Business
Opinion: The 5 biggest problems faced by cannabis social equity founders
Social equity founders still face an uphill battle in the cannabis industry, despite policies specifically designed to level the playing field for minorities and those affected by the war on drugs.
While lawmakers’ social equity provisions help some founders get a foot in the door, they don’t always reduce barriers enough for those founders to turn a profit and keep the lights on in the long term.
Here are the five biggest problems social equity founders face in the cannabis industry – and how to navigate them:
1. Capital
Even with a cannabis business license in hand, social equity founders face a tremendous hurdle: financing their business plan.
Because of the federal prohibition of marijuana, many of the financial networks and investment tools that mainstream small and midsized businesses and startups rely on for financing simply aren’t available to cannabis businesses.
Banks, hedge funds and private equity funders often have shied away from the cash – and crypto-heavy – aspect of the cannabis industry – whether it’s because cash-only businesses suggest potential for fraud or because of the extra work required to keep accounts compliant.
An increasing number of financial institutions, ancillary services and grant programs, however, now specialize in marijuana brands – and many give priority to or are eager to work with, social equity founders.
A lawyer who specializes in cannabis business law can be particularly helpful in this arena.
It might feel counterintuitive to pay for expensive legal services when your company’s whole problem is an empty bank account.
But a good attorney who is plugged into your state marijuana industry will likely know fruitful places to start looking for capital and which options best align with your background and intended business.
2. Connections
Connections are important in any business, and they represent another challenge that cannabis social equity founders often must navigate.
Step 1 is to meet other entrepreneurs – particularly those in cannabis.
Because the marijuana industry is small, it often feels as if everyone knows everyone – even in bigger markets such as Denver, Los Angeles or New York.
Seek out networking opportunities around industry conferences such as MJBizCon or thought-leadership events such as the South by Southwest festival in Texas.
Awards ceremonies such as The Emjays also are great places to learn who’s who in the industry.
In addition, social equity applicants can join state or local cannabis business groups, where experienced and like-minded entrepreneurs can offer not only offer camaraderie but also pointers on how they have navigated the challenges and legal problems that social equity founders face.
3. Contracts
The path to success for marijuana companies rests on paperwork – more of it than mainstream businesses face.
That’s exactly why they need to engage a cannabis attorney early on.
Yes, attorneys can be expensive. But reading a contract wrong is potentially far more costly.
From dates to recitals to defining terms, representations and warranties, dispute-resolution clauses and the specific compliance requirements set by different state regulatory bodies, there’s a lot to keep track of.
The consequences for even unintentional missteps can be dire.
4. Taxes
Cannabis businesses have notoriously complicated tax issues.
Because taxes are collected federally as well as on the state level, federal prohibition has an enormous impact on how marijuana brands settle their accounts at the end of the year.
Section 280E of the federal tax code is a notorious thorn in the side of cannabis brands, as it stipulates that most of the expenses that mainstream businesses can deduct or use to qualify for tax credits are off-limits to marijuana companies.
Another bugaboo is that the way state and local excise taxes are enforced often favors large-scale enterprises over small to medium-sized businesses.
For example, a coalition of Colorado cannabis businesses in 2022 wrote to the state’s Marijuana Enforcement Division (MED) requesting a tax holiday to offset the burden of distribution that they saw as harmful to smaller operators and new entrants to the industry, including social equity operators.
As they are in several other states with regulated marijuana markets, Colorado cannabis regulations are structured in such a way that there can be a large gap between the average market rate by which wholesale prices are set and actual market prices.
Large marijuana enterprises and vertically integrated companies are at an advantage because they don’t have to pay additional taxes when products are transferred from the cultivation operation to their retail arm.
Smaller, horizontally integrated businesses must negotiate a contract price that might be very different from actual market prices, forcing newcomers and startups to sell marijuana for a lower rate than larger competitors.
In addition to bringing less revenue per pound, such pricing also distributes a heavier tax burden to companies that are already financially disadvantaged.
As the coalition put it in an open letter to the Colorado MED, “When the market experiences a steep decline, cultivators must continue paying a higher rate of taxation despite their declining revenues. … Any business that sells its crop for less than (the average market rate of) $991 per pound pays an effective tax rate of greater than 15%, and in effect they are subsidizing the tax burden for cultivators who can sell their crop for higher prices.”
5. Long-term resources
As social equity founders know well, it’s best to start off on the right foot.
A misstep on something as routine as a contract or taxation can not only mean lost revenue or human resources, but it also can result in the loss of a business license.
Social equity founders get priority for coveted licenses in states such as New York, where plenty of non-social equity-involved individuals would like to enter the market.
But despite that initial advantage, this cohort faces even greater challenges than average in an industry already full of hurdles.
There is always someone waiting in the wings for social equity founders to fail – and create a new space for their competitors in a fast-moving industry.
That’s why it’s so important to connect with long-term resources in the earliest days of launching a marijuana business.
Many states have special resources for social equity founders – from accelerators to advisory groups to grant programs intended to help social equity founders bridge capital and investment gaps.
Look for conferences dedicated to social equity leadership in cannabis or for broader industry events with dedicated panels or tracks designed to connect social equity founders with the expertise and tools they need to succeed.
And, of course, the connections you forge with fellow founders and ancillary companies serving marijuana businesses are invaluable.
Cannabis is a close-knit community full of potential allies and partners to lean on as you navigate this complex, fast-changing space.
Alyson Jaen serves as of counsel at Messner Reeves law firm. She specializes in corporate and business law for cannabis brands, including licensing and regulatory compliance. She can be reached at ajaen@messner.com.
Source: https://mjbizdaily.com/5-biggest-problems-faced-by-cannabis-social-equity-founders/
Business
Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light
Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.
India’s Indigenous LEO Satellite Vision
Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.
The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.
According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.
The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.
Regulatory Process Moves Forward
Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.
The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.
Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.
Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.
Broadband, Mobile Connectivity, and Strategic Applications
Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.
The company also intends to establish 20 to 22 ground stations across India to support network operations.
Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.
Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.
Major Step for India’s Space and Telecom Sectors
Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.
The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.
Business
Alleged Crores Pharma Scam Mastermind Arrested from Surat
After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.
Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.
Fake Business Deals and Dishonoured Cheques Used in Fraud
Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.
In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”
Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.
Multiple Identities and Repeated Fraud Pattern
Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.
Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.
Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.
Multi-State Surveillance Leads to Arrest in Surat
A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.
Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.
Growing Threat of Corporate Identity Fraud
The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.
Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.
Experts Urge Stronger Due Diligence in High-Value Transactions
Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.
Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
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