Marijuana Business Magazine September 2019

Marijuana Business Magazine | September 2019 16 NuLeaf Project co-founder discusses barriers to entry, networks and capital Jeannette Ward Horton N uLeaf Project has the same approach as a private equity company: It is looking for a return on its investment. It differs, however, in its primary mission. The nonprofit exists specifically to build intergenerational wealth for people of color via the legal cannabis industry. Data shows that less than 1% of U.S. venture capital-backed founders are black, Horton points out. NuLeaf Project provides minority-owned cannabis businesses, mainly those with African-American ownership, access to resources, education and mentors. The biggest component of its work, however, is giving financial support to such businesses, either in the form of grants with no repayment requirement or zero- interest loans. The grants typically range in size from $15,000 to $60,000, with funds coming from tax revenue raised by the legal cannabis industry in Portland, Oregon. While these may seem to be small amounts by today’s marijuana-industry standards, they can make a big difference to fledgling cannabis entrepreneurs. Working mainly in Oregon as of today, NuLeaf Project is eager to spread its model to other states. In the company’s first year of operation, grants have resulted in job creation and new product lines for the funded businesses, Horton said. How do you identify potential in a cannabis business? What are the key things you are looking for when deciding to invest? Thoughtful investors base their decision to invest on the unique and valuable characteristics of the business model, the size of the market served and leadership. Do you trust the leadership, especially the CEO, to get it done?We eval- uate the business model and the market potential. What almost comes standard with cannabis entrepreneurs of color—who’ve beaten the high barriers people of color face to establish a licensed cannabis business—is they are innovative problem solvers with the tenacity and drive to overcome obstacles that would sideline most entrepreneurs. These leaders have outsmarted the odds that say, with their significantly limited access to capital, they will not have the resources or connections needed to launch a licensed cannabis business. Are you looking at states outside Oregon? It’s very important to NuLeaf Project to see cities and states investing cannabis tax revenue into minority-owned cannabis businesses. We’ve consulted other governments on developing their programs, and we’d be happy to launch a NuLeaf Project in other cities and states. We’re also working with cannabis companies that are interested in building an equity program or meeting diversity goals, as well as companies that simply want to contribute financially to this work. Is there a particular sector in the cannabis industry that you currently are more interested in than others? There’s more opportunity for minority-owned businesses in the plant-touching verticals, especially consumer brands, because the complicated regulations that differ greatly from state to state make it very difficult to launch national brands. That means there is a lot of opportunity still to build strong local brands that are poised for national expansion when it comes to federal legalization. Money Matters | Nick Thomas