Can ‘cannabusiness’ turn deprived communities around?
Minorities have suffered disproportionately from the criminalisation of cannabis; now it’s a booming business, they should be its biggest beneficiaries
London — Having witnessed the fallout from drug and alcohol abuse in his struggling Maori community, Manu Caddie was always “quite anti-cannabis”. But now the youth worker-turned-entrepreneur believes the plant will bring prosperity to indigenous New Zealanders.
A global upshot in cannabis legalisation has led to a “green rush” by investors into the fast-growing industry, worth some $12bn in 2018 — equal to The Bahamas’ annual economic output — data from Euromonitor International shows. A crop of social entrepreneurs also believe there is room for businesses to do good, as well as profit, from the plant.
“Our community has a history of cannabis over-use, probably, and people relying on it, and it has caused all sort sorts of issues with prohibition and people going to jail,” Caddie told the Thomson Reuters Foundation by phone from New Zealand.
“The dream is that we could have some sort of ethical cannabis company that looks after the workers and looks after the environment,” said Caddie, whose Hikurangi Cannabis start-up won New Zealand’s first medicinal cannabis licence last year.
While the health impact of [cannabis] legalisation is fiercely debated around the world, Caddie is optimistic that it cab create jobs and money and keep some people out of prison
As Canada, Uruguay and almost a dozen US states have legalised cannabis for both medicinal and recreational use, tobacco, alcohol and pharmaceutical companies are moving into the market with weed-infused drinks, foods and medicines.
With New Zealand due to vote next year on legalising recreational cannabis, growth is set to continue. Euromonitor predicts the industry’s value will rocket by almost 1,300% to $166bn by 2025.
Caddie lives in Ruatoria, a remote town in eastern New Zealand where 94% of people are Maori that has one of the country’s highest unemployment rates, according to 2013 government census data.
Its green rolling hills earned an unofficial reputation for growing New Zealand’s best weed after a Rastafarian community settled there in the 1960s.
Caddie and his business partner Panapa Ehau, spotted an opportunity in 2017 to tap into this local expertise and grow legal cannabis, offering locals the chance to buy shares in Hikurangi Cannabis through a crowdfunding campaign. “We tried to emphasise to people how risky it was,” said Caddie, “because there are no guarantees, but those people who put money in were prepared to do so and it was quite humbling.”
Several locals dipped into their savings and pensions to buy a stake, with about NZ$2.4m ($1.59m) raised in total to back the company, which has yet to make a profit.
While the health impact of legalisation is fiercely debated around the world, Caddie is optimistic that it cab create jobs and money and keep some people out of prison, while the risk of addiction to medical products such as lozenges and balms is low.
Marginalised minorities risk being shut out from the emerging industry due to a ban on licensing people with criminal records to grow or distribute the crop
Although Maori only make up 15% of New Zealand’s population, more than 50% of prisoners are Maori, according to the department of corrections, which runs prisons.
Half of Hikurangi Cannabis’s 25 staff are Maori, including four Maori growers. The company — now valued at NZ$30m after receiving further investment — is training more, with the aim of having 100 staff by the end of next year, Caddie said. “If there is a way to grow the plant they love and do it legally, they are super keen on that.”
In the US, black and Latino communities that have been criminalised for decades for illegally selling weed are also keen to benefit from the marijuana boom.
The US Food and Drug Administration (FDA) is holding a public hearing about the sale of cannabis after the December legalisation of the commercial production of hemp — a type of cannabis plant with no or little THC, the ingredient which makes users “high”.
It is unclear whether the entire plant will be legalised at federal level but several states may fully legalise marijuana this year.
Marginalised minorities risk being shut out from the emerging industry due to a ban on licensing people with criminal records to grow or distribute the crop, as well as high start-up costs and regulations on the type of property to be used.
“People that were once convicted for crimes that are no longer considered crimes need to have a platform to get involved in cannabis,” said Jessica Steinberg, MD of the Global C, a consultancy firm for cannabis businesses.
Eight in 10 people who launched a cannabis business or have an ownership stake in a marijuana company are white, according to a survey by Marijuana Business Daily, a US news site. Only six out of 10 Americans are white, census data shows.
“There is this opportunity to create and shape an industry the way it should be — with balance and equity — but that is not necessarily the reality,” said Steinberg.
The People’s Dispensary, a social enterprise that sells cannabis for medical and recreational use in California and Oregon, aims to do just that.
Founded in 2016, the dispensary — which has two stores and aims to open five more by 2020 — helps poor locals and former convicts who might struggle to access capital, start cannabis businesses with loans and grants.
Customers can also invest between $1,000 and $50,000 at their local dispensary in return for equity, and 10% of profits go into community initiatives, such as cookery classes and donations to homeless people.
“There is no way we could make all of this money and not give back to our communities ... which have been overly policed, overly incarcerated, because of prohibition,” said Christine De La Rosa, CEO of The People’s Dispensary.
However, opening up the legal cannabis industry to marginalised communities is not just about doing good — it also makes good business sense, said De La Rosa, who used cannabis to treat her lupus, an autoimmune disease which almost killed her.
“People on lower incomes spend more on cannabis ... If you don’t pay attention to people of colour, the formerly incarcerated and women, you are going to lose,” she said. “Because I’m a person of colour, I’m part of that under-served community, and I know that under-served community would rather come to me.”
Thomson Reuters Foundation