NJ Black businesses: are they thriving, or just surviving?

Faye Coleman, a board member for the New Jersey African American Chamber of Commerce, had a clear description for how she viewed the state of Black business.

“Putting my oxygen mask on and hoping it doesn’t run out,” she said.

Coleman, who is building a retail cannabis store in Atlantic City, has found success. She had previous Fortune 500 experience and was one of the few people in the cannabis industry who had control over her business and real estate.

“Having a team that was curated for growth versus start-up” was key, she said.

While Black-owned businesses in New Jersey have been opening at a rapid rate, chamber leaders say they’re worried about how many will survive.

An estimated 10% of the state’s businesses, about 88,000, are Black-owned, and the community represents 15% of the labor force, 2023 statistics from the state show.

Black business ownership grew about 25% from pre-pandemic levels, according to to a 2022 report by the state Economic Development Authority. The EDA cautioned that while this was a “welcome sign,” many were small businesses “usually strapped for cash” and that access to credit remains one of the “biggest challenges” for Black entrepreneurship and business cultivation.

African American Chamber of Commerce president John Harmon said the majority of Black businesses are sole proprietorships — and they’re staying that way.

“Black business starts are up, so that means a lot of Black people are starting businesses, but in terms of growing at an appreciable clip where they can sustain themselves, the answer’s no,” Harmon said when asked about whether the landscape for Black business in New Jersey was an overall good one.

Chamber leaders at a conference in early February and at a gala celebrating Black History Month last week said their hopes for Black business growth are mixed with frustration. And many believe New Jersey’s ruling Democratic Party takes them for granted.

Harmon makes his point by reciting two numbers: 94, the percentage of Black voters who supported Democratic Gov. Phil Murphy’s candidacy in 2017; and 1, for the tiny percentage of state contracts Black businesses received from 2015 to 2020, according to a recently released disparity study commissioned by the Murphy administration.

The study, which looked at $18.6 billion in state contracts covering everything from construction work to engineering services or supplying computer equipment, included years under the Democratic governor, who took office in 2018.

Black businesses received 0.43% of all formal construction prime contracts awarded during the study period, representing $3.3 million, or 0.03%, of the construction prime contract payments.

“I knew it was bad,” Harmon said of the study. “I didn’t know it was this bad.”

Underneath a glittering ballroom last week at the chamber’s gala, Lt. Gov. Tahesha Way said Murphy’s administration was committed to making a change.

“The report’s numbers confirm what members of the Black business community have long known to be true, but we are authentically committed to taking this issue head on,” she said.

Noting how Black voters supported Murphy, Harmon wants to know how the Democratic governor’s administration will keep its word on business equity.

“This obligation is owed to us by the current administration because they benefited ... two times,” he said.

Harmon and other leaders agree Black businesses have been hurt by generations of inequities — from job discrimination to education, criminal justice and health. The bottom line shows in economic stability: A 2022 New Jersey Institute for Social Justice report that found the median household wealth of white families in New Jersey was $322,500, compared to $17,700 for Black families.

In 2020, Citigroup, one of the largest banks in America, estimated that the past 20 years of racism against African Americans alone had cost the country $16 trillion.

“Providing fair and equitable lending to Black entrepreneurs might have resulted in the creation of an additional $13 trillion in business revenue and potentially created 6.1 million jobs per year,” the study stated. It also estimated that had those gaps been closed, America could have netted $5 trillion in five years.

Denise Anderson, a chamber board member who runs her own healthcare consulting firm, said the state needs to make diverse businesses a priority. She said that can only be accomplished with transparency and oversight — and a closer look at not only how many businesses have opened, but what happens to them.

“In order to see this to fruition, we really need accountability,” Anderson said of the state’s disparity study. “There has to be accountability at the government level and transparency with that accountability because what we saw was this five year look-back at the data. We can’t afford to look at this again in another two or even three years.”

One part of state government that does make diverse businesses a priority and closely tracks their outcomes is the New Jersey Cannabis Regulatory Commission.

When cannabis was legalized in New Jersey, Murphy called it one of the largest opportunities for people of color to generate wealth. Black, Hispanic and Indigenous populations made up the majority of collateral damage from drug war policing and the Murphy administration claimed it was committed to healing those harms along with the Senate President.

The commission bumps diversely owned businesses and people who were previously arrested for cannabis to the front of the line in its review process for licensing dispensaries. It also discloses demographic information.

The agency has licensed Black businesses at an 18% rate, but the percentage of operational businesses that have gotten their doors open thus far is at 7%.

Senate President Nicholas Scutari (D-Union) has claimed that legalizing cannabis “was considered with the expectation that it would begin to erase the ravages wrought by a decades-long failed “War on Drugs.”

When the market opened, Scutari pushed for large companies to get a headstart and after the commission started fining large cannabis companies for not following medical access and collective bargaining rules, Scutari suggested getting rid of the commission.

CRC commissioner Charles Barker, a Black male, said at the commission’s February meeting he was not satisfied with outcomes.

“I’m very concerned and it pains me to be here during Black History Month to share through my purview from what I see, our cannabis industry in New Jersey is shaping up to be dominated by businesses whose majority ownership do not reflect those that have been most harmed by the War on Drugs,” he said. “I hope you the people demand it from us and demand it from New Jersey leadership.”

Jason Williams, a Justice Studies professor at Montclair State University, did not blame the commission but said it added to the belief that New Jersey Democrats make promises about Black business equity to get votes but don’t deliver after the election.

“I can’t help but go back to the issue with the cannabis dispensaries and how they completely failed to ensure that we get in that door,” he said. “I think this is also representative of the wider patterns in the business community.”

Black cannabis businesses in a struggle to open often lack capital and have trouble securing real estate for their dispensaries. And while the state can grant a license to operate, municipalities have the final say on whether a cannabis business is allowed to open.

Critics say this has exposed these businesses to the whims of local officials — and in some cases state Democratic Party leaders working in the industry, including Democratic State Committee chair LeRoy Jones, who is Black, and vice chair Peg Schaffer. Jones’ lobbying firm and Schaffer’s law firm have represented larger out-of-state cannabis businesses in what the commission predicts will be a $1 billion industry this year.

Community leaders stressed economic justice at the chamber events and during a virtual panel discussion sponsored by the Center for Cooperative Media at Montclair State University and Mosaic, a website covering issues about and for people of color, the disabled, the LGBTQ community and New Jersey’s diverse communities.

New Jersey’s Legislative Black Caucus Chair, State Assemblywoman Shavonda Sumter, D-Passaic, voiced frustration about how legislators of color run into roadblocks to get their policies passed.

Dr. Saladin Ambar, a Rutgers University politics professor, said energizing a younger generation turned off by the political process is key to the effort to get more Black voters to the polls — which in turn could bring more attention to these issues.

Newark Mayor Ras Baraka, who also participated in the discussion, stressed equity later that night when disclosing his intention to run for governor.

Harmon is proposing the Murphy administration hold a summit to discuss how previous promises have worked out and what to do next. He said administration officials have agreed to meet with a task force the chamber has formed.

Way, the lieutenant governor, did not outline any specific plans in vowing the Murphy administration is serious about change. But, last year the Murphy administration and state Economic Development Authority named managers of a $20 million Black and Latino seed fund.

“New Jersey is committed to creating an environment where all entrepreneurs, regardless of race or background, have the same opportunities and access to resources needed to succeed,” Murphy said while announcing the managers. “This fund will unlock capital in Black and Latino communities and diversify our state’s innovation economy — breaking down barriers that have plagued these communities for far too long.”

The chamber and other organizations have set up programs to help Black businesses. For example, The Sistahs in Business Expo, which was created in New Jersey, hosts small business expos across the nation to educate and support Black women entrepreneurs, a group that’s increasing at a fast rate. It comes to Newark in April. The African American Chamber of Commerce has multiple programs around training, contracting and technical assistance.

Faye Coleman, the African American Chamber of Commerce board member, said the state simply needs to do more.

“Everyone who can do something within their organization is doing something ... but we need the state,” she said. “Money is always available for the initiatives you see value in. And right now I would like the state to see the value in us.”

From NJ.com