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After decades of uncovering and reconciling the systemic damages caused by the War on Drugs on people of color in the U.S., the tide is turning toward institutionalizing a regulated marijuana industry market.
Detroit’s legal cannabis business community is ahead of the curve in social equity opportunities for residents to get in the game.
“Social equity is inclusive of ownership and the workforce,” said Rebecca Colett, founder of Detroit Cannabis Project.
“An equitable cannabis industry in Detroit will result in more people of color operating facilities, so actually owning these licenses, owning these operations, but it’ll also result in the workforce: the bud tenders, the growers, the people that work at the lab, [at] safety and compliance facilities. This is possible, we just need to get the right tools and skill sets to make it possible.”
The Detroit Cannabis Project is a social equity technical assistance incubator that serves as Homegrown Detroit’s official technical assistance provider.
Colett is also a private marijuana operator in the state of Michigan. She said the idea for the project came when she first noticed a lack of people of color, especially Black women, within the local business circles of the legal cannabis industry.
“I definitely noticed a huge gap of certain business operational topics, certain things that just weren’t common knowledge, especially to people of color in the social equity demographic,” said Colett.
“Me and my team came up with a curriculum to help fill some of those operational gaps. While we don’t teach people how to grow or make edibles, we do talk about back-office procedures needed to run, build, sustain and scale a legal cannabis business.”
Detroit Cannabis Project programs are crafted in an education and mentorship format to address the needs for people of color to help eradicate glaring barriers of entry into the market, including cost.
The Michigan Cannabis Industry Association (MCIA) funded for the first two years the Detroit Cannabis Project contract before transitioning onto the city’s expenditure budget three weeks ago at $350,000 per year. The ongoing funding sources allow the programming to be available free for participants.
The mission of the Detroit Cannabis Project is to inform residents, particularly of those people of color, of the recent opportunities available in Detroit’s private marijuana retail operations.
In April 2022, Detroit City Council approved a revision to the 2020 ordinance for recreational marijuana sales within city limits. The revisions include more inclusivity for social equity-tagged licenses that are open to residents from 184 surrounding communities, not just legacy Detroiters.
“We knew in developing the ordinance that there was a skills gap there and it’s kind of a sophistication or business savvy that some people just don’t have,” said Colett. “You can’t just turn around and say I’m going to start a business and then tomorrow the knowledge is just imported into your head.
“With this industry especially, there’s so many high-level operating billionaires who are making so much money, who’ve been doing this for so long. And so, for Detroiters and equity applicants or people who’ve been disenfranchised by the disproportionate impact of enforcement, they’re starting steps behind Ground Zero.”
According to data by the National Incident-Based Reporting System (NIBRS) provided to the FBI, marijuana-related arrests in Michigan for possession decreased from 14,031 in 2018 (pre-legalization) to 422 arrests in 2020. Arrests for the sale of cannabis also dramatically decreased from 15,615 in 2018 to 570 in 2020.
Last April, Detroit Cannabis Project hosted its first cohort of 30-35 social equity entrepreneurs in Detroit and has continued to expand program offerings, resources, and capacity for more participants. The program included a weekly webinar series to create a community discussion of different cannabis business topics.
Because of the overwhelming response of the recent city partnership, last fall the Detroit Cannabis Project ran a business plan boot camp for 200 applicants from around the city for a semester of two weeks of immersive training.
As COVID response restrictions have eased, the project team is excited to upgrade offerings of advanced classes, in-person events and networking opportunities.
The cannabis industry’s revenue-sharing model is expected to provide a financial boost to the city’s budget.
“I’m extremely looking forward to the revenue sharing that comes from the state of Michigan,” said Kim James, director of marijuana ventures and entrepreneurship at Detroit’s Civil Rights, Inclusion & Opportunity (CRIO) Department.
“In March of 2022, the state of Michigan gave $56,000 for each facility for municipalities, so if you have 10, you will get $560,000. And so, we’re poised to receive about $7 million a year in revenue sharing once we are able to license adult use retail.”
There is a total of 235 limited retail licenses made available on a rolling basis in three application periods. Seventy-five limited licenses are open for medical marijuana provisioning centers applications.
Currently, the provisions allow for 30 equity-based retailers and 30 non-equity micro-businesses and consumption lounges to be approved at a time.
Michael Webster is an early alum of the Detroit Cannabis Project and self-proclaimed program ambassador. After matriculating, Webster is now the founder and managing member of Exspiravit LLC, a licensed cannabis event organizer.
“We found since becoming operational in the last six months or so, that the market has changed,” said Webster.
“The normalization of consumption is actually catching up with our business model…the sexiness is wearing off the traditional markets of an open-air space event with a stage and thousands of people with artists on stage, and everyone consumes. It’s evolving. And Detroit may not realize it, but it’s ahead of the game.”
Webster moved from New York to Detroit a few years ago after waiting unsuccessfully for the cannabis market on the east coast to mature. The social equity initiatives provided for entrepreneurs in Michigan attracted Webster to try his luck here.
“It looks like I bet on the right market,” said Webster. “It’s the third-largest market in the country and one of only three states in the country that regulates the [cannabis] consumption space. That’s Alaska, California and Michigan.”
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