Four Essential Ways Cannabis Retailers Can Be At The Forefront Of Social Equity

By Keith Stephenson, Founder & CEO of Purple Heart

As cannabis retailers, we often serve as the only advocates for the industry in many communities. Several of us have also forged deep connections with our local customers, which means we have a unique responsibility to leverage our resources to ensure that the legal market is as accessible and inclusive as possible. 

As a vocal cannabis advocate and entrepreneur, I have been championing social equity policies in my own city of Oakland since 2009. To me, equity in the regulated industry means giving individuals who come from marginalized communities impacted by the War on Drugs an opportunity to flourish. While the fight for equitable policies at the local, state and national level has been a long and arduous process, I believe private local businesses can take it upon themselves to bridge key equity gaps by proactively implementing hiring, retail and corporate social responsibility initiatives that uplift marginalized communities.

Hire locally and internationally

As a business owner, it’s imperative to lead by example through inclusive recruiting. This means hiring BIPOC, LGBTQIA and female applicants for positions outside of just security and human resources roles. The War on Drugs continues to disproportionately target individuals from Black and Latino communities, and they must have a prominent seat at the table in the retail space.

At Purple Heart, BIPOC employees make up nearly 80% of our staff. We hire from our surrounding neighborhoods through word of mouth and accessible, cannabis-friendly recruiting platforms like Indeed. To retain these talented individuals, we also believe it is important to not only pay them a living wage but also offer promotions based on what employees can learn. 

When you train your staff with efficiency and proficiency in mind and provide them with constructive opportunities to learn new skills, they are more likely to rise to the top. Ultimately, minorities can, and should, have visible roles in day-to-day retail operations as managers, buyers and budtenders.  

Invest in your employees’ long-term growth

Understandably, every growing business has a finite amount of resources, especially in this capital-intensive industry. But as a longtime cannabis entrepreneur, I’ve seen firsthand how investing in human capital through extensive job training and even tuition reimbursement generates lasting returns for my own business and employees.

Training up staff to positions of management not only empowers your employees but also benefits the workflow and reputation of your retail business. At Purple Heart, we train our staff to a point where they can eventually make authoritative decisions on behalf of the store. Better yet, many managers acquire the skills to become cannabis entrepreneurs themselves one day. 

If it’s within the means of a retailer, they should also consider offering tuition reimbursement to provide motivated employees with opportunities to become more involved in the industry and apply their newfound expertise to everyday business operations. Over the past few years, Purple Heart has extended staff tuition reimbursements at Oaksterdam University, America’s first cannabis trade school. This opportunity has allowed our employees to not only gain deeper insights into the plant but also better serve our patients and customers.

Comprehensive training is critical, especially in this ever-evolving industry. Offering continued training attracts and retains top talent and also fosters creativity, drive and entrepreneurship internally.  

Prioritize shelf space for minority-owned brands

Retailers charging slotting fees has become an increasingly common practice in California. Currently, brands can be asked to pay $500 to $15,000 a month just for shelf space. For smaller, minority-owned brands, these fees can be a significant barrier to entry, even if it is part of the cost of doing business. 

From what I’ve seen, roughly half of California retailers charge a slotting fee and approximately less than 2% of shelf space in the state is specifically allocated to minority brands. Before Purple Heart temporarily closed due to two burglaries last year, we set an internal policy to not charge minority-owned brands slotting fees and allowed them to reach out to us for shelf space. 

After an intensive vetting process to make sure that their products are compliant with state regulations, we provide these brands with shelf space and let our own customers determine what place they hold. So far, our minority-owned brands have done extremely well and have the potential to become established brand leaders in this market. In many instances, retailers are the gatekeepers for brands and they should use their influence to elevate minority businesses instead of shutting them out. 

Make donations to organizations that uplift minority communities 

Running a cannabis business is expensive and demanding, and charitable donations can often be an afterthought. However, a well-thought out donation of any amount can create impactful community partnerships. 

Before our temporary closure, we donated between $500 to $10,000 every month to local youth organizations including Oakland Natives Give Back, Oakland School of the Arts, and Youth UpRising. The War on Drugs had devastating effects in Oakland, and investing in the next generation of artists and leaders is one of the most effective ways to revitalize this dynamic community. 

For retailers that aren’t in a position to offer financial support, providing business knowledge to under-represented entrepreneurs is another way to provide tangible access to the industry. I’ve come to learn that when you have the resources to make your local community more robust and understand the social impact of these contributions, giving becomes a joy and a privilege.

It’s on public and private entities to eliminate barriers

Progress on the social equity front is possible when private businesses and policymakers come together to eliminate financial and social barriers to entry. As retailers, we have a chance to bridge the gap and even offer an economic lifeline to brands owned by under-represented business owners.   

Ultimately, we can’t do this without the support of local and federal lawmakers. Making charitable donations, investing in our staff and offering free shelf space is still extremely difficult when we face prohibitively high operating costs. Retailers can be better social equity partners when we have access to mainstream financial services and aren’t bogged down by exorbitant taxes.

Currently, legal retailers in California are paying over 50% in taxes, including 280e costs in addition to state and municipal taxes. Regulators must ease this enormous burden so cannabis retailers can reinvest their profits to scale  and create more business opportunities for minority-owned brands. Cannabis businesses have openly expressed their willingness to create a more equitable industry, but we can only accomplish so much without our elected officials fighting alongside us. 

Benzinga's Related Links:

• Cannabis And Social Equity: Challenges And Opportunities | Benzinga
• Why Social Equity Matters For Cannabis, And What States Are Doing About It