Activists, Black-owned weed businesses say N.J. can do more to ensure social equity
Entrepreneur Moses Sutton owns Moe Weed, a small CBD shop in South Trenton, which he hopes to transition into a licensed shop that sells THC products. Moe Weed also engages in community activism by hosting workshops about expungement and by organizing food donations, he said.
Sutton believes there is stigma around people of color selling weed. On top of that, he said he initially struggled to find resources about obtaining a license from the state and creating a sustainable cannabis company.
High cost
Cost is also a significant barrier to entry for people who want to open businesses but live in economically disadvantaged cities, like Trenton. Sutton claimed that acquiring real estate to operate a cannabis company can easily cost hundreds of thousands of dollars — or millions depending on the location.
It’s why he believes New Jersey should invest in grants to help fund business owners who lack the capital. Earlier this year, New York announced a $200 million equity fund to help jumpstart its fledgling cannabis industry.
“Corporations have the money. The small business owners don’t have the money … To be fair and have a true equitable market, I’m pretty sure, if the state has the funding laying around somewhere, even if it’s a small amount they can give out, I believe that will give a person like myself and other small business owners more of a leg up,” Sutton said.
Bryant would also like to see the state invest in a fund for minority-owned cannabis businesses.
“That’s real equity,” Bryant said. “It’s not just throwing down around this buzzword.”
Last week, after the state approved medical facilities, or alternative treatment centers (as the state calls them), to begin selling weed on the adult-use market, Sutton said the move gave larger entities, many of which operate on a national level, an unfair advantage over small New Jersey business owners.
“I believe they should have had everyone start at the same time selling recreational, and that’s my personal opinion,” Sutton said.
Backdoor deals
Jelani Gibson is a cannabis reporter and content lead at NJ Advance Media’s “NJ Cannabis Insider.”
He has reported on social equity- and diversity-related issues in New Jersey’s cannabis space over the last year.
“One of the hardest things about reporting on this space is that many of the knowledgeable advocates are also the same people who are applying for licenses,” Gibson said. “And as a result, the things of concern that you hear as a reporter are very hard to get on record with full identification. Because many of those people are essentially afraid of state and municipal-level retaliation.”
Gibson said unnamed sources have alerted him to “backdoor deals that happen at municipalities,” and that he has heard criticism directed at lawmakers, the Cannabis Regulatory Commission, and the governor.
“A lot of people that I have run into are afraid to criticize those levels of government,” Gibson said. “And, so even if there is no retaliation going on, the implied sense of fear, the perception of fear, and retaliation is essentially driving what has the potential to be a non-consensual oath of silence on many of the issues that are happening.”
He said the issue of ensuring social equity does not “exclusively reside” with the Cannabis Regulatory Commission.
“It also resides with how the municipalities do business, with how the legislators do business, and support from the governor’s office,” Gibson said.
He said he has also reported on high costs associated with entering the industry, and in many places where local cannabis businesses said they need to hire lobbyists to help gain municipal access.
“When you are dealing with a business that usually requires the services of a lobbyist in order for you to get started in the business, it’s usually a rather clear indication that you are not dealing with an entry level business in terms of revenue and capital,” Gibson said.
“Many people can make a business with $250,000 to $1 million. Well, in the cannabis space, for many people, that just might be a downpayment. We’re not even talking about construction costs, payroll, and all of the other things that come with running a business,” he continued.
And then there are concerns about what to do with the black market, or the “legacy” market, as some business owners and activists have rebranded the term.
‘Legacy’ market
Some advocates said doing more for social equity would allow street dealers and vendors operating in the gray area to get a foot in the door, even if they still think the legacy market will always be around.
“The black market is still going to persist,” said John Harmon, president of the African American Chamber of Commerce New Jersey. “So the challenge is, how do you reduce that so more people can be a part of the ecosystem where taxes are paid, where it’s regulated, and there’s accountability.”
At the same time, Bryant said getting more people to transition to the adult-use market may prove to be challenging because ideology about the process varies.
“A lot of people on the legacy side, have a stigma against the legal industry, stigma against paying taxes on products that they have already, thinking that it’s a trap,” Bryant said. “A lot of people feel as though this is going to be what lands them in trouble.”
According to Newsweek, states that legalized cannabis brought in more than $2.7 billion in tax revenue in 2020.
Harmon said that looks promising for New Jersey and that he hopes communities of color will also benefit from the state’s newest industry.
“New Jersey is a high taxation state already and this might enable municipalities to take those resources to reinvest in programming for youth, recreation, and housing. There’s a lot of opportunities for those resources to be leveraged to give people a more qualitative life, particularly in some of the underperforming sectors of our state,” Harmon said.