EXCLUSIVE: Across the US minority business owners struggle to compete in the cannabis industry. A new grant program in Portland aims to change that.
By Meg Ellis
Jan 24, 2019
In Oregon, the city of Portland awarded two $30,000 grants to African American-owned cannabis businesses on Monday.
Green Box, a subscription-based marijuana delivery service, and Green Hop, a marijuana retailer that offers apprenticeship opportunities for young African Americans, are the first two organizations to receive the award.
The grant program is meant to help promote equity in the cannabis industry by providing financial aid to companies owned by people who have been harmed by the hyper-criminalization of marijuana.
Portland is the first municipality to utilize tax revenue from their legalized recreational marijuana-use program to invest in “communities disproportionately harmed by cannabis criminalization,” Prosper Portland, the city’s economic development agency spearheading the Inclusive Business Resource Network program, touts on their Website.
Katherine Krajnak, Project Manager for the Economic Development Division of Prosper Portland, told PotNetwork in an exclusive interview that this grant program stems from the Portland community’s desire to ensure a more equitable playing field for people of color in the cannabis industry.
“The goal of the project is to reduce barriers by providing capital in the form of grants to businesses that have the potential to grow/scale, as well as provide technical assistance for those interested in starting a business in the [cannabis] industry,” Krajnak said.
How local organizations are helping to close the racially divided cannabis capital gap in Portland
Prosper Portland, the economic development agency selected to run the Inclusive Business Resource Network for the city of Portland, invests in locally run businesses. Specifically, businesses that are owned by people of color, immigrants, women founders, and other underrepresented minorities.
The Network serves over 600 businesses each year, and works to provide “A citywide program that brings multiple services for small business into a single network to provide greater efficiencies and cross-functional innovation.” These businesses which benefit from the Network partnership include cannabis businesses, as well.
“The cannabis industry has multiple barriers to entry such as a complex regulatory process and access to capital and that is exasperated for people of color, especially the black community,” Krajnak said.
African-Americans have historically struggled to secure the requisite financing to start their businesses. In an industry as steeped in over-criminalization as cannabis, Portland believes that these grant opportunities can help bridge what they call a “racially divided capital gap.”
“The grant was developed in the early part of 2018 with feedback from the Cannabis Tax Budget Advisory Committee convened by [City] Commissioners [Amanda] Fritz and [Chloe] Eudaly and our Inclusive Business Resource Network Partners,” Krajnak said. The Network Partners are listed on Prosper Portland’s Website.
In July 2018, Prosper Portland chose NuLeaf project to provide grant funds through the Cannabis Development Equity Program, a project that derived from community input and city cannabis tax allocations.
“Based on the input from the community via a process led by Commissioners Fritz and Eudaly, Prosper Portland issued a Request for Proposals for organizations to provide technical assistance and administer grants to POC-owned cannabis businesses.
“The NuLeaf Project was unanimously chosen from a field of six proposals due to their comprehensive program approach and industry experience,” Krajnak told PotNetwork.
Taxes from cannabis paying for opportunities in pot businesses
The two grants that Green Box and Green Hop received, respectively, were funded by the city of Portland.
The city earmarked $150,00 from cannabis tax revenues for re-investment purposes. Specifically, the funds would be used to assist minority-owned businesses in the cannabis industry.
The NuLeaf Project, a non-profit organization based out of Portland, was chosen in July 2018 by Prosper Portland to administer this grant program, called the Cannabis Business Development Equity Program.
With the start of this Program, Portland became the first government, city or otherwise, to invest cannabis tax revenue directly into the communities that have been most harmed by cannabis criminalization.
“We hope that this model of cash grants and technical assistance will shore up [person of color]-owned cannabis businesses to weather the volatility of the developing cannabis industry and allow greater access and lower barriers of entry into the cannabis industry for this disproportionately impacted by the prohibition of cannabis,” Krajnak said.
Co-Founder and Executive Director of the NuLeaf Project, Jeannette Ward-Horton, spoke with PotNetwork about NuLeaf, and the exciting opportunity to help promote businesses owned by black business owners.
“The first thing that is important for us to talk about in terms of this grant award is that it is not charity work. It’s not about us giving these companies charity. These [cannabis] businesses are already great businesses. These companies are diamonds! What we are doing is helping to provide venture capital that they would not otherwise receive.
“U.S. venture capital funding only goes to black businesses 1 percent of the time. If you’re talking about black-owned businesses, you’re only talking about 1 percent of real businesses. That forces POCs to go to what we call ‘the mom and dad’ bank, meaning that they’re reaching out to family and friends for venture capital loans.
“Cannabis companies require money from venture capital and private investments. NuLeaf gets to work with these businesses that have managed to survive in an incredibly competitive market. Oregon has a very competitive cannabis market, so these businesses have had to bootstrap, have had to grow, so that they survive in the cannabis industry. So these are phenomenal businesses. They are gems. They are diamonds,” Ward-Horton said.
How does the Cannabis Business Development Equity Program grant work?
Green Box and Green Hop were chosen through a competitive grant selection process which assessed business leadership, business models, and how grant funds would be utilized by applicants.
Through the Program, the winning business applicants received a $30,000 grant to scale and capture increased market share.
Founder and CEO of Green Box Adrian Wayman said in a statement: “As a 100 percent bootstrapped company, limited funding has inhibited our growth. The NuLeaf Project grant enables us to leap forward. It’s an unbelievable opportunity.”
In addition to the grant funds, Green Box and Green Hop will receive a 16 week-minimum professional development opportunity through NuLeaf, wherein participants will receive targeted advising meant to increase the entrepreneurs’ technical skills.
Ward-Horton told PotNetwork about the customized care that each grant recipient will receive through the grant funding.
“The development programs are really customized to the business. It’s like that woman who comes and fixes those salons, Tabitha?! ‘Tabitha Salons Takeover.’ [NuLeaf] takes a really customized approach for each organization that we work with,” Ward-Horton said.
“NuLeaf does a health assessment of your business, and we see where there is opportunity. Opportunity for growth, where we can help business owners build business opportunities, help them capture additional customers or enter other markets. We then use the grant money to fund whatever project that we identify as being most beneficial to the client’s business.
“If we see an opportunity to increase customer counts, that’s what we’ll put the money towards. The intention of the project is to get all of these businesses to scale, to get them to grow. We want to see a return on our investment; we really want to see these businesses grow. We’re not just cutting a check and running away from them,” Ward-Horton said.
The future of utilizing cannabis tax revenue to fund investment in cannabis businesses
Now that the grants have been awarded, potential pot entrepreneurs in Portland will have to wait and see if the city decides to make this an ongoing project.