Being a CEO in the marijuana business isn’t necessarily the powerful perch one might assume, especially for a person of color.
Just ask Dan Delaney.
As a lobbyist for the marijuana business since 2013, he has had a front-row seat into the evolution of the industry in Massachusetts. In 2016, one of the companies he represented asked him to step in as interim CEO. But there was a catch.
“My authority was very limited,” Delaney said. “I didn’t have a bank account. I didn’t have decision-making authority. I was the public face of a group where I didn’t have veto power over decisions.” Delaney lasted about nine months in the job.
He wasn’t surprised, not at all, by the latest Spotlight Team report detailing the issues for people of color seeking a piece of the action in the pot industry — and the efforts of well-financed, white-owned companies to hire people of color to serve as the faces of business over which they have questionable control.
When recreational marijuana became legal, Massachusetts became the first state to seek to include entrepreneurs from communities of color, where people had been prosecuted for years for selling weed.
That’s a worthy goal. But the barriers to entry are high. Banks won’t lend money to pot entrepreneurs because marijuana remains illegal under federal law. The industry is highly regulated — which means aspiring entrepreneurs need lobbyists, lawyers, and compliance officers — not to mention the capacity to produce or obtain the product. Getting a business off the ground costs millions, and not many minority entrepreneurs have millions of dollars lying around.
But there are super well-financed white-owned businesses happy to hire people of color to represent them in their efforts to get new licenses. Tito Jackson is one prominent example.
The former Boston city councilor, as the Spotlight Team reported, is the CEO of Verdant Medical, one of three companies vying for a license in Mattapan. He says once the nonprofit becomes a for-profit company, he will be its owner.
But his deal doesn’t sound much like ownership. Verdant is bankrolled by Sea Hunter Therapeutics, a major player with close ties to the Pulitzer publishing fortune. Besides putting up all the money for Verdant, it appointed its entire board of directors. When the Globe interviewed Jackson — who has been interviewed countless times in his life as a politician — Sea Hunter CEO Alexander Coleman was by his side.
As it happens, the company Delaney ran — but didn’t really run — was under a management agreement with a company owned by Sea Hunter. He found Jackson’s awkward description of his ownership telling.
“The first thing I hear when [Jackson] speaks is that it’s all in the future tense,” Delaney said. “It’s an aspirational claim.”
The recreational marijuana business is exploding, with dozens of stores likely to open in Massachusetts over the coming months. That schedule heavily favors the well-heeled and well-connected, the companies that can afford to shell out millions immediately. And it works against the small-business people who have been sold inflated promises about their chances of getting into the business.
If Massachusetts is serious about creating a marijuana industry that welcomes people whose communities have borne the brunt of mass incarceration, here’s the first step: Slow down.
“I don’t think you can be fast and equitable at the same time, and I don’t think anyone is being honest about that inherent tension,” Delaney told me.
But that alone won’t fix the problem. The state has to address its failure to keep huge companies from dominating the market , companies who expand their grip by financing smaller companies they essentially control. The regulations in place plainly don’t work.
The truth is, nobody knows whether the marijuana industry can be a force for social and economic justice. But if the state’s goals are ever going to be more than just talk, it’s time to get real about how to get there. Ownership in name only isn’t equity. It’s tokenism.