Is Cannabis Equity in Florida a Pipe Dream?
This story is second in a four-part series about cannabis equity in America. The USC Annenberg Center for Health Journalism’s 2021 National Fellowship supported reporting for this project.
Other stories in this series are:
Part 1: Legal Cannabis Opens a Pandora’s Box of Equity Issues
Part 3: Who Are We Talking About When We Talk About Black-Market Marijuana?
Part 4: The Rocky Road for Black Cannabis Entrepreneurs, Past and Present
Illustration by Define Urban
This story is second in a four-part series about cannabis equity in America. Read part one here.
Cannabis is fully legal — parks, restaurants, hotel rooms, and federally subsidized housing aside — in just 18 states plus Washington, D.C. This state of the states is where America’s 350,000 yearly weed arrests come from.
Even in free jurisdictions, prohibition-based regulations keep weed availability unstable and influence cannabis policy in places where the drug is, on a certain level, legal.
Which returns us to Florida (population: 21.5 million), where slightly more than 600,000 patients can receive medical marijuana — and multiple millions can cop in the street. On the northern Florida panhandle sits Gadsden County, where Trulieve is headquartered.
The company reported revenues of $224.09 million and net income of $18.62 million in the third quarter of 2021. Publicly traded on the Canadian Securities Exchange and on over-the-counter markets in the U.S., Trulieve stock closed at $29.30 as of Jan. 19.
Trulieve not only sells half of the Sunshine State-approved Mary Jane, it operates 163 dispensaries nationwide. In October, the company purchased Arizona multistate operator Harvest, copping 22 Florida licenses in the process, to become the nation’s largest cannabis company. Unless Amazon swoops in to own the delivery game between now and publication, this is the biggest deal in the licensed market.
Florida legalization activist and political consultant Ben Pollara told me: “Trulieve is medical marijuana in Florida.”
Prohibition-based regulations keep weed availability unstable and influence cannabis policy in places where the drug is, on a certain level, legal.
CEO Kim Rivers is a lawyer whose specialty was mergers and acquisitions. Cannabis insiders have in mind Trulieve when discussing shitty weed as a probable consequence of corporate pot’s looming dominance.
Rivers’ husband J.T. Burnette, a prominent real estate developer, was scheduled to report to prison on Jan. 23. After years of being investigated over his political connections, Burnette was convicted of bribery and sentenced to three years of incarceration.
Trulieve and its top executive are not part of the case that sent Rivers’ husband to federal prison. It does confirm a widely held belief that multistate operators (MSOs) power statehouse and city hall conversations:
With the feds punting on legalization, they largely set state and local policy through intense lobbying and political contributions.
Speaking of the legal marijuana market, Bonita Money of the National Diversity & Inclusion Alliance (NDICA) said that MSOs “are trying to control everything. They’re tied in politically, so that they get first dibs on all licenses.
“By the time they do give opportunity to anybody else, whether it be on a social equity level or a general level, it doesn’t matter — those licenses are basically allotted.”
Most of the weed that Orlando tourists and Miami rappers alike smoke comes from Colorado, Oregon and California. Six hundred thousand patients get a pass.
In keeping street weed practically the only kind available, Florida allows cannabis to be lumped in and trafficked with coke, smack, fentanyl and I assume bath salts in one nothing-to-see-here tire fire.
A Brief History of Weed World
It’s reasonable to blame the cannabis chaos on our Washington leadership vacuum. The federal bill called the MORE Act, which would have ended the federal ban on marijuana, keeps threatening to emerge from congressional committee status. In December 2020, it passed the House but stalled in the Senate. A new legislative approach is underway.
As the son of a litigant in Pigford v. Glickman, in which it was established that the USDA had engaged in systemic loan discrimination against Black growers, Howard Gunn, for one, isn’t holding his breath waiting for the feds to do right.
To understand the predicament in which Gunn found himself, it’s important to know his state’s history with the drug. And to comprehend Florida’s relationship to the drug is to begin understanding America’s prohibition history.
In his book Reefer Madness: The History of Marijuana in America, author Larry “Ratso” Sloman writes that in 1933 the Tampa Bay Times called for banning the cannabis plant after 21-year-old Victor Licata murdered his parents with an ax.
Quoting unnamed sources, initial press reports claimed the accused killer was six months into a “marihuana” addiction. Turns out that Licata had a far longer history of mental illness.
Still, the Times called for the prohibition of cannabis. Under the headline “Stop the Murderous Smoke” it asserted that whether “or not the poisonous mind-wrecking weed is mainly accountable for the tragedy its sale should not be and should never have been permitted here or elsewhere.”
For nearly two decades Florida and all of the United States along with it would press cannabis to the margins of society, criminalizing consciousness and countless Black and Brown people who reminded law enforcement of the racist sentiments federal anti-pot czar Harry Anslinger had uttered not so long ago.
Black street weed dealers were the low hanging fruit in a law enforcement culture.
But then came the ’60s and the first cannabis revolution. Not wholly unlike our quarantine awakening, the young populace began questioning their relationship to work. To their political leaders and to the war machine.
They did not do these things in private. President Richard Nixon had a response. In 1994, Dan Baum got Nixon aide John Erhlictman to tell him:
The Nixon campaign in 1968 and the Nixon White House after that had two enemies: the antiwar left and Black people. You know what I’m saying? We knew we couldn’t make it illegal to be against the war or to be Black, but getting the public to associate the hippies with marijuana and Blacks with heroin, and then criminalizing both heavily, we could disrupt those communities.
The War on Drugs officially began in October 1970 as the Comprehensive Drug Abuse Prevention and Control Act. Later, as heroin was supplanted by crack cocaine, President Ronald Reagan ramped up the war. Cannabis purveyors and consumers were caught up in the drug dragnet by the tens of thousands.
Black street weed dealers were the low hanging fruit in a law enforcement culture.
That’s why the least powerful people in cannabis cannot in good conscience be allowed to remain marginal.
“You would think we learned last summer, but we didn’t,” said Mary Pryor, a New York cannabis activist.
“We deal with a lot of really horrific and problematic circumstances as people of color — in ways that have been detrimental and hurtful,” she said. “Consumerism, utilizing Black and brown, you know, melanated cultures to enhance the marketability of some products.”
Black people in legal cannabis flirt with ubiquity in cannabis adverts, and have high visibility in both dispensary storefronts and delivery missions. Or, like the rappers who act as company faces, they’re fronting for a brand and receiving a licensing fee, not ownership.
The Corporate Weed Grab
The word “cartel” is bandied about among activists in discussing Florida med companies’ business comportment. In the broader context, it seems the wrong crime metaphor.
Tallahassee pols and Trulieve lobbyists are nowhere near alone in collaborating on statutes all but built for abuse and manipulation.
What some Black activists call “sharecropper” statutes are standard in current social equity policy. These rules allow large companies access to lusted-after priority licensing if they agree to support financially or via incubation a social equity entrepreneur.
Here are some examples of how sharecropping undermines the true goals of social equity.
- Connecticut — a state with only four licensed growers — just passed a statute that offers current medical license holders “equity joint venture” opportunities.That’s early access to its forthcoming market, even before equity applicants are issued licenses. But only if these cultivators pay money into an equity fund and incubate with designated equity entrepreneurs.
“This pay-to-play model will always be vulnerable to manipulation and abuse,” says Dasheeda Dawson, cannabis program supervisor for the city of Portland, Oregon. Dawson is also chair of the Cannabis Regulators of Color coalition.
- Alexis Bronson, a San Francisco equity license qualifier, put up 40% ownership of his dispensary to go into the partnership with High Times — that’s right, they sell weed now — and learned through reporters’ calls that his company had been sold to a larger company called Harvest.
Yes, the same Harvest that’s now a Trulieve tentpole.
In an era of high taxes and tight profit margins, social equity is in some quarters — legal and illegal — regarded as an albatross or, at best, a chess piece.
Other statutes are less overtly exclusionary than sharecropper policies.
- North Carolina is presently trying to pass its Compassionate Care Act for med. If made law, state policy will be to do business only with operators who have five years of out-of-state experience. That’s in addition to a $50,000 application fee.
Shaleen Title, author of Fair and Square: How to Effectively Incorporate Social Equity Into Cannabis Laws and Regulations, messaged me that by “disqualifying anyone who doesn’t have out-of-state cannabis experience, it would go toward ensuring that no local social equity operator could truly be independent and able to control their own company.”
All in all, there’s manipulation, abuse and, more prevalently, a general air of condescension, of a kind. In an era of high taxes and tight profit margins, social equity is in some quarters — legal and illegal — regarded as an albatross or, at best, a chess piece.
Entrepreneur and former New York Knicks forward Al Harrington suggests that the business culture around government Mary Jane and equity has needed examination. “I have meetings I go into with MSOs,” Harrington said during a podcast I co-hosted in 2019, “and the one Black guy who works in the office they’re like, ‘C’mon, c’mon. Come to the meeting!’ And then they just sit in the meeting and don’t say anything.
“It’s very popular,” he said, “to have a token Black guy around.”
This was nearly three years ago, 21 in cannabis years. At minimum, America’s visibly shifted racial climate has made white legal weed traffickers be more slick.
Weed Equity, The Show
Wally Wong is an immigrant son, born of Jamaican and Chinese heritage. Loves him some L.A. And diversity is so much Wong’s jam that he focused on it in Hollywood. From 2016-2018 he was co-chair of the Asian American Writers Committee of the Writers Guild of America. Now he’s founder of the cannabis equity activist coalition Working Group.
As California’s equity licenses were about to go into effect four years ago, Wong saw well-connected entrepreneurs undermine the diversity effort.
“I was actually in a backroom deal in South Central Los Angeles, with a Canadian company coming in, and they were buying equity stakes from an existing license.
“They’d flown in a gentleman from Toronto, with his family — never lived in Los Angeles — to take over this dispensary.
“This is what you see when people make the call to get into this space. They’re trying to make a move. They’re trying to jump the market.”
“In the cannabis industry, as with every kind of industry, there’s an urge to limit competition.”
~ Daniel Delaney, cannabis lobbyist
It can take from five to seven years for a state to go from adopting med to decriminalizing it to full legalization.
“They’re trying to call it right before the recreational framework gets set up, so that they can have a stake in the existing medical,” Wong said.
That’s one way that the intentions of cannabis equity are undermined. Of the sharecropping shenanigans, the most infamous features legendary Seattle Sonics power forward Shawn Kemp. Last October a press release went out claiming Kemp was Washington state’s first Black owner of a cannabis company.
Days later, the company had to acknowledge that Kemp is not the majority owner. In fact, he owns 5% of Shawn Kemp’s Cannabis.
Critics have also taken aim at dodgy, Black-led partnership agreements.
Most of the undermining of cannabis equity, however, never sees the light of print.
Said Howard Gunn: “These hedge fund guys with all of this money, they’re the ones controlling the marijuana business throughout the United States and the other parts of the world.”
Where Weed Is Heading?
The coronavirus transformed prohibitionists into open stoners in the space of a shutdown. So, let’s say it, plain: Overpoliced communities haven’t been missing any meals in the wake of the weed wave that’s sweeping the nation. The game has changed, but unlicensed growers and dealers and brokers are eating better than many, many dispensary owners.
Not like multistate operators, not long term. Not like Canadian market investors, who are aiming to get that NFL-level money.
“In the cannabis industry, as with every kind of industry, there’s an urge to limit competition,” said Daniel Delaney, who’s Black and works as a cannabis lobbyist in Massachusetts. Alone in his class.
Weed activists are the diverse people seen pushing for progressive policies at your city or town level. Lobbyists are those people in suits toggling between cannabis company exec offices and your state legislature.
Delaney sees weed bottom lines and structural, rather than strategic, racism propelling white dominance. Despite this plant’s mainstreaming popularity, the lack of funds finding their way to marginalized entrepreneurs makes sense.
“It’s just the fact that it’s very hard to get off the ground in the super-expensive, sort of novelty industry if you’re getting in at the mom-and-pop level,” Delaney said. And because the friends-and-family fundraising model followed by most cannabis start-ups tends toward malfunction in Black America, multistate operators like Trulieve need to take a larger role.
“There needs to be more active incubator nurturing of the minority-owned companies,” Delaney adds. “The big multistates should be encouraged to do partnering. Mentoring is great, but from what I’ve seen in Massachusetts, they’re already confident business people.
“They need access to capital, to some of the network of expertise.”
Or, as Nishant Reddy, owner of A Golden State dispensaries and co-founder of Satya Capital, a privately held investment firm, asked: “The people who are running this shit — what’s in it for them?”
Reddy’s question is an answer. I asked the financier and CEO of A Golden State — retailers of California’s most expensive bud — if we might achieve meaningful equity, rather than performing theater based on this drug culture’s impulses toward empathy.
“Maybe that’s a little bit of a callous answer, but I don’t think they’re really trying to get granular to understand how you make an actual social impact into these communities. How do you make it just not theater?”
So, I emailed Trulieve’s CEO some questions:
- I understand that social equity isn’t much of a conversation in Florida. How does that impact the way you interact in Tallahassee over issues you might address differently in other states?
- Is there a Black/minority/overpoliced ownership agenda within Trulieve?
- Are you familiar with Howard Gunn and the planned license set-aside for Black farmers? Do you look at the license as Florida’s version of social equity?
- Can you see a day in Florida when actual Black weed-growing talent is brought into the legal weed mix?
- The license proposal was initially brought up four years ago. What’s your take on the delay?
- Though worded somewhat differently, I asked what Trulieve will do when the surging, San Francisco-based multistate operator Cookies comes with its loud-and-proud commitment to social equity?
Kim Rivers declined to respond to interview requests for this story, even after requesting that I turn my phone interview into an email Q&A. Which I agreed to.
Her publicity firm did send this statement:
Trulieve has a national community outreach program centered around our core values of diversity, equity and inclusion. Its purpose is to bring awareness to the power of medical cannabis through education and community enrichment. The Company actively programs and participates in expungement clinics, as well as supports with scholarships and internships at HBCUs. Trulieve also has worked with organizations including Last Prisoner Project, National Hispanic Cannabis Council and Minorities 4 Medical Marijuana, to name a few. Last year through their Freedom Pre-Roll campaign, they raised over $40k for Last Prisoner Project, and donated $35k to Thurgood Marshall [College Fund] for scholarships and internships.
Not every congregation member at Clearwater Missionary Baptist Church is fully down with Gunn’s big pot campaign. He’s quick to remind that it’s not recreational weed that he’s supporting. Were today a day in, say, 2011, one would not have found a plurality of parishioners.
“There is a stigma there,” Gunn said.
But science and circumstances have changed.
“There are some who can see that anything that can substitute for these opioids, they’re willing to go that route.” In fact some of them were part of a Zoom conference that he arranged with the leaders over at Florida A&M University.
“All plants have a value, if you know how to use them,” according to Gunn.
Whether or not the congregants are in or out, the pastor is in the mix for Florida’s cannabis future. The state will decide which Black operator will be granted a medical marijuana license in March.
[This article was originally published by Capital & Main.]