Stuck in limbo, Cannabis entrepreneurs take on a grassroots fight for equity
In the kitchen of his Roxbury apartment, Oliver Prudent blends together chili peppers, cherries, spices and a generous helping of THC extract, the signature ingredient in his cannabis-infused hot sauce.
Prudent worked behind the soundtrack of a blaring television, his 3-month-old son Alnes cooing, and under the watch of Zoe, a small black cat and recipe-testing supervisor. His cramped kitchen serves as a recipe-testing lab for his cannabis-infused catering business, a venture Prudent hopes to someday turn into a brick-and-mortar establishment.
The 25-year-old entrepreneur says his little Cherry Trip hot sauce bottles — with their flaming chili pepper labels — mark a huge step in his yearslong fight to stay in the cannabis industry.
But the fact that he's still working in his kitchen, he says, shows how far he needs to go. And he says a state program meant to help cannabis entrepreneurs like him — called the Social Equity Program — has done little to move him forward. Many of the people eligible for priority status under the program find themselves struggling to find a way in, challenged by layers of bureaucracy coupled with barriers to capital.
Prudent says the process of getting an application for a dispensary, securing funding and actually get a business off the ground has been an ongoing struggle.
“For a year now, we’ve had this 'social equity' status, and nobody’s actually reached out to see if there’s anything we need or given any kind of guidance,” Prudent said. “Once the status is given to you, you’ve got to fight for everything else afterwards. It feels like one of those trophy plaques they give out for participation.”
The state’s program — the first of its kind in the nation — was established in 2018 to prioritize communities disproportionately criminalized for marijuana in the state’s multibillion dollar legal cannabis industry, offering assistance, expedited license application review, and reduced or waived processing fees. The goal is to fast-track entrepreneurs like Prudent through the review process and carve out a place for local residents to open their own pot shops, promising advantages to people from communities directly impacted by the war on drugs, primarily communities of color.
Meanwhile, the state’s cannabis industry has remained predominantly male and white: 68% of active owners, executives and employees are white, and 62% are male, according to data from the Cannabis Control Commission, the state’s regulatory agency. Out of roughly 900 people who participated in the Social Equity Program, 29 participants have reached the "operating stage," meaning they were approved to open their businesses. Of those, just over two dozen are still in business, according to state data.
State officials say Massachusetts has struggled with outreach for the program, and applicants’ lack of funding represents a major hurdle in the next step after application to obtain a license.
“People are in the licensing process, they're really getting stuck in terms of opening their cultivation facility or their micro-business or their dispensary,” Cannabis Control Commissioner Bruce Stebbins told GBH News. “The lack of availability to cash, to capital, has been a huge roadblock.”
Brockton resident Akinyi Otieno was part of the first cohort of applicants in the state program. Nearly five years later, she says the process culminated in months of stress and zero progress: uncooperative landlords, flaky investors, overpriced contractors, and an endless maze of licensing and zoning requirements that only amounted to dead ends.
“There are so many traps. It’s so frustrating and demoralizing,’’ she said. “I think there are good investors out here, I just don’t know who they are. I don’t know where they are.”
Otieno dreams of opening her own cannabis delivery service. After years of seemingly insurmountable challenges, she’s putting her effort to secure her own license on hold.
“I feel sometimes like I'm giving up, but there’s just so much you have to be able to tolerate,” she said. “There's just so many more opportunities to support those people who do have the money, who do have the ability to get in there and just need support. It feels like we're going to have to be our own support.”
Black entrepreneurs already face discrimination in securing business loans from banks, a phenomenon exacerbated by the pandemic. Capital is also more difficult to secure for marijuana operators due to a federal prohibition that scares most banks away from funding small business loans for operators in the industry.
Last August, the state created a trust fund that sets aside 15% of recreational marijuana taxes for social equity businesses, estimated to bring in upwards of $20 million per year. Last month, five industry experts were appointed by the state for the Cannabis Social Equity Advisory Board, charged with helping oversee how the money is spent.
The fund is in its early stages, Stebbins said, part of sweeping regulations to the state’s marijuana industry signed into law last summer by former Gov. Charlie Baker. The law also requires regulators to require businesses to include — and maintain — social equity plans in their agreements with municipalities, a move to crack down on pay-to-play arrangements in municipal fees required by cannabis operators, a process that disadvantaged local entrepreneurs from communities of color at the outset of legalization.
“The fund is intended to help social equity applicants with their business, to get their doors open,” Stebbins said. “Hopefully a number of the social equity applicants who might be stalled are going to get over that finish line and be able to commence operations.”
Some advocates say the move is too little too late — Massachusetts has around 400 licensed cannabis retailers, and operators everywhere are struggling in an oversaturated market in the midst of financial decline.
"People who look like me, who come from where we come from, should have had full participation, but clearly they failed," said Harry Jean-Jacques, who runs a cannabis advocacy organization based in Dorchester. "They never wanted equity ... it was a big gimmick."
Recent changes to cannabis laws could hold promise, Jean-Jacques says. But there just isn’t enough time to wait around and find out what the future will hold.
“At the beginning of all this, I was giving people high fives. I was like, ‘Oh, we're all going to be rich!'" Jean-Jacques said. “Then when we saw the actual terrain, the capitalism, the corporatism, we’re like, ‘Oh, no.’ Them casting us astray, that empowered us. We created our own hope.”
Jean-Jacques and his brother David channeled their own frustrations and failures within the social equity process into a nonprofit advocacy organization called the Big Hope Project.
“Everything we do is for us, by us,” Jean-Jacques said. “Unfortunately, the community that’s already burdened by the historic lack of resources is having to bear the brunt of that and do everything in order to take care of our own community.”
The nonprofit, founded in 2021, offers what Jean-Jacques calls the “cheat codes” on how to avoid wasting time and money — including fellowships and educational programs for aspiring cannabis entrepreneurs, community outreach events and resources to expunge and seal criminal records.
Prudent says he was introduced to Big Hope when the organization was first getting started, seeking information about how to expunge his own criminal record. He’d been charged with illegal possession of marijuana in 2019 on a trip through New York to deliver edibles at a festival — a charge that influenced his decision to embrace the legal market.
“I want to show other Black men, especially young Black men that cook in kitchens and work in restaurants, that you can legally make your own products,” Prudent said. “Take agency in this. This is your industry, this has always been our industry.”
Prudent had fulfilled the conditions of his release, which required him to get a full-time job or return to school. He enrolled in a culinary program in 2020, using the school kitchen to develop recipes for cannabis-infused baked goods.
With the help of Big Hope, Prudent secured a licensing deal last year with a manufacturing company to produce his first legal market product, the Cherry Trip hot sauce.
He knows there is still a lot of work to do before he can open his own shop. But he’s not giving up, holding on to hope that the Social Equity Program may eventually deliver on its promise to balance the scales.
“We really need social equity. I’m not going to hold it to everything that it was cracked up to be, but still, I got this boost,” Prudent said. “We’re going to see what we can do.”
For right now, that means mixing hot sauce in his kitchen.
“This little bottle right here, that’s my struggles and pains, sweat and tears,” Prudent said. “At this point, you can’t stop.”
