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High hopes: Will 'cannabusiness' turn around deprived communities?

News Service
14:41 - 24/04/2019 Wednesday
Update: 14:43 - 24/04/2019 Wednesday
REUTERS
A visitor poses for a photo during the first day of the annual Cannabis Expo in Mexico City, March 30, 2019. REUTERS/Edgard Garrido
A visitor poses for a photo during the first day of the annual Cannabis Expo in Mexico City, March 30, 2019. REUTERS/Edgard Garrido

BEST WEED

Caddie lives in Ruatoria, a remote town on the northern tip of New Zealand, where 94 percent of people are Maori, with one of the country's highest unemployment rates, according to 2013 government census data.

Its green rolling hills earned an unofficial reputation for growing New Zealand's best weed after a Rastafarian community settled there in the 1960s.

Caddie and his business partner Panapa Ehau, spotted an opportunity in 2017 to tap into this local expertise and grow legal cannabis, offering locals the chance to buy shares in Hikurangi Cannabis through a crowdfunding campaign.

"We tried to emphasise to people how risky it was," said Caddie, "because there are no guarantees, but those people who put money in were prepared to do so and it was quite humbling."

Several locals dipped into their savings and pensions to buy a stake, with about NZ$2.4 million ($1.59 million) raised in total to back the company, which has yet to make a profit.

While health impact of legalisation is fiercely debated around the world, Caddie is optimistic that it could create jobs and money and keep some people out of prison, while the risk of addiction to medical products like lozenges and balms is low.

Although Maori only make up 15 percent of New Zealand's population, more than 50 percent of prisoners are Maori, according to the Department of Corrections, which runs prisons.

Half of Hikurangi Cannabis' 25 staff are Maori, including four Maori growers. The company - now valued at NZ$30 million after receiving further investment - is training more, with the aim of having 100 staff by the end of next year, Caddie said.

"If there is a way to grow the plant they love and do it legally, they are super keen on that," he said. OPPORTUNITY

In the United States, black and Latino communities that have been criminalised for decades for illegally selling weed are also keen to benefit from the marijuana boom.

The Food and Drug Administration is holding a public hearing about the sale of cannabis after the December legalisation of the commercial production of hemp - a type of cannabis plant with no or little THC, the ingredient which makes users "high".

It is unclear whether the entire plant will be legalised at federal level but several states may fully legalise marijuana this year.

Marginalised minorities risk being shut out from the emerging industry due to a ban on licensing people with criminal records to grow or distribute the crop, as well as high startup costs and regulations on the type of property to be used.

"People that were once convicted for crimes that are no longer considered crimes need to have a platform to get involved in cannabis," said Jessica Steinberg, managing director of the Global C, a consultancy firm for cannabis businesses.

Eight in 10 people who launched a cannabis business or have an ownership stake in a marijuana company are white, according to a survey by Marijuana Business Daily, a U.S. news site.

Only six out of 10 Americans are white, census data shows.

"There is this opportunity to create and shape an industry the way it should be - with balance and equity - but that is not necessarily the reality," said Steinberg.

The People's Dispensary, a social enterprise that sells cannabis for medical and recreational use in California and Oregon, aims to do just that.

Founded in 2016, the dispensary - which has two stores and aims to open five more by 2020 - helps poor locals and ex-convicts who might struggle to access capital, start cannabis businesses with loans and grants.

Customers can also invest between $1,000 and $50,000 at their local dispensary in return for equity, and 10 percent of profits go into community initiatives, such as cookery classes and donations to homeless people.

"There is no way we could make all of this money and not give back to our communities ... which have been overly policed, overly incarcerated, because of prohibition," said Christine De La Rosa, chief executive of The People's Dispensary.

But opening up the legal cannabis industry to marginalised communities is not just about doing good - it also makes good business sense, said De La Rosa, who used cannabis to treat her lupus, an autoimmune disease which almost killed her.

"People on lower incomes spend more on cannabis ... If you don't pay attention to people of colour, the formerly incarcerated and women, you are going to lose," said De La Rosa.

"Because I'm a person of colour, I'm part of that underserved community, and I know that underserved community would rather come to me."

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5 years ago