The legal cannabis business has always worked to become as mainstream as possible as a way to tap into the vast consumer sector in the U.S. and Canada.
Unfortunately, the industry may be mirroring the rest of the business world in terms of unequal representation by women and minorities in senior roles.
The percentage of executive positions held by women and minorities in the U.S. cannabis industry has dropped from two years ago as white men migrated into the business, according to a survey released Monday by MJBizDaily.
‘Social equity initiatives and cannabis legalization are now intertwined, but there is still no magic bullet to improve the landscape. It is encouraging, however, to see new markets wanting to improve upon the programs that came before and older markets attempting to fill the gaps that still exist.’ — Jenel Stelton-Holtmeier, editor, Women & Minorities in the Cannabis Industry, MJBizDaily
The share of women in senior ranks of cannabis companies fell to 22.1% in 2021 from 36.8% in 2019, according to the survey. The latest figure falls short of the 2020 national average of 29.8% of women holding executive positions in all industries.
The share of minorities in executive positions at cannabis companies dropped to 13.1% in 2021 from 28% in 2019. On this front, the cannabis industry is in line with the 2020 national average of 13% of executive positions held by minorities across the economy.
MJBiz said industry experts suggested that women and minorities lost ground as white men entered the top ranks of the business partly because they offered “established access to capital” to help grow companies.
More executives from mainstream sectors are opting into the cannabis industry and thereby accelerating the increase of white men in power positions, MJBiz said.
Jenel Stelton-Holtmeier, editor of the report at MJBizDaily, said racial and gender diversity in the marijuana industry is still lacking, particularly in ownership and executive positions, despite efforts to promote diversity.
“Social equity initiatives and cannabis legalization are now intertwined, but there is still no magic bullet to improve the landscape,” Stelton-Holtmeier said. “It is encouraging, however, to see new markets wanting to improve upon the programs that came before and older markets attempting to fill the gaps that still exist.”
The diversity push is not the only challenge facing the sector, the report found. There is also a lack of data on female-owned businesses and minority ownership.
“Few states provide robust data concerning ownership demographics, and those that do, provide data based on different classifications. As a result, MJBizDaily’s
data team extracted a sample of data from select markets to provide a snapshot across the industry,” said the report.
Some positive changes have already taken place since the first report was published in 2017, said Stelton-Holtmeier. In many states now, people with past drug convictions are no longer barred from owning a marijuana business, which wasn’t always the case, for example.
MJBiz released its 2021 report, “Women & Minorities in the Cannabis Industry” as the industry gathers in Las Vegas on Oct. 20-22 for the MJBizCon: Marijuana Business Conference and Cannabis Expo.
As states such as New York prepare their regulatory structure for the legal adult use market, industry participants are attempting to correct inequalities in the business.
States have been awarding social justice licenses to neighborhoods impacted by the War on Drugs, but many have been struggling to raise capital.
The Cannabis ETF has fallen 2.4% in the year to date, while the AdvisorShares Pure US Cannabis ETF has fallen 29% and the S&P 500 has gained 14%.
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