(This story appears in the March issue of Marijuana Business Magazine.)
Marijuana companies face mounting pressure from advocates, consumers and regulators to address the lack of diversity within the cannabis industry.
In response, some companies have launched their own programs aimed at providing women and people of color with more opportunities to succeed in the space.
These efforts range from mentorship programs spanning many months to multimillion-dollar funds that support nonprofits and community organizations.
The team at Curio Wellness, for instance, established a $30 million fund in December to provide startup capital for minority business owners.
The Timonium, Maryland-based medical marijuana company intends to assist women, minorities and disabled veterans in opening franchises linked to Curio Wellness.
“Diversity is a challenge,” said Jerel Registre, managing director of the Curio WMBE Fund, adding that a lack of diversity prevents cannabis supporters “from coming together under one banner.”
In recent years, social equity measures have become a prerequisite in many states writing cannabis legislation for new markets. New York Gov. Andrew Cuomo and state legislators, for example, have failed to launch a recreational market partly because of a lack of agreement on such factors.
In Washington DC, members of the Congressional Black Caucus tacked on social equity measures to the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which passed the U.S. House of Representatives in December.
“Coming up with a solution that either serves as a blueprint or as one of many solutions to the diversity challenges in the industry enables (it) to move forward,” Registre said.
Social Equity Funds
Curio’s part of the solution is to invest in diverse entrepreneurs who would like to open their own dispensaries. The team looks to sponsor entrepreneurs in states with medical cannabis frameworks that include a limited number of available licenses.
“We would provide financing toward the initial capitalization, so that would include the store build-out, the licensing, the initial inventory and the working capital they need as they ramp the store up over the first few months to get revenue flowing,” Registre told Marijuana Business Magazine in December.
In exchange for the upfront capital, the fund initially takes a 40% equity stake in the new dispensary. As the business matures, the entrepreneur buys back that stake, Registre said. The entrepreneurs could become full owners of their franchises in as little as three years.
Hawthorne Gardening Co., a division of Scotts Miracle-Gro, disclosed in late 2020 that the company started a $2.5 million fund to benefit nonprofits with cannabis social justice missions.
The Hawthorne Social Justice Fund will focus on organizations with pro-bono programs that help individuals impacted by cannabis prohibition receive clemency or reentry assistance. The fund also will be used to help groups…
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