- Our priority is to have Black, Brown,
women-led businesses on our shelves.
- There's just not enough, right?
- People told me that this industry was for White people.
That as a Black person,
that I was opening myself up for being arrested.
That I was never going to be able to get investment.
I was out pitching.
I needed a lead investor.
- [Narrator] Whitney Beatty recently received
an investment of just under half a million dollars
from a fund launched by Jay Z
and a group of cannabis companies
who together are called The Parent Company.
The fund will have an initial investment of $10 million.
- You've been pushing the boulder uphill
for so long and finally,
someone has come to push it with you.
Not just someone, it's like Jay Z
has come to push it with you of all the people in the world.
- [Narrator] In an interview with The Wall Street Journal
earlier this year,
Jay Z said he was motivated
by an imbalance in the marijuana industry.
Statistics show that while Black people
were nearly four times more likely
than Whites to be arrested for marijuana possession,
they make up only a small number of those profiting
from the multi-billion dollar legalized pot industry.
- It's happening for a number of reasons,
and a lot of them are financial.
- [Woman] That'd be awesome.
- It costs about 1.5 million, 2 million
to open a dispensary in the LA area.
I can't go to the SBA and ask for a loan.
You can't go to Bank of America
or Wells Fargo and ask for a business loan
because this is still federally illegal.
And you're stuck in a space
where you need to raise money from VCs
or from angel investors.
People of color generally don't have a lot
of angel investors within their networks.
(hammer banging)
- [Narrator] Beatty hopes investment
from the Jay Z fund will help her meet her goal
of opening a dispensary
in the highly competitive Los Angeles market by September.
- So they'll come in and you'll have signage or a kiosk.
My 401(k) does not exist.
All in, the chips are here.
If this doesn't happen,
I don't even wanna think about what happens
if this doesn't happen.
So are we still looking at.
- Beginning of August?
- Beginning of August? - Yes.
♪ And then a hero comes along ♪
- [Narrator] States and municipalities
have also tried to help minority representation
in the industry through social equity programs
that reserve cannabis licenses for those groups.
- If we're specifically talking
about equity and licensing,
then I would describe that program
as an effort to reduce barriers
to entering the legal cannabis market for communities
who have been historically criminalized by cannabis.
- [Narrator] Cat Packer oversees LA's
cannabis regulations and licensing.
- A lot of the feedback today that we received
is just that the process takes too long,
and that the delays are extremely costly
to social equity applicants.
- This is the first time I've seen a T-shirt
with JV on it.
- [Narrator] Beatty was one of those applicants.
She first applied for her dispensary license in 2019.
Soon after qualifying,
she struck a deal with a venture capital firm.
- I went in for a meeting in February
and I asked them about their cash viability,
and they said, "We have the money."
And two weeks later they said, "We're closing.
And it's over."
The legal cannabis industry was much different
when Wanda James and her husband opened
their first dispensary in Colorado.
- We opened up our dispensary in 2009.
There were no social equity programs.
The cost to open up a dispensary
was the cost of your lease.
So our first dispensary,
including our grow facility,
probably cost us in the ballpark of about $200,000.
We wanted to be able to use the dispensary
to talk about mass incarceration.
My brother's crime was four ounces of weed.
And that four ounces of weed cost him 10 years
of his life in the legal system.
- [Narrator] James has worked as a consultant,
helping several states and municipalities
create cannabis social equity policies.
- If you're one of the very fortunate people
to be able to get a license,
hopefully, the social equity program allows
for some type of funding from the state.
- The reality is is that while we are disbursing $6 million
among potentially hundreds of different applicants,
our applicants are gonna be competing
with businesses who alone have multimillion dollar budget.
- The issue that we see right now
with social equity across the United States
is we have yet to see any social equity program work.
(pensive music)
- [Narrator] That's where funds like Jay Z's come in.
Data shows that between 2013 to 2017,
only 1% of US startup founders
that received venture capital were Black.
(sander buzzing) (hammer banging)
(boards falling)
The money Beatty received
has kept her on track so far.
- You've got gorgeous hidden lights.
- Isn't it beautiful?
- [Narrator] But she still needs to finish construction,
and purchase inventory, like edibles
from LA's Madame Munchie.
- This kitchen.
- It smells so good. - It smells so good.
- What are your mins? What are your minimums?
- We don't really have them with this distro company.
Especially since you're here in LA,
I don't think we'll have a problem
with whatever order size you're gonna wanna start with.
(boards falling) (hammer banging)
- We've got full-out demolition going right now.
We are in the middle of a full build of our space.
That has been covered completely by this part
of the investment.
We are moving forward on all cylinders because of this.
- Any time there is money out there to be had,
I encourage all entrepreneurs
to always go after every dollar that's out there.
But let's be real of what the real effectiveness
of those funds are.
- [Narrator] Beatty needs to raise over $300,000 more.
It's unclear whether she'll be able
to open her doors to start sales
by her projected September launch date.
- My bottom line comes down to the cash.
There's never enough money.
I have been waiting for my license
since September 3rd, 2019.
I've been losing money for 22 months now.
- We have a 10-head embroidery team
of which we just did the hats.
- There's no room for failure here.
There really isn't.
We are eight weeks from greatness
or eight weeks from disaster.
(dramatic music) (gate squeaking)