The 2018 federal hemp bill signed into law last year by President Trump was long overdue and created ample avenues of opportunity for investment, especially in the thriving CBD sector.
But it included a provision forbidding anyone with a felony drug conviction from entering the cannabis business for at least ten years.
And that disproportionately affects African-American entrepreneurs, because black people are four times likelier to be arrested for marijuana than white people even though both consume cannabis at roughly the same rate.
That policy began long ago. Prohibitionist Harry Anslinger, who was director of the Federal Narcotics Bureau, launched the war on drugs in the late '30s by claiming "marijuana causes white women to seek sexual relations with Negroes" and "reefer makes darkies think they're as good as white men."
Anslinger's Marihuana Tax Act of 1937, which made cannabis illegal, was followed by decades of laws disproportionately affecting black people by promoting everything from stop-and-frisk policies to mandatory minimum sentences. Even today, as marijuana laws across the nation are loosening, police continue to aggressively arrest black people on minor pot charges.
But now that almost 40 states have legalized cannabis in one form or another, even the prohibitionists are securing a stake in the $10 billion cannabis industry, Consider the case of former U.S. Speaker of the House John Boehner. The retired Republican sits on the board of Acreage Holdings, one of the largest cannabis companies in the world. He stands to make $20 million from a recent merger that will be finalized if the federal government lifts the ban on pot.
Considering Boehner has legislators on speed dial, we can expect the federal ban to be lifted sooner than later, especially because the former congressman is now promoting pot through online infomercials.
But one black entrepreneur has a plan that would enable African-Americans to enter the industry. Melek Dexter, founder of the startup Re-Up Holdings, plans to employ the same economic principles used by Boehner and Big Canna. He describes his company as a “crowdfunding platform” that raises “social awareness” and provides an “opportunity to put your money where your values are.”
But there's a difference. Rather than pooling rich investors' money, African-Americans would buy an ownership stake in a cannabis industry that would serve the black community.
“We figured out a way to get into this business and earn all of us a check,” says Dexter, who calls himself an "unconventional visionary" and is on a national tour to pitch the idea.
Black people make up only 1 percent of the U.S. cannabis industry but 13 percent of the population. Although some cities and states have implemented social equity programs, most black people still lack the capital to invest. This is the result of decades of governmental policies that have prevented African-Americans from prospering and building generational wealth.
Dexter believes there is a golden opportunity to dominate a portion of the marijuana market by investing in black entrepreneurs who will launch startups serving and employing the black community. But if this doesn't happen soon, Big Canna will swoop in. “They are buying licenses left and right,” Dexter says. “Everywhere there is a license, they are grabbing it up.”
He believes the continual arrest of black people for weed despite the loosened laws is part of a strategy to kill the underground distribution networks that have existed for years. “When they come into the neighborhood, they are gentrifying these networks and setting a dispensary there and arresting you and selling what you were selling," he says.
The initial goal is to raise $1.3 million, which will be the seed money to pay for the marketing costs to collect $50 million, the maximum that can be raised under the SEC’s Regulation A exemption, which makes it easier for smaller startups to raise capital by loosening restrictions on who can invest.
“We can be our own reparations,” says Dexter, who has worked in the cannabis industry for several years. "We can be our own social equity."
It’s been done before. Marcus Mosiah Garvey, a Jamaican native, arrived in New York City in 1916 at the age of 29 with a plan to unite people of African descent throughout the world and create a global economy that would enable them to achieve economic independence.
“Marcus Garvey raised millions from poor people on just a dollar a day,” Dexter says.
Garvey raised millions of dollars and invested in a chain of grocery stores in Chicago, New York, and Detroit, as well as restaurants and other businesses, creating hundreds of jobs in the black community.
He also sold $5 shares to invest in the shipping line Black Star Line, which aimed to facilitate global trade by black people throughout the world, including Africa, and raised enough to purchase three ships.
But Garvey soon drew the attention of J. Edgar Hoover, director of the bureau that would become the FBI. He viewed Garvey as a “radical” who was “agitating the Negro movement.” Hoover had the civil rights leader imprisoned and deported on bogus charges.
“J. Edgar Hoover made his bones by bringing down the great Marcus Mosiah Garvey,” Dexter says. “[That] was the last time this thing was done, and it’s feared by the masses.”
After Anslinger drafted the Marihuana Tax Act of 1937, which essentially made all cannabis products illegal, a black market developed. Sailors and immigrants began bringing it through the port of New Orleans, where it quickly became the drug of choice for black jazz musicians, who would openly smoke and sing about it to a growing white audience.
The New Orleans musicians, who called marijuana "reefer," "weed," "tea," "gage," and "muggles," introduced it to the jazz crowds in New York, Chicago, Detroit, and Philadelphia. Jazz music also inspired the writers of the Beat Generation during the '50s and the hippie movement of the '60s; both delivered marijuana to the white, middle-class Baby Boomer generation.
President Richard Nixon viewed marijuana as the enemy when he escalated the war on drugs by creating a formal campaign in the '70s and then using it as an excuse to crack down on black people and hippies protesting the Vietnam War.
Nixon also financed the spraying of Mexican marijuana with the deadly pesticide paraquat, which led to poisoned weed being smoked by Americans in the mid-'70s.
And that is what led to mostly white former hippies in Northern California growing their own, more potent weed. Today California supplies 80 percent of the cannabis consumed in this country, while in the '70s, more than 90 percent of the cannabis consumed in the United States was imported from another country.
The co-opting of the marijuana market is just a repeat of another American phenomenon, Dexter says. “When [blacks] were running numbers, [officials] turned it into the state lottery,” Dexter says. “When we had gambling houses, they went ahead and created Las Vegas and got gaming licenses.
“This has happened before in history, and that’s what’s happening now. [Blacks were] selling weed, hand-to-hand, person-to-person, and now the state is legalizing it and creating dispensaries. What you’ve been doing has always been grafted and consumed.”
Dexter's entire talk can be viewed here. The two-minute video above is his elevator pitch.
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