Jay-Z launches cannabis investment for minority-owned companies. The American rapper born Shawn Carter, has decided to leave a significant mark on the cannabis industry by creating a $10 million fund for startups, which is primarily targeted at people of color.
The cannabis industry is a multi-billion dollar industry which despite obvious restrictions, has grown massively, defying many odds. To find a foothold in the industry, new entrants and existing stakeholders obviously need to find a safe operating environment.
This is because there’s a wide variation in the laws governing the use of marijuana. Although this has been the case for several years, most brands and individuals are actively fighting for the legalization of marijuana.
In a state like California, access to marijuana is allowed to the public for both medical and recreational use. And while the sales and distribution of cannabis remains a federal crime, the industry has grown tremendously.
Jay-Z’s Effort to Support Minority-Owned Businesses
Jay-Z believes that most people who have missed out on the journey of cannabis in America are people of color. This does not mean that they have been denied access, but it’s instead referring to the lack of a significant share or longest to stakeholders in the industry.
Hence the need for a business initiative that offers them a chance to actively benefit from growing and dispensing marijuana.
In late January 2021, Jay-Z disclosed his intention to launch an initiative that provided investment funds to minority-owned cannabis startups in order to bolster Black participation in the industry.
The main reason behind why Jay-Z launches cannabis investment is in the hopes of giving minority-owned cannabis startups a level playing ground and also to usher in more Black participation in the cannabis industry.
The rapper told The Wall Street Journal (WSJ) that he is motivated by the imbalance in the marijuana business. Statistics show that people of color, who mostly have been disproportionately punished for involvement in drug-related issues, especially in places where it is illegal, account for just a fraction of those making money from the multibillion-dollar industry in legalized cannabis.
Jay-Z said, “We were the ones most negatively affected by the war on drugs, and America has turned around and created a business from it that’s worth billions,”. It is an unbelievable development, according to Jay-Z.
WSJ further reported that after 25 years of legalizing medical marijuana in California, the cannabis market has grown into a $20 billion legal business in the United States. And according to an estimate by the New York investment bank Cowen & Coprojections, it could surpass the $70 billion market for U.S. wine by 2030.
Making Cannabis Accessible To Everyone
Jay-Z noted that lots of Black people have struggled to access the lucrative cannabis market despite being far more likely than Whites to get arrested for cannabis possession. In 2017, a Marijuana Business Daily survey revealed that 81 percent of cannabis business owners and founders were whites, while only 4.3 percent were African-American.
But beyond pointing out the fact that minorities have borne the brunt of the law that kept the drug illegal more than the whites, by starting his $10 million funds, Jay-Z is joining a more significant push for an equitable economic opportunity in cannabis.
To date, only 36 states have legalized cannabis for medical or recreational use, according to the National Conference of State Legislatures. This creates a massive growth opportunity in the industry for a drug that’s still illegal under federal law.
The cannabis industry is composed of legal growers and producers, consumers, independent industrial standards bodies, dispensaries, researchers and regulators, and lots of ancillary products and services. This also relates to its industrial derivative, hemp.
The cannabis industry has excellent growth potential, but unfortunately, it has been inhibited by regulatory restrictions across the country. The United States alone has the capacity to grow the industry into a global force to be reckoned with. However, the legal market will continue to grow, albeit slowly, until it becomes legal to use cannabis, especially for medical and adult use.
One of the reasons why research has slowed down to almost a halt is because of the many regulatory restrictions which confine the products in the cannabis industry to specific locations. This is one of the reasons Jay-Z launched the investment initiative – to help advance the growth of the industry and market while also supporting Black-owned Minority enterprise.
The United States aims to achieve the accomplishments of countries like Uruguay. Uruguay was the first country to legalize recreational marijuana through legislation in December 2013. Canada also has joined the train by becoming the first country to legalize private sales of recreational marijuana in 2018.
The cannabis industry in America holds great social and economic potential, but a lot depends on the position of federal legislation and local support for the industry.