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Entrepreneur Will Cover Fees for Illinois Equity Applicants

Illinois Equity Cannabis Now
Photo Gracie Malley for Cannabis Now

Economics

Entrepreneur Will Cover Fees for Illinois Equity Applicants

Equity is still a myth in cannabis, but minority applicants in Illinois can get a leg up thanks to a Harvard-educated black entrepreneur.

To twist the hoary metaphor, teaching someone to fish is neither noble nor a life-sustaining act if the supply of fishing poles is constricted and available only to the super-rich or would-be pescetarians willing to dive deeply into fly-and-tackle debt.

In the same way, offering cannabis business licenses to working-class people, people of color, and others whose lives were most ruined by the War on Drugs — provided they can pay a “license application fee” they may not be able to afford — doesn’t do anything to “right the wrongs of the drug war,” as legalization promises. It’s just a reminder that legal cannabis exists in a world that remains deeply unequal, promises are worthless, and “social equity” in the marijuana industry remains just a good idea.

In Illinois, where state lawmakers legalized recreational cannabis earlier this year and where the first day of legal sales is Jan. 1, 2020, regulators will issue up to 75 “conditional dispensary licenses” by May 1. That means existing medical-marijuana businesses will have a large head start. It also means that anyone wishing to try to enter the cannabis game has to have $2,500 to potentially throw away on an application fee. For many, this sum is not insignificant.

Seke Ballard, a 35-year-old black entrepreneur with a Harvard MBA, gets this, and appears willing to do what government won’t. The founder of Seattle-based cannabis funding startup Good Tree Capital recently announced that he will offer low or no-interest loans in order to cover the $2,500 fee for up to 100 social-equity applicants in Illinois.

Applicants will be vetted and will have to pay the loan back at some point, but in addition to favorable and not predatory terms, they’ll also receive “the support and knowledge they need to submit complete, compelling applications,” as Ballard told the Chicago Sun-Times.

“We’re going to provide you with the capital,” he added, as per the paper. “We expect to be paid back, but we’re not trying to make a profit off of you.”

In this way, Ballard is hoping Illinois can avoid the fate of other states and end up with a cannabis industry funded and run by almost exclusively white males — at least some of whom wanted nothing to do with cannabis until it became the next hot (and profitable) thing.

Illinois has gone further than some states in offering “social-equity” licenses for would-be cannabis entrepreneurs who have been arrested or convicted of a cannabis-related offense or lived in an area “disproportionately impacted” by drug prohibition. In other states where cannabis is legal, such equity has come, if at all, thanks to city-run programs such as Oakland, California’s, but the state appears to have done a poor job of letting qualified applicants know this.

Ballard, who now lives in Chicago and has re-centered Good Tree’s focus on Illinois, recently hosted an informational session at Good Tree. During the session, it was discovered that good number of the individuals present did not know about funding and assistance available from the state. And as it is, Illinois will only cover half of an applicant’s permit fee, none of which is recoverable if the application is not successful.

A few presidential candidates have also flagged the cannabis industry’s pervasive, persistent, and glaring inequity problem. Public shame-jobs or subsequent legislation may yet correct the problem, but until they do, as in other areas, it appears the private sector will have to fill the gap.

“We’re not going to wait on the state,” Ballard said, according to the newspaper. “We’re not going to wait on the city.”

TELL US, would you like to enter the cannabis industry, but find that the costs are too challenging?

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