D-Baltimore), chairwoman of the Legislative Black Caucus.
Glenn was a key player in the legalization battle, and the commission that awards medical marijuana business licenses and oversees the industry is named after her mother, Natalie LaPrade, who died of cancer.
She is considering filing a legal injunction to halt the licensing process and is weighing other options, such as pushing the commission to award additional licenses to minority-owned companies.
The law legalizing medical marijuana says regulators should “actively seek to achieve” racial and ethnic diversity in the industry. But the commission did not provide extra weight to applications submitted by minority-owned businesses because a letter from the attorney general’s office suggested that preferences would be unconstitutional without there being a history of racial disparity in marijuana licensing to justify the move.
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A spokeswoman for the Maryland Medical Cannabis Commission said there will be future opportunities to expand minority participation when the agency awards dispensary licenses and when it considers issuing more cultivation licenses in 2018 if supply doesn’t meet demand. Businesses must also submit annual reports on the racial breakdown of their ownership and workforce, providing a more comprehensive look at the industry’s diversity.
“The Commission believes a diverse workforce is in the best interest of the industry,” said Vanessa Lyon, the spokeswoman.
But Glenn and other critics say the state hasn’t done enough to ensure diversity in the blossoming business that’s already worth billions nationwide.
Several black-owned applicants for licenses were not among the 15 that were granted early approval to grow marijuana for medical use, contingent on those companies passing intensive background checks and facility inspections.
The ownership breakdowns of the approved growers is not available, but none of the listed top executives is black. One of the businesses is owned and led by a family of South Asian descent in Frederick County, while women are at the helm of two other ventures.
The commission also gave an additional 15 preliminary licenses to process marijuana into medical products, and at least one went to a company led and owned by a group of black medical professionals in Prince George’s County. But entrepreneurs consider processing less profitable than cultivation.
Among the rejected African American marijuana entrepreneurs is Darryl Hill, who broke a racial barrier as the first black college football player in the South and has been as an advocate for minority advancement in businesses from fine dining to green energy.
For his latest venture, he saw Maryland’s medical marijuana industry as an opportunity to recruit a team of minority business people to help create a more equitable market.
“This is a brand-new industry where 50 years of experience didn’t come into play and your granddaddy didn’t hand it down to you,” said Hill, a 72-year-old Laurel resident. “But this idea of sharing the largesse didn’t really happen.”
The commission did take another kind of diversity into account in awarding growing licenses: It approved two lower-scoring prospective cultivators to ensure that companies were spread out across the state.
“Certainly, if geographic diversity is something that we strive for, we should strive to make sure this industry looks like the state of Maryland in terms of its diversity,” said Darrell Carrington, a lobbyist who leads a trade group and helped the group of African American doctors secure a processing license.
Del. Christopher R. West (R-Baltimore County), who requested the letter from the attorney general’s office that cast doubt on racial preferences in marijuana licensing, said he sees no discrimination because minority-owned companies scored lower based on objective rankings that considered proposed businesses’ security measures, horticultural experiences and plans for regulatory compliance, among other factors.
“We are supposed to do as much as we can to be a colorblind country,” West said. “If there’s no instance of past discrimination, we shouldn’t start discrimination now.”
Diversity in the marijuana industry has emerged as an issue as legalization for medical use has spread to 25 states and the District and recreational sales are permitted in four states. An investigation by BuzzFeed estimates that about 1 percent of the nation’s marijuana dispensaries have black owners.
Ernst Valery, an African American developer in Baltimore, said he saw the lack of diversity in the marijuana industry as he traveled across the country in preparation to put together an application to open a facility in long-struggling West Baltimore.
“We went to Colorado and saw kids who were young, white males making money growing pot,” said Valery, whose company did not receive a preliminary license. “Young black men have gone to jail for this thing. Now that population will have no connection to making money off of it legally.”
Businesses approved by regulators to grow marijuana do have African Americans in roles that are lower-profile.
In Prince George’s, a team led by District liquor store owner Josh Genderson includes two high-profile African Americans: Ismael “Vince” Canales, president of the state Fraternal Order of Police, overseeing security, and Donald E. Wilson, the former dean of the University of Maryland School of Medicine, as a scientific adviser.
Doug DeLeaver, the first African American leader of several state law enforcement agencies, is in charge of security for Curio Cultivation, but no one on the company’s executive team is black. And Annapolis lobbyist Frank Boston III has a minority stake in the company Green Leaf Medical slated to open in Frederick County, while its scientific advisory board is led by a black doctor.
Vicky Ivory-Orem, an African American lawyer and judge in Prince George’s County whose application for a growing license was rejected, says it’s not enough to have black players in the industry but that minorities should be in the forefront as well.
“What I see in this selection process is the rich getting richer, the politically wealthy remaining wealthy,” said Ivory-Orem, referencing winning applications submitted by major campaign donors and politically connected businesses. “There’s just no opportunity for us.”