This post originally appeared on Entrepreneur.com - #Growing Your Business
They’ve transitioned from ambitious careers to claim their stake.
8 min read
Yes, the deck is stacked against you if you’re female. Much has been made, and rightly so, of a cannabis playing field now tilted unfairly by the influx of capital and the men who seem to get most of it. Overall, in 2018 just 2.2 percent of the whole VC pie was invested in female founders. It’s even worse for those who are black, with one 2018 report showing they received only .0006 percent of total tech venture funding since 2009. When it comes to power, only about a third of cannabis executives are women.
Despite the numbers, and in some cases because of them, women — including women of color — are entering cannabis because they see the opportunity to shape the industry. They are determined to make it inclusive, responsible, and a business that caters to people like them. Meet three of these disruptors who transitioned from ambitious careers to come shake up the greenway.
Advocating for Social Justice
Shanel Lindsay, CEO, Ardent
Image Credit: Courtesy of Ardent
A career in pot was nowhere in Shanel Lindsay’s plans as a girl. The type A powerhouse was raised by working-class parents, a white mother and a black father, to study hard and aim high. She earned a B.A. at the University of Pennsylvania, despite having a baby in her sophomore year. (She took summer classes at Harvard with childcare help from her mom and managed to graduate with her class.) “For the first time,” Lindsay says, “I was with classmates who were brought up in extreme wealth. They thought differently. They didn’t see the obstacles; they saw the big opportunities that only someone from wealth could imagine.”
Inspired, Lindsay made her way to Northeastern University School of Law. A legal career, she figured, not only could be financially rewarding; it would also feed her deeper passion for social justice — which turned out to be true, but not quite in the way she expected.
Lindsay was practicing as an attorney in Massachusetts when she got arrested for possession during a routine traffic stop. She’d started using marijuana, before it was legal, to help relieve pain from ovarian cysts and to relax. And although she was never charged (she had less than the legal limit), she says she was put in a holding cell with no probable cause. That harrowing experience stoked her fire to change things for the disadvantaged and people of color. But it didn’t lessen her interest in pot.
At home in her kitchen, Lindsay was already experimenting with making raw weed ingestible by decarboxylation, the process of activating THC or CBD. She tried doing it in her oven, a slow cooker, and even a toaster oven. After medical marijuana became legal in Massachusetts in 2013, Lindsay brought her products to MCR Labs for testing and found that her decarboxylation process was subpar, so she commissioned them to hone in on the right timing and temperature for a better outcome. Once she had those answers, with funding from her mother, she “Frankensteined” a new rig with a circuit board, an algorithm, a silicone heater, and some plastic — a crude prototype for what eventually became the Nova Decarboxylator home system. In 2015, Lindsay founded Ardent Cannabis to sell the Nova and related products.
Meanwhile, she saw the chance to do something about social injustice in her new industry by getting involved in crafting the state’s new recreational legislation. She called on some of her old law professors to help. “The medical cannabis laws had no equity. Their discriminating regulations required more than $500K in liquid cash in the bank [to set up a business], marginalizing the very communities that had suffered under prohibition,” says Lindsay. Thanks to her efforts and those of others, today in Massachusetts there is no capital requirement for adult-use establishments. The law also requires that every cannabis business have a “positive impact plan” that outlines how it will improve communities disproportionately impacted by prohibition. In addition, a technical assistance program is available for social-equity-eligible entrepreneurs. Lindsay has been reappointed to Massachusetts’ Cannabis Advisory Board, where she’ll continue to push for these kinds of measures.
“I loved the power that came with being an attorney, but I reached a point where I wasn’t able to use my voice in the most effective way,” says Lindsay, whose company is partnering with programs for youth and the disadvantaged, and has raised $1 million and generated more than $7 million in revenue with a commercial model to launch in 2020. “Now I am.”
Fighting for Diversity
Jeanne M. Sullivan, General partner, The Arcview Group
Image Credit: Courtesy of Arcview Group
Jeanne M. Sullivan shocked her family and friends when she jumped into the cannabis industry with both feet. “I had excoriated my husband and kids when they used cannabis. The stigma was upon me,” Sullivan admits. “But once I researched the industry, I realized all the social injustice that existed — the arrests and felony convictions, particularly for people of color — and I experienced firsthand the wellness issues.”
The other thing that got her attention were the numbers. Sullivan, whose background includes operating roles at AT&T and Bell Labs, cofounded a tech-focused VC firm for which she’s still a special adviser. “Being a long-time investor, within five seconds, I saw the economic upside and that cannabis was the next big wave, and how there were so many similarities to the early tech days,” says Sullivan, who became general partner at The Arcview Group, the first and largest group of high-net-worth cannabis investors, with more than $280 million invested so far. “I learned a lot from the blatant inequities in tech. We have a responsibility to push harder for inclusion and diversity, and the only way to do that is for all underrepresented and traditionally disadvantaged populations to help each other.”
Having made it to the top of the cannabis industry, Sullivan advises female entrepreneurs about the educational and network-building resources available to them and coaches teams on things like packaging and messaging. Most important, she opens the door for financing in a way that traditionally has been available to only a chosen few. “This gets me excited — the opportunity to create a whole new world where we all can truly win,” says Sullivan. “That is the opportunity a new industry like cannabis brings.”
Growing the Female Market
Victoria Flores, Cofounder, Lux Beauty Club
Image Credit: Courtesy of Lux Beauty Club
When Victoria Flores landed her first job in the financial industry, it was no small feat. As a Mexican American teenager, she’d been the first in her family to go to college. But during her 18 years at firms like Morgan Stanley Prime Brokerage and Katz Capital, she knew Wall Street was just a stopping point. She wanted to start her own business and, as a user of CBD, started eyeing the new industry. Compared with the world she was in, it seemed to be a more level playing field for women and people of color. And, if she succeeded, she could bring in a whole new market of female consumers to help keep the field level.
Flores teamed up with a childhood friend, a registered nurse named Leslie Wilson. They both saw a huge white space in the beauty industry. “CBD-infused beauty products tend to be either low-rent, with marijuana-leaf packaging targeting men,” says Flores, “or very expensive body serums at Sephora.” She and Wilson decided to make CBD products for the mainstream cosmetics market. Raising $750,000 in seed funding from some of Flores’ former Wall Street connections, they founded Lux Beauty Club in 2016.
Rather than investing in booth space at crowded cannabis trade shows that tend to cater to the “stoner” crowd, the cofounders put on lab coats and found their place at beauty industry conventions, where they’ve been one of only a few CBD brands on the show floor. “We have the best packaging, and being women doesn’t hurt,” says Flores. “The women commercial buyers love to do business with other women.”
Three years after launch, Lux Beauty Club has a partnership with Express Brands’ new mindfulness website, UpWest, and other deals in the wings. Furiously raising capital, selling product, and hiring sales staff to target medi-spas, boutiques, and doctors’ offices, the founders are focused on scaling. “It’s a war on the ground, and we are in full combat mode,” says Flores. “It’s game on. And we are ready.”