By Sarah Agboola
I remember 2017 like it was yesterday. How could I forget the sheer excitement about finally being able to position myself to work and make an impact in the legal cannabis industry? Name a cannabis seminar or conference, and you would more than likely find me there front and center. Soaking up all the info, building my network, and establishing my brand. Having the opportunity to own and operate a manufacturing and distribution company in the legal market was a dream come true for me. Surely this would be my exit from the hustle and bustle of Corporate America. My introduction to building something of my own that would build generational wealth while serving the community. Holding a license meant I could employ others and do the continuous work to remove the stigma. In many ways, I wanted to correct the wrongs that came with the War on Drugs that targeted communities of people that look just like me.
I had high hopes of owning and operating my company in the city of Los Angeles. Unfortunately, many of those hopes and dreams were crushed as I navigated the licensing process. I saw the ugly side of backroom deals, predatory partnerships, and complicated licensing and application processes.
This is the story of a Black woman who has sacrificed money, health, and family to build a dream in a thriving industry that still makes it difficult for us to succeed.
This is my story
I did everything right, or at least I thought I did. I spent most of 2017 registering the business, hiring an attorney (this is not the industry to be in without consistent legal representation), creating my pitch, and outlining financial projections. There was no way I was going to fail.
Little did I know, there was nothing that could have prepared me for the constant disappointments, moving timelines, and failed expectations. The first sign of trouble came when the California application submission was delayed for nearly eight months. Sure, I was a little upset, but I was certain that the time and money I invested would work to my benefit. I used the spare time to pitch to potential investors, update the business plan, and share my vision. I wanted to create quality infused cannabis products that would line the shelves of dispensaries and eventually sell to the masses. This was my dream, and there was no way I was about to quit.
2018 bought more challenges than an Olympic obstacle course. In addition to the delayed process, I was experiencing some health issues due to the constant stress that comes when building a licensed cannabis company in Los Angeles, CA. By December of that year, I had exhausted over $150k from my savings and my family, took to crashing on my Aunt’s couch, and suffered a cardiac arrest. Finally, there was a light at the end of the tunnel. I was awarded my temporary license on December 28, 2018.
This is it; I had finally made it past the hard part. At least that is what I kept telling myself. It seemed like obtaining additional investors would be a breeze now that I officially had a temporary license. I could not have been more wrong. I carved out a niche in the market to provide clean green, certified cannabis (the good stuff). Due to the higher price point and specific market audience, investors were reluctant. While I saw the potential to create a brand to saturate the mass market and produce multiple infused products, investors saw it differently. Although I have a corporate background, have proven financial integrity, and pitched a business plan with projected financials it just didn’t seem to be enough. I was told constantly that I needed to give up 50% or more of equity. That I had to relinquish all control and couldn’t have any decision-making power and to just leave it up to “them”. Essentially, they wanted to potentially work with me only if it meant usage of my license with no buy-in and complete takeover.
I wish I could say that most of my opposition was coming from my white counterparts. Unfortunately, this was also coming from my own.
As a result of the delayed timelines and ever-changing cannabis regulations, “help” groups started forming to support, advocate, and gather real-time information. There were now groups of black business people offering to help but they also presented predatory deals that would surely leave me high and dry. I saw white men and women forming their groups as I was left “group less” with the realization that no one was fighting for me or lending support to our Black Women, much less an Afro-Latina.
I spoke with everyone from retired athletes to doctors, and they only wanted to invest in businesses owned by my white counterparts or black men. I found it interesting as some of these companies (almost all run by White men) were burning through cash, buying unnecessary luxuries and new homes. And these were the smart ones to be trusted? I could only laugh, but hey, they got the money.
I wanted people to invest in me that believed in my vision and capabilities, but that was not enough in my case. Thankfully with the help of those closest to me, I was able to secure a deposit for my third building. Yes, you read that right, previous properties did not meet the state standard to pass inspection so, I had to move locations. I finally had the money, made the move and was preparing for inspection when DCR (Department of Cannabis Regulations- LA City) notified me that they wouldn’t be inspecting companies with building changes until further notice. Another blow. Here I am, three buildings in, living off what is left of savings and counting pennies while paying rent at a building that wasn't scheduled for inspection anytime soon. I was exhausted and throwing money away while waiting for a decision.
Another year passes and brings with it COVID-19 and yet additional changes to local licensing. In the midst of it all, I was desperately trying to maintain my health and good standing to attract investors but I’m not Superwoman. I am now struggling to pay the rent on an empty building that I have to keep to maintain my license. As a result, I began seeking alternatives again.
I met with several groups and it’s always the same song and dance, here again, they don’t have money to buy in on the license, they want to do illegal cultivation to pay building rent, they want to come in with the I’m better than you attitude, but no money. Or worst condescending with no money or anything. I couldn’t believe it once again slapped in the face from my own black people. So, I have proven to secure a city license, pending state license, building, insurance, cameras, etc. and still no investors, joint ventures, partnerships, nothing. I’m now being told that most investors now want an already built-out facility with 3-6 months of working capital. The stakes keep getting higher and I’m out of funds.
For most women in this industry, we are still seeking funding as the unreasonable deadlines by DCR are approaching that will knock us out forever. There has been no Social Equity, no assistance, unreasonable deadlines, constant changes with short notice, inability to change buildings quickly, and yet we must meet the deadlines or else. We are constantly jumping through the many ever-changing hoops. For those of us that have not given up there is little hope as we are not in a position of power not having the funding.
Writing this is a form of therapy for a story that hasn’t ended, but the light has certainly dimmed. I’m determined for this not to be my end and I would greatly appreciate your support. If you’d like to know how you can contribute to keeping the story and brand alive, please contact me directly at email@example.com
---- Sarah Agboola LA City Cannabis Story