New $30M Fund Bankrolls Minority-Owned Cannabis Shops After Decades Of Disenfranchisement
Curio Wellness, a Maryland-based medical cannabis company, has created a $30M fund that will not only expand its market reach but promote ownership of cannabis dispensaries by women, minorities and disabled veterans.
Curio WMBE Fund will make investments in as many as 50 cannabis entrepreneurs looking to open Curio Wellness franchises. Under the terms of the investment, the WMBE proprietors will be majority owners from the get-go and be able to fully own their shops eventually, within as few as three years, Tech Crunch reports.
The fund first provides capital to franchisees to open Curio Wellness Centers, including the process of finding a location and employees, and obtaining the proper licenses, all of which can be capital-intensive and time-consuming.
Once a dispensary is up and running, the fund provides other kinds of support, such as in-store operations or sales and marketing. If a franchisee supported by the fund defaults, Curio WMBE Fund stipulates that they must be replaced by a minority or woman owner.
Curio Wellness had planned to open franchise stores this year, but the process has been delayed by the coronavirus pandemic. The company expects to start franchising stores, including those supported by the fund, in 2021.
"Diversity [is] at the heart of why [we] developed the fund," Curio WMBE Fund Managing Director Jerel Registre Curio told Bisnow. "The lack of diversity in the cannabis industry, especially among corporate leadership and ownership, is one of the most fundamental challenges facing the industry.
The percentage of minorities who hold executive positions at cannabis businesses is only 17%, and just over 5% of senior roles in the cannabis industry are occupied by female minorities, Registre said, citing Marijuana Business Daily data.
"While there have been some modest efforts at addressing the challenge, none of them have solved the underlying problem, which is access to capital," Registre said.
Even in states that adopted cannabis early, minority representation among owners is low. Out of more than 2,000 licensed dispensaries in Colorado, one of the first two states that legalized recreational cannabis in 2012, an estimated 20 or fewer are owned by Blacks and Hispanics, Insider reports.
As they have legalized cannabis, states have promised to provide licenses to minority-owned cannabis shops, but activists say the efforts are falling short.
“It makes no sense that again, in 2020, Gov. Pritzker, you have a Black lieutenant governor, you have a Black mayor of Chicago, you have a Black drug czar overseeing the marijuana industry here in Illinois, and you don’t have any Black-owned marijuana dispensaries?” community activist Tio Hardiman told CBS Chicago in September.
For its part, Curio Wellness has 40% female employees, and more than half its employees are minorities, out of a total of about 200, Registre said. Its management is 38% female, and 44% of them identify as a member of a minority group.