“This Industry Was Founded on our Backs:” Equity entrepreneurs seek capital
Oakland start-up Community Gardens wants to use its cannabis delivery software to help illicit market shoppers get legal products. Posh Green Collective aims to combine retail with a cannabis lounge and boutique hotel in San Francisco.
They’re two of the 10 minority-owned businesses who pitched investors in a virtual event Tuesday, seeking to grow in the almost entirely white-owned and run cannabis industry. Jurisdictions nationwide have committed to supporting cannabis entrepreneurs from communities hardest hit by war on drugs tactics, but so far, those efforts haven’t led to many success stories.
Cannabis’ quasi-legal status can complicate the disadvantages minority entrepreneurs already face in areas like trying to access capital. And that was before the pandemic which has pushed up costs and created new hurdles for all businesses.
Tuesday’s event marked the capstone of a private effort, the Momentum Project, a start-up accelerator sponsored by delivery platform Eaze with Ultranative and Bail Capital. The 10 participating businesses–already licensed and running–got $50,000 grants and took part in a 10-month mentorship program. They pitched to 34 investors on Tuesday, seeking funds to keep growing.
“We just want some of the market share” and ownership in the industry, NBA star Al Harrington, CEO and co-founder of cannabis company Viola, said between pitches. “This industry was founded on our backs.”
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The event’s celebrity speaker, Harrington stressed the need to ensure opportunities for people of color. His preferred method is start-up capital for entrepreneurs, rather than companies trying to add social equity efforts later. He blasted companies that have said they would reinvest but haven’t, or complained that taxes are too high to do so.
“We want to use our platforms to uplift our people,” Harrington said.
A Range of ideas
Most of the presenting companies sought funding in the hundreds of thousands of dollars or the low millions, offering equity in return.
Los Angeles-based Ciencia Labs seeks to target specific ailments with cannabis products. For starters, it would like to expand its “dreamt” product line which is marketed as a sleep aid. Oakland-based James Henry SF, a vertically-integrated CBD lifestyle brand, aims to build out its product portfolio so it can provide products for different types of consumers using at different times. NOUERA wants to create a social lounge in space it has secured in San Francisco’s Japantown.
Oakland-based Breeze Distro seeks to create small batch cannabis products, plus open a consumption lounge and manufacturing facility. LDLR looks to connect the sexual, beauty and cannabis markets with a range of products and a blog promoting healthy communication.
Vertically-integrated cannabis company New Life CA aims to bridge the gap between the legal and illegal markets by ensuring quality products at low prices. Greenbox PDX in Portland delivers boxes of premium cannabis products. Endo Industries looks to ensure a healthy clone supply for growers and plans a 3-acre nursery location.
“These are good investments,” especially since many consumers are eager to support equity businesses, Eaze spokesperson Elizabeth Ashford said. “All of them are ready for an infusion of capital.”