Can Marijuana Help Bridge the Economic Divide for African-Americans?


In 1619, a group of English colonists in Virginia received approximately 20 Africans who they used as slaves. Despite what history books will tell you, it was not the first time that black people arrived in the United States. In 1526, enslaved Africans were part of a Spanish expedition designed to create a North American base in South Carolina. Interestingly, these slaves rebelled and ruined Spain’s attempts to sustain the settlement; they abandoned it within a year.

Even so, 1619 was a significant year in the history of America and is worth thinking about as we reach the 400th anniversary. It is hard to argue that African-Americans haven’t lived at a significant disparity compared to the rest of the nation ever since. Throughout the last four centuries, black people in the U.S. have tried to exist and survive against an unequal system.

African-Americans often lament the fact that most industries don’t allow them so much as a foot in the door. The purpose of this article is to determine whether the marijuana industry, a nascent sector, finally offers an opportunity to close the economic divide, if only by a sliver. The history of cannabis to this point doesn’t suggest it will happen, but let us continue regardless.

Before discussing the potential opportunities and roadblocks facing black Americans in the weed sector, let’s take a brief journey into the past.

(1619 – 1865) – Hard-Earned ‘Freedom’

The landing at Virginia was the beginning of almost 250 years of state-approved slavery. The number of African slaves brought to North America increased markedly by the late 18th century. Perhaps 10,000 slaves reached those shores between 1620 and 1700. From 1761 – 1810, the figure rose to over 300,000.

From the beginning, the enslaved Africans were separated from the rest of the nation. Maryland passed an anti-miscegenation statute into law in 1661. It forbade marriage between races. By 1776, over half of the population of Maryland, Virginia, and North Carolina consisted of slaves. Fighting bravely in the subsequent War of Independence wasn’t enough to change matters.

By 1860, enslaved black people comprised 13% of the population, approximately four million individuals. Of the first 12 American Presidents, eight were slave-owners. At this point, some free descendants of slaves were sent back to Liberia to prevent ‘disruption.’ The fact that the majority of them were American-born didn’t come into consideration.

Historically, Southern states claimed to fight the civil war to protect states’ rights. As it happens, their right to own slaves was the main reason. President Lincoln said that initially, the civil war began as a means of trying to keep the nation together! Some historians believe that he took on the fight of the slaves to prevent the British seeing the South as a separate country. By making the fight about freedom, it looked bad for the South. The British had abolished slavery over 30 years previously.

At the end of the conflict, the slaves were free. As many discovered to their cost, however, this freedom was mainly theoretical.

(1865 – 1965) – Another Century of Struggle

The murder of Abraham Lincoln unquestionably changed American history. What many people don’t realize is that it also irrevocably altered the course of black American history too. It is fair to say that African-Americans don’t, and never have wanted anything more than equal treatment. Sadly, many are denied the opportunity to make their way by a slew of laws designed to disadvantage black people in the United States.

It could have been so different. On January 12, 1865, General William T. Sherman and Secretary of War, Edwin Stanton, met with 20 black community leaders in Savannah, Georgia. Four days after the meeting, Sherman issued his Special Field Order No.15, better known as ‘40 Acres and a Mule.’ As it happens, the order doesn’t mention a mule!

When asked what they wanted, the leaders of the black community said ‘land.’ They knew that the best way to take care of themselves was to get land, and turn and till it by their labor. The Order mandated that black families would receive a maximum of 40 acres of land apiece. Across the total 400,000 acres of land, no white man was allowed to reside. It was an exclusively black community governed by African-Americans.

It was, of course, the ultimate attempt at segregation. Had it proceeded, American history would have looked very different indeed. Perhaps African-Americans would not spend the next 150+ years at a decided economic disadvantage? In any case, Lincoln’s successor, Andrew Johnson, overturned the order in late 1865.

Reconstruction

In 1868, the 14th Amendment to the Constitution granted citizenship to every person born or naturalized in the United States. This included ex-slaves, and all citizens were supposed to have “equal protection of the laws.” In 1870, the 15th Amendment guaranteed the right of all male citizens in America to vote, regardless of color, race, or whether they were once slaves. It was utter nonsense, and soon, black Americans knew that their alleged freedom was not the same as that enjoyed by whites.

First of all, bizarre laws in individual states ensured that slavery existed for decades after the end of the civil war. Violence against black people escalated in the 1870s. The 1873 Colfax Massacre, which saw the death of over 100 African-Americans, was one of a series of attacks by white militia.

States started to implement methods to prevent black people from voting. The infamous Mississippi Plan involved violence and intimidation to stop black voter registration and voting. Another technique of disenfranchising racial minorities was to administer literacy tests for voting. Legislation such as grandfather clauses ensured that illiterate whites didn’t suffer.

Jim Crow & Civil Rights

Well over half a century after the abolition of slavery and African-Americans were still second-class citizens in practically every facet of life. The Roaring Twenties saw a vast increase in living standards in many parts of the U.S. – just not for black people. An estimated two million African-Americans left the South after World War I to look for jobs in the ‘friendlier’ North.

They soon learned that it was a myth. Certain Northern towns did not permit blacks after sunset. Oregon legally did not allow African-Americans into the state until 1926! In the South, segregation was in full swing. Black schools didn’t receive adequate funding, and African-Americans found it hard to get jobs, and almost impossible to get well-paying ones.

The period after the Second World War was another one of immense growth. Americans embraced suburban life, and a considerable number of whites achieved their dream of owning a home. As any economist will tell you, the biggest obstacle to wealth creation is lack of property ownership. Even those that could afford a property lost out due to the legality of housing discrimination (until 1968). In 2017, the gap between whites and blacks in terms of homeownership was over 30%.

After further violence, the Civil Rights Era finally delivered the end of legal segregation. The Voting Rights Act of 1965 forbade racial discrimination in voting. It also placed restrictions on some Southern states if they tried to change these laws. Astonishingly, a Supreme Court Ruling in 2013 overturned this aspect of the 1965 code!

African-Americans & Marijuana – The Story so Far

The purpose of the preamble was to demonstrate the history that has led to the existing disparity in wealth between whites and blacks in the United States. Sadly, things have not changed in the last 60 years or so. In 1962, the average wealth of white households was seven times larger than their black counterparts. In 2019, the ratio is almost the same: $933,700 for whites, $138,200 for blacks.

The hope is that the cannabis industry could help African-Americans to begin to bridge that gap finally. The history of weed so far doesn’t bode well, however. In 1930, Harry Anslinger became America’s first Federal Bureau of Narcotics Commissioner. He used good old-fashioned racism to hammer home his point. Anslinger linked the herb with jazz, and claimed that marijuana was “a drug black men used to seduce white women” and “promotes interracial mixing, interracial relationships.”

The Marihuana Tax Act of 1937 effectively prohibited cannabis throughout the United States. Over 80 years later, and this federal ban remains in place. While the Supreme Court overturned the 1937 legislation, the 1970 Controlled Substances Act took its place. In that time, it is fair to say that the unfair treatment of African-Americans extends to weed use.

Research from the American Civil Liberties Union is damning. In 2013, it concluded that a black American is 3.73 times more likely to be arrested than a white for cannabis possession. In case you were wondering, whites now use cannabis at a slightly higher rate!

Arrests in the Legalization Era

In states such as Washington and Colorado, where recreational use is legal, the expected fall in arrests has occurred. A report published in Substance Use and Misuse looked at arrest rates in Washington before and after legalization. Beforehand, 2.5 times more African-Americans were arrested than whites. After legalization, the rate doubled to 5 times. At least the overall arrest rate is practically non-existent in the state of Washington in 2019.

Can African-Americans Profit from the New Marijuana Industry?

Pro-cannabis campaigners such as Cory Booker are making social justice a central theme of their fight for federal weed legalization. Black communities have suffered disproportionately during the War of Drugs but have yet to see much in the way of a benefit. When you include multiracial African-Americans, about 14% of the population is comprised of black people. However, only around 4% of cannabis business owners are black.

It is the relative lack of wealth that is a huge barrier to entering the marijuana industry. First and foremost, you need a license if you want to set up any weed business. Depending on the state, this is a six-figure sum straight away. Add in insurance, space rental, insurance, marketing, and taxes, and you enter the seven-figure territory. We have heard that it costs a minimum of $3 million to open a dispensary in California.

You can forget about a bank loan as financial institutions refuse to touch the industry at present. Unless you are already independently wealthy, your only recourse is to rely on private investors. These firms are under no obligation to provide for all ethnicities or genders. Given the country’s past, it isn’t a stretch to suggest that prospective African-American cannapreneurs are less likely to receive investment money.

The legacy of the racist War on Drugs adds an extra barrier. Those convicted of a marijuana-related offense find it much harder to find a job, or even housing. It is yet another hurdle that limits a person’s ability to make a living. Remember, black Americans are arrested at a disproportionately higher rate than whites.

In Washington State, for example, there is a scoring system in place. A misdemeanor is worth four points, and you will probably get refused in the initial phase if you have eight or more points.

Other Barriers

While money is a significant obstacle, it is far from the only problem. For one, most legal weed states have disproportionately lower black populations. Data from the 2010 Census showed that 55% of America’s black population lived in the Southern states. Indeed, over 100 Southern counties had a majority African-American population. States such as Georgia, which have large black populations, don’t even allow medical weed.

As expensive as it is to get a license, finding the funds is the least of your problems. Getting a permit to sell weed requires a ton of experience applying for government licenses. It also helps if you have good existing political relationships with those who write the rules. Cash is great, but money and influence are better.

By now, you understand that there is a broad legal gray area with regards to marijuana. There is a level of risk for everyone who enters the industry. What if the federal government decides to enforce prohibition? African-American entrepreneurs would, once again, get the sharp end of the legal stick.

Are Social Equity Programs the Answer?

In theory, equity programs should help reduce racial disparity in the weed industry by providing money to non-white businesses. An equity system built by the government to support, educate, and build black enterprises is potentially crucial. Oakland offered the first program of this nature in 2016. Subsequent programs in Massachusetts, Los Angeles, and other states used the Oakland template.

One of the many things such a program can do is give non-whites and individuals with criminal records the same chance as a white person in the weed industry. There is no doubt that such programs have helped some black cannapreneurs get a foothold in the industry. However, since white-owned companies benefit from these programs, are they even serving their original purpose?

Final Thoughts on African-Americans & Marijuana Business

The primary barrier to an increased black presence in the weed industry is money. Getting a license alone is expensive; add in the cost of everything else, and it is a near impossibility without funding. Centuries of oppression have ensured that black communities are, on average, light years behind their white counterparts financially. Private investors don’t often try to invest, which leaves black businesses at a dead end.

The other significant barrier is the fact that a felony conviction forbids you from owning a marijuana business in the first place. A staggering and disproportionate number of African-Americans have a felony conviction for a cannabis ‘crime.’ Although the total amount of arrests is way down, the damage is already done.

Black Americans who want to enter the cannabis industry don’t require ‘handouts.’ Instead, they need a system that permits them the same opportunities as white entrepreneurs. Nationwide expungement of cannabis convictions would be a fine start and open the field for many more cannapreneurs of all races. It would help if private investors began investing in black cannabis businesses at the same rate as whites, but we doubt that our readers believe in unicorns.

As for the issue of finance, there is nothing that can make up for the over 400 years’ worth of subjugation that has caused such a wealth disparity. As long as starting a marijuana business is so expensive, it is unlikely that African-Americans will ever get the same opportunity. Perhaps assistance from equity programs is necessary after all, though it continues to enrich whites.

Ultimately, there is no easy solution, although the complete legality of the herb would undoubtedly help!