Can worker-owned cooperatives and crowdfunding create a better cannabis industry for both consumers and businesses? This was the question posed by two Massachusetts cannabis veterans Sonia Erika and Ross Bradshaw during the recent Students for Sensible Drug Policy virtual conference. Small cannabis businesses in legal states throughout the US are struggling massively to open up shop, but Erika and Bradshaw argued that the worker co-op model offers a powerful alternative for entrepreneurs and their communities to build wealth.
“The cannabis industry is taking a major step back now for equity during this pandemic,” Bradshaw said. He’s the co-founder of New Dia, a cannabis company based in Worcester that received a special designation from the state to work with communities harmed by the War on Drugs. In March, Massachusetts Governor Charlie Baker closed all recreational dispensaries in the state under his stay-at-home order. A group of businesses unsuccessfully sued the state in an attempt to re-open dispensaries.
The financial damage done by Baker’s order hurts minority businesses the hardest, as Bradshaw explained. “It’s highlighting something we’ve already known: it’s great to have opportunity in this industry, but without having the tools and resources for folks to run their businesses, they won’t succeed. Minority entrepreneurs in Massachusetts are especially struggling to raise the money to open doors.”
Though Massachusetts legalized recreational cannabis in November 2016 and first opened sales in fall 2018, it has been notoriously difficult for small business owners to start up in the state’s industry. It’s been especially difficult for Black and Brown entrepreneurs and those whose communities were targeted by marijuana enforcement, even though the state has created an economic empowerment and social equity program specifically designed to support such businesses.
The result has been a very white and male cannabis industry, where start-up costs in the millions of dollars have kept many out. In Massachusetts, state regulations that require cannabis businesses to also sign agreements with their local governments have also burdened people who don’t have political connections and experience. And this dynamic has played out in other legal states like California and Colorado.
So what do you do if you can’t compete with corporate, multi-state or multi-national cannabis companies? Build weed co-ops, says Sonia Erika, who co-founded the cannabis advocacy and lobbying group the Massachusetts Recreational Consumer Council in 2016, and currently works as a cooperative business developer at the Center for Family Life in Brooklyn, New York.
“When we talk about weed co-ops, it’s not just retailers and farmers,” Erika said. “It also means people producing equipment and the whole cannabis supply chain. In a co-op ecosystem, different businesses in different industries cooperate and help each other.”
Worker co-ops are organizations where each worker is also an owner, and has a vote in how the company is run. Members of co-ops may benefit from equal sharing of profits, equal treatment of groups like racial minorities, LGBTQ folks, or undocumented immigrants, and other forms of mutual support for members and their communities. Every co-op is different, and makes its own rules or by-laws, though there are a set of core values—‘the seven cooperative principles’—they abide by.