The Equity Trade trademark certifies that a brand is owned by social equity entrepreneurs. Photo credit: Entity Equity Trade Inc.
When walking into a store like Whole Foods, it’s easy for consumers to determine which products align with their values through labels such as organic or fair trade certification. These trademarks help identify when products are made or traded using sustainable practices, such as organic farming techniques. But for cannabis consumers, it’s not so easy.
That’s why the nonprofit Entity Equity Trade Inc. is building an ecosystem of equity-owned brands through their Equity Trade Certification, which helps distinguish equity-owned brands from others on dispensary shelves.
In addition to these brands — which are owned by members of communities most affected by the War on Drugs, including minority communities — the certification also helps identify allied companies, also including retailers who support underserved communities.
The Equity Trade Certification
Similar to fair trade and organic-certified goods, Entity Equity Trade Inc.’s Equity Trade Certification verifies brands based on a series of qualifications.
Once certified, the organization allows these brands to use the trademark on their products to signify certification. Both retailers and their consumers can then see this trademark, and better identify equity-owned brands from others on store shelves. This adds value, and helps shops and customers better differentiate which brands they want to support.
Ramon Garcia, Entity Equity Trade board member, describes this as a way for companies and consumers to vote with dollars.
“The Equity Trade Certification itself precisely identifies businesses with the ownership that have been approved by a local, city, county or state social equity program that attempts to identify inequities in race, religion, sex,” he explains. “Then by doing that, we can start promoting those businesses and communities.”
In addition to the trademark, there’s also a QR code on the certified brand products. Customers can scan the code to learn more about the products and companies behind them. This contains test results, videos, art, and more, says Garcia.
These QR codes help consumers to know, “that it is a genuine product. [When] the consumer scans that product, it allows them to connect with the brands in a unique way that they don't normally get to connect directly to their consumers.”
Overall, the intention is to build visibility and value for equity-owned brands, and those that share their virtues.
“If they [retailers/consumers] can connect to that product and they know this is [xxx] a brand or a product coming out of their community, that adds this extra layer of value that people are seeking out,” says Garcia. “So we're trying to just amplify that.”
As part of this certification, Entity Equity Trade also helps connect these brands with others to help meet their supply chain needs. These partners recognize the importance of forming non-exploitative partnerships with equity-owned brands and help further grow the social equity ecosystem.
Determining who Qualifies
Before gaining this certification, each business must apply. To apply, applicants must submit their information, proof of ownership, and documentation of hiring practices. Additionally, applicants must be certified through a local, state, or county social equity program. Furthermore, Entity Equity Trade also requires that the business is at least 51% owned by a social equity entrepreneur, or a member of a community most affected by the War on Drugs. This includes people's income, people from different walks of life, women, low-income applicants, and those with cannabis convictions.
It is essential that companies who seek the certification be at least 51% equity-owned. This is because the organization and its partnering businesses recognize that in states including California, many companies claim to be equity-owned, but are not indeed equity-owned (i.e. the equity partner does lly own the majority (51%) of the company, but rather, a small stake in it).
In essence, equity partners are given only a small percentage of a business, but no actual control over it.
As Marijuana Business Daily reported, in Arizona, “[...] many existing marijuana companies massively trying to recruit qualified social equity candidates to partner work to obtain some of the 26 available licenses [the state offers to social equity ownership a result of such recruitment practices, mostly white-owned businesses are claiming equity-ownership, then applying for and receiving limited resources intended for social equity applicants, including licenses reserved for Black and Brown entrepreneurs.
According to Mjbizdaily, the “predatory business deals” are taking advantage of the situation.
Equity Trade vets each applicant to ensure each business is at least 51% equity-owned. Then, once the applicant is successfully certified, they’re able to use the Equity Trade Certification trademark on their products and access Entity Equity Trade’s network of connections and resources. Resources include access to distribution partners, accountants and several other industry professionals who value equity-owned businesses.
As of early 2022, Entity Equity Trade has certified 16 businesses, which they re-verify each year. Some of those include: Dolo Rolling Co., Cannabis On Fire, Gift Of Doja, Dreamt, MAAT Apothecary and more. Another 15-20 brands are awaiting approval. However, until the organization can solidify funding, or federal approval of the Equity Trade Certification, it remains limited in how many brands it can verify.
The Catalyst
Entity Equity Trade started out as a vision five years ago, and its main focus is to help those most affected by the War on Drugs. The organization acknowledges the struggles of these communities, and pushes for change by working cooperatively together with them.
The vision came alive when Garcia sat in on industry association boards like National Cannabis Industry Association (NCIA) and other affiliates to create an equity committee. Garcia along with Nina Parks, co-founder of Entity Equity Trade, and other volunteers understood the first step into making the nonprofit vision come to life. Garcia was then joined by Omar Figueroa of Omar Law Offices.
The Equity Trade Certification is approved by the state of California. The uniqueness of it all is that it is not limited to cannabis companies. Rather it identifies businesses that are coming out of communities that have been impacted by oppressive policies including the War On Drugs.
Entity Equity Trade recognizes that the harm done by such policies has generational consequences. But the cannabis industry has the opportunity to help right those wrongs.
“One of the biggest things that the War on Drugs did was it killed our generational wealth number one because now you have generations of families in and out of jail. So now they didn't get to graduate from high school or go to college,” Garcia continues. “So they don't have friends that are lawyers or accountants. They don't have uncles that they can go to and say, hey, let me borrow $100,000. I need to get this packaging together for my product. So, we identified all that damage; all those points that were taken away; and for trying those gaps with resources to help meet what we've lost.”
By January 2022, Equity Trade hopes to look to grow the network and bring together more allies. Then, they can continue to certify more equity-owned businesses, expanding the ecosystem all around California and the U.S.
Equity Trade’s Impact
Dolo Rolling Company is certified as an equity-owned brand in the city of Oakland, California, and is also an Equity Trade verified brand.
Since Dolo Rolling Co. gained its certification, the company’s Chief Operating Officer (COO), Daniel Won, says that the partnership has helped connect the business with retailers.
“They've helped us start conversations with dispensaries [and] retail partners,” says Won.
This is especially important because, as Won describes, grabbing the attention of their buying managers can be competitive. In some cases, it can take years trying to have discussions with customers.
“There are so many brands. There's so much competition right now that it's really hard to even get the attention of the purchasing manager,” he explains.
However, now, Dolo receives more recognition from retailers. In turn, more consumers are exposed to, and able to purchase Dolo’s products, further supporting equity-owned brands.
Establishing these connections and creating shelf space for these brands is paramount. For example, Garica and Entity Equity Trade helped delivery platform Eaze create a menu for social equity-owned businesses.
“They did $10 million in retail sales on their social equity menu last year,” Garcia explains. The brands proved to be some of the most popular on the platform. Not only did that speak to the quality, but the importance of visibility for these brands.
In terms of Entity efforts, equity businesses open the door for a lot of the equity brands in California.”
They do it all at equity businesses, says Won. However, the organization will receive funding from individual jurisdictions and the state shortly soon.
Garcia’s ultimate hope for Entity Equity Trade is that it goes beyond cannabis so other industries can become part of the equity community.
As of right now, he says that “this is the only place that [the Equity Trade Certification] exists, officially. But we want to have good, better industries in other parts of our society.”
“So if there is a social equity program outside of cannabis, now, I can certify that baked goods. I can go to Whole Foods and say, hey, you need to have a social equity menu shelf here and promote some of these and push for shelf space for those products,” he continues. “And so it's a greater way of us trying to build up the visibility and the collective work of our community and businesses and then make sure that that dollar is revolving within our community a lot more than it has been.”
“It's not just about making money,” Garcia states. “It's finding ways to cooperatively work together for the same purpose.”
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