Equity Cannabis Operations Beat COVID, But Few New Faces

While many cannabis businesses have found wild success during the pandemic, supporting new cannabis entrepreneurs from the communities hit the hardest by the enforcement of misguided weed laws has been a bit trickier than in the past.

The idea of equity in the cannabis industry has spread east from California after the executable form of the concept first went through its growing pains in Oakland, and is still going through some fine-tuning in L.A.

But now, as the movement to empower those communities in an industry that they once found themselves incarcerated for at disproportionate levels grows, it’s facing a pandemic. This current state of the world is draining the coffers of many organizations looking to get their foot in the door. But those who had jumped through the necessary hoops to exist at this moment? They’re doing pretty awesome – just like everyone in the industry who hasn’t used the pandemic as an excuse for bad business plans. Sure, there were operational challenges of the bat, but if you have a mechanism to get decent weed at a reasonable price to people’s door, you’re probably doing well.

The wider social equity movement arguably finds itself in a weird catch-22 position as we wade through the pandemic. Its stars are crushing. They’re shining brighter than ever and helping to keep the conversation going. But as these successful entrepreneurs drive the conversation, it’s really difficult to join their ranks.

While the conversation around equity in the cannabis industry is stronger than ever, how executable is the idea at this moment? Not very. The pandemic has proven more difficult in the permitting aspect of the industry with delays costing people more and more as they continue to pay rent on facilities they hoped to get licensed.

At the moment, people are talking more about equity in cannabis than ever – all the way from L.A. to DC. But we haven’t had a lot of new faces to talk about over the last year.

One of the people that’s helped or inspired a lot of equity applicants across the U.S. over the last few years is Amber Senter. We’d need another page to cover everything Senter has been up to, but generally, her advocacy with Supernova Women and tangibly supporting equity brands through her Breeze Distribution has been huge.

Senter spent much of the year working to open a commercial kitchen via the EquityWorks! Incubator. It will provide infrastructure to equity brands on the come-up. For smaller edible companies finding their way in the world, building out your own commercial kitchen is a foolish use of resources when you could rent a certified kitchen and use the other cash to help grow the company.

Senter was quick to note things haven’t sucked for folks who were well-positioned going into the pandemic.

“Yeah, business has not been bad, that’s for sure. It’s been good, though permitting has been a bit of a challenge,” Senter told L.A. Weekly. “Dealing with the city, you know, local government and hopping through all the hoops required to get different sign-offs for our facilities, that’s been challenging. Definitely.”

Though she had her own trials and tribulations when securing a permit during the pandemic, she also generally has eyes on a lot of folks going through the process. We asked what it’s been like watching those entrepreneurs she’s provided support and advice hit the roadblocks despite putting their best foot forward.

“People have definitely been hitting brick walls a lot and I’ve been trying to really help them break down those walls. A lot of it has to do with engaging with the government and not being able to go into places in person and talk through stuff,” Senter said.

Senter explained that for many entrepreneurs like herself, the permitting process is a very personal thing. Being able to go look the regulators in the eye while making your case goes a long way.

“Even as far as permitting goes, as a state, like getting answers back in a timely manner regarding their manufacturing permits, all these things have been really slow moving,” she replied. “Zoning it used to be you go to the counter, you’d hang out for about an hour, zoning would approve your plans or your site. Now it’s three months.”

Senter noted outside the biggest issues that permitting presents, there are other factors complicating growth for startup cannabis businesses as lockdown continues. Things like in-store demos and in-person staff training simply aren’t a thing anymore. They’d traditionally been a key tool for anyone trying to elbow their way into more coveted spaces. You could add to Senter’s take on consumer education that a lot of the times the big dog dispensaries have decades-old relationships with vendors. It’s tough to get on their radar if people aren’t asking for them.

We asked Senter if it had been easier for equity permit holders to get a permit this year, would the snowball of progress be even bigger? Despite the hurdles faced by so many, did it actually slow down the cause?

“You know, I don’t think so,” Senter quickly replied. “I think everybody was sitting at home, actually paying attention. There were no sports, so people were forced to see the ugly side of what black and brown America faces every day. And they saw and they were appalled.”

On occasion, Senter had to deal with the awkwardness of people in the cannabis industry, of all places, announcing their newfound awareness for the complex relationships between communities of color and law enforcement. While shocked at the obvious much of the time, Senter tried to give folks the benefit of the doubt.

“There were so many distractions before that they just didn’t see it, you know. And now that they’ve seen it, like oh my gosh, we have to do something about this,” she said of those moments of the early summer dialogue around police brutality that in turn fostered more support for equity programs. “The issues with a lot of the equity programs that I’m seeing outside of the bubble that I’m in is, there’s no funding, you know? How can we provide any type of support whatsoever without any extra money behind it? What do you?”

One common practice in various time zones is equity programs getting scapegoated as a result of wider issues attached to various state and municipal well-intended equity programs with little funds in the coffers. Senter concurred with the sentiment and spoke to the amount of lip service equity operators have seen in recent years.

“It’s lip service until they start putting dollars behind it,” Senter said. “Otherwise, like I said, how did they expect these things? How can you provide support if it doesn’t come in the form of money? All support is money, especially from the government. These equity programs need funding. Then there’s some of the crazy stuff I’m seeing, like in Massachusetts with the lawsuit. What is that? Blatant racism playing into equity programs, you know?”

Senter savagely went to town on the Commonwealth Dispensary Association’s lawsuit attempting to derail the effort to protect the Massachusetts delivery permits for equity licenses and give them a head start when the delivery opens up. One of the reasons delivery is a popular option for equity operators getting into the industry is it provides the lowest bar for entry.

“You want to sue? Because the equity program they’re trying to set up to do what it’s supposed to do? This is insane,” Senter said about the legal move. “This is insanity. So, I think that I really don’t know what to say about Massachusetts. Really appalling. What happened out there is gross and atrocious. And those people ought to be ashamed of themselves for even being any kind of part of that whatsoever.”

Senter is a lot more chipper when speaking on the potential for the “EquityWorks!” Incubator being run through the kitchen. The plan is to provide low-cost commercial space to cook, mentorship, and revenue via Breeze Distribution’s connections to shelf space. One of the trickiest parts is getting that initial wind in your sails for any company.

“It’s really pretty awesome. We meet with the operators twice a week on Thursdays and Fridays. Fridays is a two-hour Q&A so anybody can just pop in and ask any old question from anywhere from licensing, compliance, R&D, to branding, marketing to data and market trends,” Senter said.

Senter had originally submitted the plan for the kitchen last January. Like everything else in life, plans were derailed in March by the hoopla of getting anything done in a socially distant manner.

Senter hopes to imbue the spirit of producing heat to all looking to participate in the kitchen’s mission.

“That is how I operate. That I love good Cannabis,” Senter said. “I’m a huge fan of weed and I have been for a very long time. I like to smoke good weed. I just like good weed products, and I want to make sure that everybody that comes into the Breeze umbrella is on that same page.”

We reached out to the Minority Cannabis Business Association to get their take on how COVID-19 has impacted social equity’s progress. MCBA Board President Jason Ortiz got his start in working to end the school-to-prison pipeline resulting from the war on drugs before he began working to encourage many of the same communities to take part in the legal cannabis industry.

“COVID has the dual impact of declaring our businesses essential to public health while simultaneously widening the gap between equity operators and traditional [multistate operators] by delaying the implementation of equity programs while large cannabis operators were making hundreds of millions during the pandemic,” Ortiz told L.A. Weekly.

Ortiz pointed to Illinois as an example. He said equity licensing was delayed nearly all of 2020 while operators in the traditional market were able to generate record-shattering profits, and gaining an even stronger foothold than pre-pandemic.

“It’s a classic example of justice delayed becoming justice denied, and reminds us that we must have equity on day one for these programs to achieve the desired economic uplift for the communities most impacted by the war on drugs,” Ortiz said. “Policymakers must take black swan events like a pandemic into account when designing our legalization frameworks, and the best way to do this is for all states moving forward to invert the traditional timeline by putting equity businesses first.”

Ortiz, like Senter, believed the wider movement did make headway regardless of the perils faced when actually getting the doors open.

“Despite a worldwide pandemic, the equity movement and our businesses forged ahead with pushing for stronger policies and more opportunity nationwide,” Ortiz said. “Our history of struggle against terrible odds prepared us for a long-term difficult fight and COVID was the most recent chapter in a long history of overcoming difficult situations and coming out the other side stronger than ever. In Massachusetts, equity only delivery has begun its rollout, cementing the idea of setting aside an entire license type to equity operators and the first Black-owned dispensary ‘Pure Oasis’ in Boston opened.”

Ortiz closed by speaking to the work Senter is doing in California. He didn’t know I’d chatted with her for the piece.

“On the west coast, Oakland-based Amber Senter and her cooperative “EquityWorks!” kitchen received state funding to open a facility dedicated to equity-first manufacturing companies,” he said. “So we are forging ahead despite the challenge of COVID and will begin 2021 in a position to really flex our equity-backed muscle across the country, pandemic or not.”

The National Cannabis Industry Association has been keeping tabs on equity programs rolling out across America since their inception. We asked what the biggest challenges equity operators are facing through the pandemic? Like Senter, NCIA Media Relations Director Morgan Fox pointed to a lack of access to capital near the top of the list, if not the biggest problem.

“Despite sales generally being strong, there are definitely additional costs associated with continuing operations during a pandemic in the safest manner possible,” Fox told L.A. Weekly. “Without the ability to access loans or major investment capital, businesses may find it hard to stay open under COVID conditions, not to mention the fact that cashless transactions are more difficult and expensive to offer without banking and not having them can impact sales and customer behavior.”

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