Power Players: 4thMVMT CEO Karim Webb’s “Enterprise Approach” to Equity
Cannabis has a history problem. The industry operates atop the ongoing racial disparities of the war on drugs. Yet the Black and Latinx communities hardest hit by marijuana prohibition have struggled to gain a foothold in the burgeoning legal industry.
Karim Webb thinks capitalism is the answer. A former Buffalo Wild Wings franchisee in south Los Angeles, he started 4thMVMT to empower minority cannabis entrepreneurs. The name references Dr. Martin Luther King Jr.’s fight for Black economic empowerment.
The plan is for 4thMVMT to operate largely like a restaurant franchise: Entrepreneurs receive training and financial support so they can compete on the open market. He talked to WeedWeek about his “enterprise approach” to equity, how the company will tell its story and how recent protests have accelerated the business. For a longer conversation with Webb, check out this March 2020 episode of the WeedWeek podcast.
This interview has been edited for length and clarity.
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“You’ve got to have some real skill”
WeedWeek: What is 4thMVMT and how does it work?
Karim Webb: 4thMVMT is a business set up to navigate the cannabis equity opportunity, in a way that allows people on our platform to live equitably in our country. [The goal is to obtain cannabis licenses] and leverage them to have best in class businesses that will drive a significant amount of revenue and improve their [life] outcomes,. That includes their health outcomes, educational attainment for themselves and their family, their household income and ultimately net worth.
WW: How is your approach different from some of the other equity initiatives out there?
KW: It’s a for-profit business. We live in a capitalistic democracy, so you’ve got to incent capital to want to be invested in an enterprise that can grow and scale competitively.
These are not hamburger stands or coffee shops, which are unlimited. [WIth cannabis] you’re in a limited license environment. Almost every jurisdiction has a certain number of these businesses that they’ll allow to exist.
So, it’s incumbent upon us to leverage every license to make it the most that it can be. In a retail environment, that means answering questions like: ‘Where is it located?’, ‘Who are the customers you attract?’, ‘What is your average check?’, ‘How much volume do you do, and how efficiently?’ You’ve got to have some real skill, and high character to operate the business and compete at the highest level.
WW: What’s the current status of the entrepreneurs under the 4thMVMT umbrella?
KW: We began training 120, 92 finished our yearlong program and 13 were successful in the licensing process.
WW: That’s in Los Angeles?
KW: That’s in Los Angeles. But there’s another 60 that we trained and 30 that applied in Illinois. Those licenses haven’t been awarded yet, so we don’t know how well our cohort has done. In L.A. the entrepreneurs who were successful will be together today, doing a town hall and gathering to express ourselves given the emotional nature of what we’ve all been experiencing the last few weeks.
WW: There have been so many delays with the L.A. market. When will your stores be able to open?
KW: Our goal is to get three of them open this year and the other 10 in 2021. We think that that’s probably going to happen. We’re waiting for [the OK from] city council so the Department of Cannabis Regulation can free us to move forward in the state licensing process.
Bridging the Gap
WW: How have the protests of recent weeks changed your thinking or approach?
KW: We’ve always known that what we’re doing, financing people, removing the barriers to business ownership, is something that’s transferable [outside cannabis.] We’re now getting calls from restaurant companies. I think there’s now conversations happening in businesses that weren’t previously happening. That’s something that we always anticipated would come. Even though we’re singularly focused on cannabis right now, I think some of those conversations have accelerated.
WW: You mean starting companies, potentially national chains, that would train entrepreneurs in the same way?
KW: Yeah, train them and finance them. We have the ability to bridge the gap between being a general manager and a franchisee, an operating partner.
Right now, there’s a greater question around equity and fairness and how we all exist in this country and how we have for the past 400 plus years. There are a lot of people talking about equity. Jobs are cool, but what about equity?
So if you haven’t imagined a model like ours, then we’re probably good folks to talk to about how you might create opportunities for people that weren’t part of your purview prior to the uprising that followed George Floyd’s murder.
WW: You emphasize that 4thMVMT is a capitalistic venture that’s going to win on the open market. How are you going to retail cannabis better than the folks that are doing it now?
KW: You’ve got to have a better customer experience from a technology perspective. You’ve got to be seamless. You’ve got to connect to delivery. It’s got to be friendlier. It’s got to be faster. It’s got to be clean. It’s got to be easy to use. The products have to be best in class, and you’ve got to tell a really effective story.
I think that’s one of the big differentiators. We haven’t seen a social equity platform at scale in retail. We’ve seen, in the Bay Area, a few units open. We’ve seen one or two in Massachusetts. In Maryland, people of color own dispensaries, but you really haven’t heard the story of social equity.
We’re going to be very loud. We think the story’s going to attract a lot of attention. We’ve got a lot of really significant influencers, some of the most powerful voices in the world, that are supporting what we’re up to.
Once we’re open and we’ve got proof of concept, we can unleash all of these allies to talk about what we’re doing. I think that’s going to drive a lot of traffic. It’s going to drive sales. As long as we execute, hopefully we will have earned loyalty.
Giving Consumers a Choice
WW: How will you tell that story?
KW: The story is on our web site. How we’re going to go about telling the story for 64 and Hope, our retail concept, is something our chief brand officer, Erica Grayson, is working on. It will involve each one of our operating partners, our social equity partners, and how each one of their individual stories weaves into a greater story. It recognizes that some white people want to spend their money in a way that helps this world be more equitable. It makes clear that you do have a choice, in terms of where you spend your money.
We’re going to be out front with our social equity partners, delivering a best in class experience that’s as good or better than anything else that people are experiencing in the retail space. We’re betting that people, given the choice, are going to choose to buy from us.
WW: Are you aware anyone else doing something similar to what you’re doing?
KW: No and I spend a good amount of time talking about social equity in New York, Michigan, Illinois and around the country. I’ve met with several of the other African-American dispensary owners and haven’t heard of anybody with the enterprise approach.