Cannabis is at the top of everyone’s mind. The MORE Act, which would federally legalize cannabis while releasing those serving time for cannabis-related charges, was recently reintroduced to the United States House of Representatives.
But while everyone is eager to indulge as seller and consumer, the groups who made cannabis what it is today are often shut out – some marred by past cannabis convictions and most unable to meet the high costs associated with licensing.
“We still have a lot of barriers that, you know, us equity recipients can’t get over,” says Edgar Cruz, a hopeful cannabis entrepreneur in Long Beach, California. According to Cruz, purchasing property for a cannabis business in Long Beach can cost $1 million, and that’s just the first step of the licensing application process.
Edgar is one of the hundreds of social equity applicants in California who have struggled to receive the necessary support to cross the finish line. But after three years as an applicant, Edgar has put his brand to the side so he can create lasting change for fellow cannabis equity applicants.
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As a cannabis entrepreneur based in Long Beach, California, Edgar Cruz’s work in the industry’s social equity space is personal.
At 15, Cruz had his first run-in with the law when he was arrested and charged for illegal possession of marijuana. That charge, he tells CNBC Make It, has influenced his decision to not only be involved in the now legal market, but to also ensure that entrepreneurs like himself have equal access to the billion-dollar industry.
Today, 18 states, two territories and the District of Columbia have passed legislation to allow adult recreational use of cannabis in the U.S. And 36 states and four territories have passed legislation to allow medical use, according to the National Conference of State Legislators. This increased legalization has put the legal marijuana market on track to be worth $70.6 billion globally by 2028. In the U.S., where marijuana is still illegal at the federal level, legal marijuana sales are expected to hit $24 billion in 2021 alone.
“To see how lucrative the industry has become and who’s profiting from these legalization changes versus who is still suffering because of the history behind it is very frustrating,” says Cruz, who has been trying to get his cannabis brand Ekstrepe off the ground for three years now.
In 2017, 81% of marijuana business owners in the U.S. were white, 5.7% were Hispanic, 4.3% were Black and 2.4% were Asian. Cruz, along with several other equity advocates in the cannabis space, says the lack of diversity in the industry is at least partly due to the lasting impact of the war on drugs. And while many cities and states have launched equity programs to try and close this gap, Cruz, who is a participant in Long Beach’s Cannabis Social Equity Program, says these programs have often failed due to local government regulations and a lack of resources and capital for budding entrepreneurs.
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