A recent report reveals disappointing new statistics regarding equality and equity among cannabis industry executives and business owners. According to the MJBizDaily report, “Women & Minorities in the Cannabis Industry,” between 2019-2021, the percentage of women and minorities in executive-level positions in the cannabis industry has dropped.
In 2021, the percentage of women’s executive positions in the cannabis industry was 22.1%, less than the 29.8% average in the larger U.S. business landscape. The percentage of minorities in executive positions fell to 13.1% in 2021, down from 28.0% in 2019 but on par with the national average across all businesses.
While diversity is lacking in the cannabis industry, so too is the available concrete data to measure current trends in the cannabis industry. This lack of information makes fully understanding the obstacles in the way of an equitable industry more difficult to quantify, too.
The report also illustrates stark differences in representation between older markets, newer markets, and markets that support only medical marijuana. On a national level, only 19.9% of women business owners are cannabis business owners. Female cannabis business owners account for just 25% in Nevada, 19% in Colorado, 10% in Ohio, and 5% in Massachusetts. The majority are employed in testing labs (53.9%), followed by consumption lounges/events (48.1%), wholesale cultivators (40.1%), and ancillary service providers (39%)
The lowest percentage of women in specific roles includes investors, vertically integrated businesses, and ancillary technology or products.
Indeed, there are challenges in the cannabis industry today that didn’t exist five years ago. In 2017, a cannabis business could get off the ground with $50,000. In many markets today, licensing alone can run into six figures. The biggest battles are often against the longest-standing traditions, like an “old boys network.” Men still account for a large portion of cannabis investing leadership and frequently prefer management teams led by men – consciously or not – making it more difficult for female executives to raise capital.
The report broke down the percentage of minority business owners in three very different cannabis markets:
Colorado Michigan Nevada
Asian American/Pacific Islander: 4% 3.8% 6.3%
Black or African American: 2.7% 3.8% 5.1%
Indigenous: 0.4% 0.8% 2.5%
Latino: 7.7% 1.5% 12.8%
White/Caucasian: 83.7% 79% 63%
The report concedes their data is limited in scope but stands by its depiction of the diversity levels in three distinct markets and “…shows a distinct difference in the effect early focus on diversity can have on building the market.”
The MJBizDaily report also detailed how percentages of minority executives have changed in the past five years. The percentage of minority executives in 2017 was 16.8%. In 2019, it rose to 28% but then dropped to 13.1% – lower than it was in 2017 and only 0.1% of the national average.
Despite the preponderance of social equity programs to diminish this gap, most programs have fallen woefully short of their goals. Some of the contributing factors include “…licensing delays, challenges to how the policies are implemented, and a lack of access to capital for economically disadvantaged communities.”
Pre-existing challenges stemming from persistent racial and gender-based inequities are also a challenge. The median household net worth of Anglo Americans is $188,000. The household net worth for all other minorities lags significantly: Black Americans ($24,100), Latino ($36,200), those of other/multiple races ($74,500).
Financial institutions can resolve some of these disparities by broadening and increasing access to capital. States need to establish more effective social equity programs. The report also recommends support for numerous organizations whose goals are to improve public access and social equity efforts.
The report utilized data collected from various governmental agencies and statistics gathered by MJBizDaily surveys.