Why Black Entrepreneurs In Kansas City Might Be Left Out Of The Medical Marijuana Boom
Angela Boykin watched her cousin die from cancer in 2016. Loretta — or Lo, as everyone called her — suffered through significant pain. So when Missouri voters passed the medical marijuana law in November, she wanted in on opening a dispensary in Kansas City.
Missouri starts officially accepting applications for medical marijuana businesses Saturday, and it’s a potentially lucrative business: A cannabis data research company estimates that by 2025, Missouri could see $111 million in medical marijuana sales yearly.
But Boykin and other applicants are black, and even though Missouri by law can’t factor in race or gender when awarding licenses, the national trend is that pot business owners and founders are overwhelmingly white.
“This industry has just been horrible for the black and brown people,” Boykin said. “ ...Now that it is legal, I'm hoping to have an economic impact on my community that is mainly African-American or Mexican or Latino.”
Black and white people use marijuana at similar rates, but research shows black people are more likely to be arrested and jailed for marijuana possession.
“We’ve been penalized for years for this ‘drug’ which is now medicine,” Boykin said.
Boykin’s application is among the more than 70 prefiled in the 5th Congressional District, which covers Kansas City, Lee’s Summit and Oak Grove. The state will only dole out 24 dispensary licenses in the district, which means two-thirds of applicants will be rejected.
The diversity problem
Diversity within the marijuana industry, both medical and recreational, is rarely studied. A 2017 report by Marijuana Business Daily is one of the few, finding women and minorities make up a higher percentage of executives in the cannabis industry compared to the U.S. average, but that the vast majority of owners and founders are white.
These are stats Gabrielle Bennett, who lives in Kansas City, knows well.
“As a black woman, double minority, it's hard to see yourself in places of power in this industry, and really any other industry,” said Bennett, who’s applying to open a dispensary with her husband in Gladstone.
Eli McVey, the research editor at Marijuana Business Daily who wrote the 2017 report, said there’s been a greater focus on equity in the industry in the past few years. Some states are considering diversity when deciding who gets to sell and grow marijuana. Ohio mandated at least 15% of medical marijuana licenses go to businesses owned by minorities; it was later ruled unconstitutional. And Massachusetts has an equity program, but almost no black or Latino candidates applied, according to NPR.
Missouri’s application includes a few questions related to diversity, such as asking whether there’s a plan to address diversity in ownership and staffing.
Lyndall Fraker leads the state’s medical marijuana program, and said he’s following what was laid out in the amendment voters approved. It didn’t factor in race or gender.
“I feel good about our program,” Fraker said. “I think we've tried to treat everyone fair and be very transparent, and make sure that everyone understood that our goal is to do this following the Constitution, make sure it's safe for the patients in Missouri.”
High starting costs
McVey said parts of Missouri’s application could hurt the potential for diversity, such as asking applicants to have $150,000 in capital to open a dispensary. Missouri isn’t unique in having a capital requirement, McVey said, noting that it serves a purpose.
“They want to make sure that you have enough money to weather a few storms and that they won’t just be giving a license to somebody that’s going to go out of business in two months,” McVey said.
Missouri also requires a nonrefundable application fee: $6,000 for a dispensary and $10,000 for a cultivation facility.
Chadd Whistler helped collect signatures to get Amendment 2 on the November 2018 ballot and wants to open a dispensary in North Kansas City, close to the Heart of America Bridge. Whistler, a 53-year-old white man, said he thinks the application fee and capital costs are reasonable.
“I do understand that, you know, it took digging into my savings to come up with that money. And I understand that a lot of people just are not in that same situation,” Whistler said, adding later, “I do think it is necessary to be able to prove in some way that you're financially capable of making a go of this business.”
Boykin is using her retirement account to fund the startup costs, and estimates she’s spent about $38,000 on things like the application fee and paying for legal and accounting help.
“I’ve been having some anxiety, but you know, I pray,” Boykin said. If she’s able to get her license — and help people like Lo — she said she wants her business to give back to her community.
Aviva Okeson-Haberman is the Missouri government and politics reporter at KCUR 89.3. Follow her on Twitter: @avivaokeson.