Jeannette Ward, CEO of NuProject

Interview Questions

[OnlineEducation.com] Jeannette, thank you for speaking with me today. Your work as CEO of NuProject focuses on one of the most important aspects of the emerging cannabis industry: ensuring that Black and other historically excluded entrepreneurs have access to capital with an overarching focus on building generational wealth. This is so important, of course, because the Black community was—and is—disproportionately targeted by the racist War on Drugs. Can you tell me a little bit more about NuProject’s current progress and focus?

[Jeannette Ward] We have distributed over $2.3 million to Black, Brown, and women-owned businesses; also socially and economically disadvantaged individuals and veterans, and others arrested for cannabis. There are some other classifications there, but the vast majority are Black-owned.

So that’s our progress to date, and I’m really proud of that. We do that with cannabis taxes that are collected from cities or states, or from cannabis companies and private owners who want to contribute to the work.

We’ve given that money away as low-interest loans and grants. And then we provide some technical assistance around financial acumen to go along with that.

[OnlineEducation.com] Before becoming CEO of NuProject, you were an executive at major US companies, namely, Home Depot and Coca-Cola. How has your work within cannabis—with its patchwork quilt of state laws and unique history—been different from working in those other more established industries?

[Jeannette Ward] There are a lot of differences. You’ve laid out some of the issues. There’s a patchwork of rules and regulations. No state approaches it the same so that definitely makes it much more complicated and has a higher cost of doing business. I think that’s important to know because that burden is felt particularly by historically excluded and undercapitalized founders. That’s one of the differences.

The other difference for me is that cannabis businesses don’t typically have access to the kinds of tools I was used to. I worked for very big companies, so those tools have a lot of benefits, but they’re Ferraris, and you’ve got to be able to afford to pay for them to get the benefit.

And then a difference that drove me to do this work with NuProject was really around diversity. I was active in creating more diverse cultures at these companies—Coca-Cola, UPS, Home Depot—and so I had a really good sense of diversity in corporate America.

When I got into the cannabis industry, I was surprised by the fact that it was less diverse than corporate America. That felt particularly jarring in light of the economic impact of the cannabis industry on Black families and of cannabis criminalization on Black families.

[OnlineEducation.com] With the cannabis industry being relatively new, it has a unique opportunity to be built with social equity in mind. Are there any states or localities with equity programs such as taxes, licensing, reparative justice funds, or expungement? Do you think any places have really nailed it and should serve as a model to other states as legal adult-use becomes more widespread?

[Jeannette Ward] I want to asterisk my answer by saying nothing can nail it. I’m going to name three where I think they’re getting it right.

First, the state of Illinois has had notable problems with its licensing, but its reparative justice investment, the R3 program, allocates 25 percent of cannabis taxes, which is a significant and growing tax source, to fund programs in communities that have been harmed by violence, excessive incarceration, and economic disinvestment. They decided to let cities and counties decide how to distribute the money, but it also created a lot of local community accountability. I’ve heard from people who live in Illinois that those funds have done good work.

The R3 fund means “restore, reinvest, and renew,” and it matters because they were very much about reparative economic justice for the Black community. They were very upfront with that and had some incredible leaders who advocated for their model, which put that money aside and then saw it through to benefit the communities they intended it to benefit.

And then I want to go to Colorado because of funding. Colorado has just gone simple with how they’re distributing cannabis taxes as funding to social equity licensees, and that’s good. They’re doing grants administered by their cannabis business office, which is in their economic development office. Forgive me for giving you a novel, but these details matter! They’ve situated a cannabis business office within their economic development office in the state.

I’ve seen that in New York; I’ve seen that in Colorado; and doing that really ups your game in terms of investment in terms of the outcome of the economic output of the industry. When they’re situating it within the agency that thinks about economic drivers, it’s very different than if you situate it within the alcohol or some other regulatory body that isn’t thinking about growth.

So, a) I like any state that does that structure, and b) Colorado said, “We’re going to distribute grants from our office because we’re a business development agency; we can handle grants, and then we’re going to do loans.” They only set aside a million—that’s small, but if you’ve only got a million, go ahead and do it! Create a revolving loan fund because every state’s got a million; create a revolving loan fund, and then you will turn that into $3 million over ten years.

And for Colorado, we can practically touch all of their social equity licensees with just a million, which is way better than not, and many states are sitting on their hands doing nothing. So I think Colorado got that right.

And then New York, as I said, it’s situated a lot of people within their economic development offices, both at the state level and at the city level. And here’s the other thing I like about those people: they’re almost all Black. How do you reach the community you intend to reach? Well, let’s get some culturally responsive people who’ve lived it and know it, and who have the relationships to reach the communities. They’ve got enough staff and they’ve hired the right folks. They’ve had a lot of policy experts from the industry, as well as a lot of people with deep economic backgrounds. I think they’re building the right staff.

[OnlineEducation.com] That’s great to hear, especially as legal recreational use continues to spread, it’s important to hold up some of these policies as a model to other states. Oregon was one of the earliest, of course.

[Jeannette Ward] We don’t have a formal social equity program and we’re moving away from what I would have told you Oregon did right! I would have had Oregon at the top of my list until recently.

[OnlineEducation.com] What has changed?

[Jeannette Ward] They have done a moratorium on licenses, so there are no new licenses being issued. And prior to now, people would say “Oh, it’s what created the glut in the industry, and that’s why there’s a problem.” But before, it was unlimited licensing and really inexpensive to go buy a new license or pay the fee to get it from the state: that meant a lot of Black, Brown, and historically excluded entrepreneurs of any color, who relocated to Oregon because they were undercapitalized.

I was talking to a man who was white, and who moved out here because he did the same research out of Alabama: “Where can I go where this is legal to start my business that I can afford?” And the answer was Oregon. So we attracted a lot of people who moved their businesses here, which I think is phenomenal because competition breeds the best of the best. I loved our open market, but they brought this moratorium on and then extended it with a second legislative bill. If you’re already playing, a moratorium feels right to you.

[OnlineEducation.com] Thank you for sharing that. Speaking of leadership, there was this report: “Diversity, Equity, and Inclusion in the Cannabis Industry.” And in 2019, 36.8 percent of the executives in cannabis were women. Twenty-eight percent belonged to racial minority groups, and both of these figures have dropped precipitously in the last two to three years. Do you have any idea why this is happening? Why has the leadership become less diverse?

[Jeannette Ward] It’s because businesses are shutting their doors or being bought, but mainly shutting down. What I just described with Oregon, where we went from this open, fair market—where small folks could start for $5,000, where anyone could start for $5,000—basically to we’re not giving out any more licenses, and now the cost of licenses has gone way up.

Then, it’s tough to own a cannabis business, and you need a lot of money to keep it afloat. You look at some of these publicly traded companies, and they’re operating in the red, but they continue to get investment.

So it’s a fallout of the smaller players; those are the ones without the capital. Those are the women. Those are the minorities. Those are the Black owners. And then what the data tells us across any industry is that if you’ve got diverse ownership and diverse leadership, you have diverse employees. As these diverse owners go, so do the diverse leaders.

[OnlineEducation.com] How do you think diverse leadership affects a company’s success?

[Jeannette Ward] There’s a McKinsey study that describes it better than me, but the bottom line of that study is 35 percent better performance against your peers if you have diverse leadership.

[OnlineEducation.com] I cited the McKinsey study in one of my other Women Breaking Barriers pieces. It’s amazing. It’s good for business, but yet these historical injustices continue to play out. And speaking of righting some of those historical wrongs, one thing I really love about NuProject is more than 60 percent of NuProject’s loans have gone to Black-owned businesses and 50 percent to women-owned businesses. In your experience, what are the unique challenges that Black and female entrepreneurs face in starting or leading cannabis companies?

[Jeannette Ward] The limited access to capital. Those groups have historically less access to capital and less personal wealth to build a business off of, which in cannabis is how people fund themselves. And then those groups are less likely to get VC-funded and less likely to get loan funding; there are a lot of loans out there, but you’re less likely to get those loans and VC funding.

Really, it’s capital. Yeah, it’s really capital. I feel like a broken record. I can’t give you a better answer than capital.

[OnlineEducation.com] It definitely echoes the sentiments of so many of the women I’ve spoken to. With your experience in the cannabis industry, have you ever faced any gender or racial discrimination?

[Jeannette Ward] You just stop noticing, to be honest with you.

My first job in cannabis was working for a CEO at a cannabis tech company, Jessica Billingsley at Akerna. I felt like I was relatively impartial, but I would watch the way they would speak about her peers versus her, and the bottom line of their companies versus the one we were working in. Over seven years, it felt like it can’t boil down to anything other than gender!

In terms of the racism, yeah, it’s tough: it’s one of those things that’s insidious. It’s hard to pinpoint, and yet it happens every day, and you stop noticing it. I’ll be honest: if you notice it and you hold it in a way that you remember it, it emotionally doesn’t help you. It’s one thing that you learn to let slide off your back like water off a duck.

[OnlineEducation.com] A lot of people, myself included, thought that federal decriminalization or even legalization of cannabis would come more quickly, especially after large states like California and New York have legalized adult-use. The industry is still stigmatized, though, and entrepreneurs don’t have access to basic banking in the industry, let alone large-scale VC funding. What do you think needs to be done to move this industry out of the shadows, paying thought to correcting these historical injustices? And how can folks get involved?

[Jeannette Ward] Yeah, the stigma is surprisingly deep. In Oregon, as I’ve started to work in legislative work and with the agencies more directly beyond just the OLCC. Even in the OLCC, I expected things to be different. Once I got deeper into it, I expected to find some champions in Oregon cannabis or some people who don’t think it’s “the devil’s lettuce,” but stigmas run so deep. That’s been really disheartening.

I’m like you: when I got into the industry, I thought federal legalization was going to come faster than this. And after President Obama didn’t do it in his two terms, I said, “This isn’t gonna happen quickly.” We knew it wasn’t going to happen with Trump, but my gut said the next Democratic leader wasn’t going to do it either, and that’s been the case. Biden clearly thinks it’s the devil’s lettuce!

I’ll be curious what happens next. Is descheduling the goal? Does a campaign to deschedule get mounted and make headway? I don’t know. It’s a conundrum.

I had a guy say to me yesterday, “The feds are never going to change the laws because they make too much money off 280.” I was like, “I never thought of that conspiracy theory,” but the geeky economists do the math. Being in Oregon and working with the legislators, I know they do this type of math. They have asked the question, “What would that look like?” There’s also the question of, “Yes, but what would it look like if you opened this up and we were able to really kill the illicit market to make it easier for people to get into the legal market?”

But I don’t think people are genuine about making it easy for folks to enter this market, partly because of the fear and partly because of the concern about cannabis, the stigma. Then folks with big money say, “Hey, listen, make it only accessible to us with the tools and the ability to really watch it for you.”

I’m not optimistic about the future of cannabis. That’s too bad.

[OnlineEducation.com] The Oregon market, in particular, has been hit heavily. The Northeast market still has a lot of room to grow and create better equity laws.

[Jeannette Ward] Nobody is getting the regulation. The cost of doing business legally is so expensive, and the thing I think about is macroeconomics. I’m curious to know more about when Prohibition ended with alcohol: how much did people continue to bootleg, and how long did that go on for? Did bootlegging really dry up immediately? I’m really curious because it’s a similar time. What did that look like?

[OnlineEducation.com] What is your advice for women and other underrepresented groups who are interested in launching cannabis-related companies? Especially in raising capital, since you have such unique insight.

[Jeannette Ward] I want to be honest. What I say to people who are asking me this right out of the gate is: are you sure you want to be in the cannabis business? Why do you want to own your own business? I’ll start with this because if you want to be an entrepreneur, I need to get at the why.

If you can accomplish your “why” through another industry, I’m going to advise you to do that. I’m going to do that because I know you’re an undercapitalized entrepreneur, and I know how much money it’s going to take you to raise your cannabis business. I know how unlikely it is going to be revenue-generating for you anytime soon.

There are many ways to build generational wealth in an industry without this regulatory overhead. What I honestly tell people is I encourage them to do something else.

The second thing I encourage people to do—especially if they take me up on doing something else—is fund your business without having to get VC funding, without having to give up your ownership.

The next advice I give people is really about becoming an entrepreneur. You can do it, but in cannabis, it’s just so much harder.

I was just talking to a guy who had a tow-trucking company and an alcohol business, and he sold both in order to open his cannabis business. He’s a retailer in Oregon, and they’re having the worst time. I thought he was going to cry on me; I felt so bad for him. He’s built his business skills, but I wanted to tell him to shut his business down now and go reopen his tow truck company.

If it’s your dream to do cannabis, do something else for a little bit: do the CBD version for a little bit, build up your entrepreneurial skills, and then when it’s easier to get in this market—certainly, it’s got to be at some point!—then join it.

I’m starting this business and learning, but I happen to be learning in reverse. I’m learning in cannabis how to do lending to historically excluded entrepreneurs. And that’s something.

I’ve gone to a federal financing conference for community development finance institutions, a federal designation for serving historically excluded entrepreneurs. And they aren’t doing what we’re doing; they’re not reaching Black businesses the way we are. They’re not reaching women-owned businesses the way we are. I’m really proud of what I’m doing now, learning this work.

I can expand this work beyond cannabis where we can fund Black-owned businesses and women-owned businesses with the kind of success rates people want to see to prove that you can get capital into these businesses—and it will be just as profitable as capital going anywhere else.