Legal weed can encourage business diversity, but only if customers are picky

By Jessica M. Soter

A new business opened Feb. 10 at 451 White Horse Pike in Waterford Township. For decades before that, that building housed financial institutions — First Union, Wachovia, then Wells Fargo — that hurt people and created wealth disparities, particularly with systemic racism against black and Hispanic mortgage customers.

Now, as holistic solutions, this building can literally be part of the solution. But that’s only if people buy legal cannabis from a dispensary owned by a black woman, instead of from big operators in different states.

New Jersey residents approved the recreational cannabis market for adults in November 2020 and sales began in April 2022. Holistic Solutions is the state’s first dispensary owned by a black woman. It currently serves the medical marijuana market and will soon open to the adult (recreational) use market.

The cannabis sales schedule put small businesses with different ownership at a disadvantage. Multistate dispensary operators flooded the market because their capital and connections allowed them to launch quickly with little competition, building a $200 million lead since recreational marijuana became available to a market dominated by big, white-owned businesses. It’s business as usual. Business as usual perpetuates inequality in profitable industries. Business as usual creates monopolies and high prices. Business as usual will not lead to a socially just cannabis market in New Jersey.

Consumers can disrupt business as usual by deliberately targeting where they spend their money. In New Jersey, entrepreneurs who are racial minorities are supposed to be priority applicants for a license to sell cannabis, due to unfair drug laws and policies that disproportionately harm black, indigenous, and people of color and their families. But data from other states that opened adult-use markets before New Jersey often did not reap the benefits of license priority because of regulatory hurdles and existing market competition.

You can choose to support new local dispensaries as they start up in New Jersey, especially when they are owned by priority licensees. Suzanne Nickelson, owner of Holistic Solutions, features products from local New Jersey farmers and women-owned national brands.

Despite little evidence that legal cannabis sales have a negative impact on youth, justice systems, the economy, or public health, a stigma against cannabis remains that can be multiplied for priority candidates, including black and brown entrepreneurs. Municipal councils and review authorities regulate zoning for physical sales and acreage, and in South Jersey this may include additional reviews for effects on Pinelands, wetlands and farmland. Additionally, small cannabis businesses, whether minority-owned or not, face major hurdles in the banking and traditional credit markets due to federal bans on operating cannabis operations. This puts them at a higher risk of having to use predatory services with hidden costs and fees.

Communities can choose to make decisions without bias and welcome small marijuana businesses with diverse ownership that will support social justice and generational wealth. This includes dispensaries, cultivators and salons for future consumption.

New Jersey’s cannabis market is growing and is expected to reach $2 billion to $3 billion in five years. This will certainly create wealth for multi-country operators, but we can also build a profitable industry that embraces small businesses of varying ownership. If you choose to buy legal cannabis, choose a priority licensee. If you decide to be a part of the cannabis industry, work for a minority-owned business, such as a black woman.

Jessica M. Souter is Associate Professor of Sociology at Saint Joseph’s University. She writes from Evesham Township. She has no financial interest or employment relationship with Holistic Solutions.

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