Most attendees at the campout in June belonged to the industry’s craft cohort. Many of them have been professionally involved in cannabis for decades.
Besides the business challenges, America’s legal marijuana industry also has to reckon with an unavoidable moral dimension. The US has been engaged in a “war on drugs” since Richard Nixon declared it in 1971. While white Americans use marijuana and other drugs at roughly equal rates to African Americans and Latinos, in virtually every respect, racial minorities have been disproportionately incarcerated and otherwise punished for involvement with drugs, including selling marijuana.
“It’s a classic story of gentrification,” Senter said following Meadow Lands. The dispensary chain was “taking advantage of opportunities that were not made for them”. In addition to boxing her out, the new store, she said, would compete with, and potentially undersell, existing locally owned dispensaries.
Of the state legalization experiments, California is, by far, the largest and most complex. For growers who operated in California’s gray and illegal markets and now want to transition into the legal market, the economics can be brutal. In the illegal market, an Emerald Triangle farmer might have sold a pound for $3,000 tax-free. Now the price is more like $600, before taxes and compliance-related costs.
‘A classic story of gentrification’
“Someone was just able to swoop in and sabotage fair business dealings; that’s wrong,” said Anne Kelson, an Oakland cannabis attorney who is not professionally involved in the case.
A native of Oakland’s impoverished east side, Crosby has lived a hard life. One of eight children, he said he had several bullets lodged in him and had served stints in jail. “I became a statistic in the drug life a long time ago,” he said.
‘If Amber Senter can’t make it, who can?’ Illustration: George Wylesol/The Guardian
Marijuana farming in California
T wo hours north of San Francisco, in Mendocino county, orderly roadside vineyards give way to the rugged forests and misty coast of the Emerald Triangle, America’s most celebrated marijuana growing region. In June, more than 300 cannabis industry insiders gathered there for a weekend of bonfires, starlit hikes and river swims.
In an interview, Crosby said he felt abandoned after he had signed the memorandum with Senter’s partner. And he felt an affinity for Have a Heart’s COO, Ed Mitchell, who grew up in another rough part of the Bay Area. With Have a Heart, Mitchell said Crosby would also receive a payment of an undisclosed amount once they secured the license.
Jeremy: It can become over a $100 billion industry. That’s, like, approaching what the beer industry is.
Jeannette: Specifically to build intergenerational wealth for the communities most harmed by the war on drugs. Those two things come together, a high capital-intensive business, and then the lack of personal capital, personal wealth. And it’s a hard place to start for a Black founder in cannabis.
Narrator: And the tags stay with the plants through harvest.
It is easy to think of the cannabis industry simply as the cultivators who grow the plant, the manufacturers who refine it into products and the dispensaries that sell those products. However, while these elements are central to the legal-cannabis supply chain, the cannabis industry is much more complex and varied than those businesses.
Some states require what is known as vertical integration, in which the cultivation, processing and dispensary businesses are all managed by one company. Other states instead employ a system of specialization, in which licenses for each type of operation are kept separate and are often awarded to different companies.
States voting on cannabis legalization in 2020
In 2019, about a dozen states were poised to put some form of cannabis-legalization initiative on their ballot referendums. Due to the COVID-19 pandemic and stymied petitioner campaigns, though, that number is now down to five states. Still, if these ballot referendums pass, the cannabis industry could see the expansion of existing markets and the opening of new ones in 2021. If you've been thinking about starting a cannabis business, now could be the time.
Plant-touching cannabis businesses
Nebraska could potentially join these five states with a cannabis-legalization measure on the ballot. Petitioners looking to get a medical-marijuana-legalization referendum on the ballot collected 182,000 signatures – 60,000 more than required by Nebraska state law. However, Nebraska's push for a medical-cannabis vote has faced a challenge in court by Lancaster County Sheriff Terry Wagner. A final ruling on whether the referendum will be on the ballot is expected this fall.