Real struggles of a black entrepreneur in a green world: Jontae James explains some of the racial barriers embedded in the cannabis industry
It ain’t easy being green. Especially if you’re black.
Jontae James has a software company that could turn the growing world of legal weed on its head. It has all the makings of a successful Silicon Valley startup: it’s hip, it’s techy, it’s a cannabusiness, and it solves a monster-fucking-problem that challenges everyone in the cannabis industry: banking.
But even with such a hot product, and such a strong business plan, James says he’s constantly facing racial barriers that are inherent in this new industry — the industry of pot.
“People are often like, ‘How did this black guy figure out banking for the cannabis industry? I don't believe it. Nobody's been able to do it.’” James says. “This [discrimination] is something I have dealt with my entire life, so, it's nothing that I boohoo about. It doesn't stop anything. But that's why I make sure everything is bulletproof.”
Essentially, James’ company, NatureTrak is track and trace software for banks and cannabis retailers. Their compliance software is “fully integrated” across the cannabis supply chain, from seed to sell and offers inventory management, distribution logistics and digital transactions all in a single place.
What in the world does all of that tech business mumbo jumbo mean?
It means that banks can now access a comprehensive history of a retailer’s bud, with NatureTrak: from the seed it came from, to where it was grown, by whom, how much was harvested, their Certificate of Analysis (CoA) test results, when it was grown, who it was sold to, for how much and includes the licenses of every individual in the value chain.
So, when a bank sees a cannabis company make a large transaction, they don’t have to flag it and suspend their account. They can check NatureTrak and see every aspect of the paper trail behind that transaction, and they don’t have to freak out that some kind of criminal kingpin is making moves moving product.
“We can aggregate the data and we can do real-time audits through anybody's platform,” James says, clearly excited by the prospects of his software. “So now if a financial institution is banking one of our operators, when that one-hundred-thousand or ten-million-dollar transaction goes through the system… the banks can see that this is a legally tracked product.”
And it can be used by cannabis businesses in California according to their state regulations, or in Colorado or Oregon or anywhere else there’s legal cannabis being sold, according to their regulations.
James’ software solves one of the biggest challenges that cannabusiness-owners face today: banking their money. Because banks are federally insured institutions, they have been very reluctant to take cannabis money — from the growers, from the dispensary owners, from anyone associated with the business of pot.
Forcing many businesses to deal in cash only. Which is dangerous. When legal businesses are treated like criminals and forced to keep thousands and thousands of dollars on hand it makes them a target for actual criminals.
“What do you do with all this cash?” Asks Ryan Buffkin, the master grower for and part owner of Denver Recreation dispensary. “They're forcing people to be in a really dangerous situation. I mean, if you’ve got half a million dollars sitting around in cash, what would somebody do to get that? I shouldn't have to worry about that — I should be worrying about how to run my business successfully.”
With NatureTrak, hopefully this problem will be subverted, if it isn’t solved outright. Banks won’t have an excuse any longer — James’ software will provide them with all of the regulatory and legal information on the bud they’re banking, to make sure the money they’re taking has been legally acquired. And retailers can use it to get their cash into the electronic system.
It’s a win for everyone, killing two birds with one dope app.
“There's no crypto, there's none of that funny stuff,” James says. “This is standard banking. At the end of the day now you can pay that distributor a check for a million dollars and it will be transferred just like a Paypal or Venmo payment for a million dollars, rather than giving them cash.”
So the product he has, has the potential to be a game changer; the potential to bring the cannabis industry into a new era of legitimacy. So why is James struggling to get investors? Why, he asks, are other companies that aren’t as well thought out, and aren’t as prepared as he is, getting more investors more easily than he is?
“The only difference at the end of the day is skin color and position,” he says.
It’s a sick irony in the cannabis industry. Minorities, who, for decades have been locked up for cannabis crimes (like James' own father was), have been largely shut out of the legal side of the business. Many of them were locked up when weed was legalized and missed the boat. They missed their shot at starting their own legal cannabis company because they were rotting away in prison for cannabis crimes.
On top of that, there is a high cost barrier of entry, to obtain a space, obtain all the necessary licenses and obtain all the necessary equipment. This automatically disqualifies a huge proportion of minority communities from owning their own cannabis companies, and banks have an unsettling history of denying people of color loans.
James isn’t letting these or any other hurdles get to him, though. As he said, it’s something he’s been dealing with for his entire life. And now that he’s on the verge of something so big, it’s no time to wallow in “what if’s,” and “I wish’s…”
Right now, he’s focused solely on getting NatureTrak investors and ramping up for expansion...
“We're the only seed to sell software out there that is for financial institutions. I mean that's the key. That's what we were leading with,” he says.
It's an ugly catch 22. With NatureTrak James has the software to make the cannabis industry far more efficient and legitimate, but he can't get it to the people who need it until he overcomes the racial hurdles standing in his way.