America’s legal marijuana industry has a huge diversity problem—and it couldn’t be more ironic.
The Drug Policy Alliance estimates that less than 1% of the market to grow legal weed is owned or operated by people of color, a startling statistic considering millions of African-American and Hispanic men have been sent to prison for selling the same drug. This has been a trend since the national war on drugs began more than 40 years ago.
And yet investors are buzzing about the future of the budding retail sale of cannabis, thanks to a recent analysis from the esteemed financial research firm Cowen & Company: It estimates marijuana legalization could grow into a $50 billion industry in the next 10 years, which is partly contingent on more states making medicinal and recreational pot use legal.
Cowen analysts say there is an 80% probability that California will pass Proposition 64 in November, which would legalize recreational cannabis throughout the Sunshine State—after becoming the first state to legalize medical marijuana 20 years ago.
It’s already legal to sell medical marijuana in 25 states, and another four approve recreational sale and use, according to Cowen.
“That formal market is already $6 billion,” Cowen analyst Vivien Azer said in one of her firm’s latest Ahead of the Curve videos. “What’s more, when you factor in the illicit market, we think total cannabis spending in the U.S. is already north of $30 billion.”
That “illicit” market Azer refers to is the illegal underground sale of marijuana across America, which has disproportionately sent men of color to prison under mandatory minimum felony convictions. Those felonies then bar men from ever participating in the legal sale of the same drug predominately white male entrepreneurs cash in on in states like Colorado.
“Venture capitalists migrate to these states to open multi-billion dollar operations, but former felons can’t open a dispensary,” rapper Shawn “Jay Z” Carter noted Thursday in an op-ed for the New York Times about America’s failed war on drugs.
A panel of minority legal marijuana entrepreneurs traveled to Washington Thursday to address the issue with Congress, telling lawmakers how lobbyists and lawyers for their predominately white competitors have used felony rules and other legal technicalities to “game the system.”
“People of color have bore the disproportionate brunt of the war on drugs and should disproportionately benefit from legalization,” Bill Piper, senior director of the DPA’s office of national affairs, tells Fortune. “If we don’t break open the market now and get people of color in, it’s going to be even harder a few years from now when the industry is bigger and stronger.”