Graduate students at Berkeley-Haas are conducting a case study on an African American cannabis entrepreneur to explore both the flourishing cannabis market and the industry social justice and public policy issues.
MBA students at UC Berkeley’s Haas School of Business are preparing to publish one of the first business school case studies on the cannabis industry. The case, “Cannabusiness in Washington D.C.,” will profile Corey Barnette, owner of two cannabis businesses — a cultivation center and a dispensary, both in Washington D.C.
The case study, lead authored by associate professor Rui de Figueiredo and co-authored by MBA students Jamaur Bronner, Mohsin Alvi and Deena Malaeb, will explore the business opportunities evolving from the nation’s budding market and the public policy and social justice issues surrounding the industry. The study will be published later this month in the Berkeley-Haas Case Series and the California Management Review.
The authors acknowledge that the cannabis industry faces unique challenges due to federal laws prohibiting marijuana and legislation that varies state-to-state. Currently, while cannabis is classified as a Schedule I substance under the Controlled Substances Act, 25 states have passed medical marijuana legislation and four states have legalized marijuana for recreational use. Several more states could have marijuana laws on the books by the end of the year, as nine states have cannabis initiatives that have qualified for this November’s election.
“Basically, the legal side of the industry is starting from scratch,” said de Figueiredo. “You don’t typically see that in traditional business school cases and discussions.”
The nation’s legal cannabis industry is already worth an estimated $6 billion, and reports have projected it will balloon into a $21 billion market by 2020.
The subject, Barnette, is a Duke Fuqua MBA and former investment banker. He has what the study refers to as the “three pillars” necessary for success as a cannabis business owner: “a qualified and capable team, political influence, and access to capital.”
A significant component to the case study is the lack of opportunities for minorities to break into the legal cannabis industry. Barnette is an African American, making him a rare presence in an industry that is primarily older, white and male. Less than 1 percent of the legal cannabis market is owned or operated by people of color, according to the Drug Policy Alliance.
“Corey has all three pillars, but the road ahead won’t be easy,” says Bronner. “He’s got to be a special type of leader in order to be successful.”
Co-authors Bronner and Alvi were particular interested in helping raise awareness of social justice issues within the industry, as they came to Haas through the Consortium for Graduate Study in Management, a nonprofit that recruits underrepresented minorities and others for MBA programs in an effort to encourage diversity.
“It was a bit ironic that the people of color who were victimized or negatively impacted by the sale and distribution of marijuana aren’t the ones getting rich in places where it’s legal,” said Bronner, who is also African American and a management consultant with The Boston Consulting Group. “It didn’t sit right with me.”
The students received a $2,000 grant from the Eckles Diversity and Social Impact Fund for the study.
Also happening at Haas School of Business this month is a speaker series titled “High Margins,” which will feature a variety of speakers involved in the industry, including investors, entrepreneurs and drug policy reform advocates.
“With legalization there is massive growth projected for the cannabis industry in this country,” said co-organizer and Haas student Cody Little.