Lack of capital biggest barrier to entry for minority-owned cannabis firms: Q&A with NuLeaf’s Jeannette Ward Horton

To help people of color gain entry into the cannabis market, one marijuana industry veteran has developed a grant-funding program to give them a leg up.

As the executive director and co-founder of Portland, Oregon-based NuLeaf Project, Jeannette Ward Horton, along with her husband, Jesce Horton, is raising money to provide up to $30,000 in capital a pop to cannabis companies, both established and up-and-coming, to help their endeavors succeed.

The program began in July 2018. It first targets the people of color who own marijuana firms in the Portland area, with ambitions to spread to the entire state of Oregon, then nationally.

Adding more diversity in cannabis business ownership benefits companies in how they appeal to their customers, according to Ward Horton.

“Diverse business owners are going to be more attuned to, ‘How do I reach consumers like me?’” she said.

Ward Horton, who also is vice president of global marketing and communications at Denver cannabis tech company MJ Freeway, spoke with Marijuana Business Daily about the lack of diversity in the cannabis industry and what she hopes to accomplish.

How would you characterize the amount of diversity in the cannabis industry?

(MJBizDaily) had a recent survey result and you did a good job of illuminating where things are. You see the least amount of ownership among African-Americans in plant-touching businesses. Businesses that require a license.

What that tells you is that the No. 1 thing today keeping people of color, specifically African-Americans, out of the cannabis business as successful business owners is capital.

People of color won’t enter, they won’t grow, they won’t scale, they won’t be successful without capital.

Why is there such a lack of capital among that demographic?

Getting capital in cannabis is hard, right?

But the stats around people of color getting capital in any industry is very low. Funding for people of color is just significantly less.

This is known outside of cannabis, but no one in cannabis is saying, “Here’s this problem, let’s create a funding source for people of color.”

Aside from a lack of capital, are there any other reasons there are fewer people of color in the market?

Factors around licensing restrictions. When you limit licenses, you are going to see fewer people of color. A lot of states are still doing that.

Then there are connections. Who do I know? Who am I connected to? Who’s already in the industry? Are those people in my connected circle?

If you start white, you kind of continue white. But what we’re not talking about enough is the main reason: capital.

How is the industry hurt by this lack of diversity?

When you have more diverse business ownership, you’re going to be able to recruit a more diverse consumer base. Then we bring more people into this industry legally. Those people are now additional consumers that everyone can benefit from. That’s the first reason.

The second thing is you’re not going to maximize on innovation if you don’t maximize the number of smart minds who are contributing.

When we are creating these barriers that keep people out, then you miss out on that great innovation. Innovation that could be coming from someone who we’re not letting play.

It’s your feeling that the racial makeup of cannabis ownership doesn’t proportionately reflect the consumer demographics.

That’s right. I absolutely think that.

Of the three main categories of plant-touching businesses – cultivators, processors and retailers – which do you think need the most help in getting started if you’re a person of color?

Processing and cultivation are the most capital-intensive at the start. Processing, especially. So, that would be my educated guess – because of the expense of processing equipment.

I see more people of color who are cultivators or retailers. Processing also happens to be one of the most profitable if you can get the capital.

What are some tips to be successful in securing grants from your organization?

The key is that you need to be headquartered in Portland. Or at least moving a part of your business to Portland.

After that, 51% of your ownership needs to be people of color.

What you have to do is simply apply. We’re not creating a lot of barriers or hurdles.

The idea is that we mentor and coach businesses continually. So, we will take businesses as part of our program almost at any stage and create relationships that help mentor and coach them and help move them along.

What percentage of tax money generated by cannabis businesses goes toward a program like yours?

I don’t know the exact percentage versus what they brought in versus what they gave out. The amount total was pretty low.

The city of Portland gave out $375,000. That got divided up by organizations that all had missions to support communities most disproportionately affected by the war on drugs.

How else are you funding this grant program?

We absolutely want to get funding from other sources.

The state of Oregon, we think, should be next. They should have set aside some of their cannabis taxes they collect for this.

But also we want corporations to donate. We believe that the well-capitalized ones should. We believe that should be part of their ethos. To give back.

More information about the NuLeaf Project and application details are available here.

This interview has been edited for length and clarity.

Bart Schaneman can be reached at [email protected]

One comment on “Lack of capital biggest barrier to entry for minority-owned cannabis firms: Q&A with NuLeaf’s Jeannette Ward Horton
  1. Adnois Armage on

    MJFreeway’s hiring and firing practices are extremely unethical. I know for a fact that Jeannette and the company she works for have fired brilliant POC who belong in this industry. Shame!!!!

    Reply

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