Women and minorities currently hold a greater percentage of ownership and executive roles in the cannabis industry compared to traditional corporate America.
While still very much in its infancy, the United States marijuana market has already outpaced the 2000s dot-com boom, surging 30 percent to $6.7 billion in the past year. Taking advantage of the young booming marijuana industry are women and minorities, who have been able to exert influence and succeed at a greater percentage compared to the larger U.S. business landscape.
The shift toward marijuana legalization has only picked up pace over the past five years, and the relative youth of the cannabis industry has led to greater opportunities for women and people of color. In long-established industries, there are generations of businesses that have been dominated by white males.
While there’s still a lot of work to be done in creating spaces for women and people of color, data suggests that America’s marijuana industry is already ahead of traditional businesses when it comes to diversity and inclusion.
Women and Minorities in the Marijuana Industry: A Look at the Numbers
Marijuana businesses have surpassed traditional corporate ones when it comes to the percentage of women and people of color in ownership and executive roles.
According to an extensive report published earlier this year by Marijuana Business Daily, women make up 26.9 percent of executive positions at cannabis businesses in 2017, a percentage higher than the 23.0 percent average across the larger U.S. business landscape.
While minorities hold just 13 percent of executive roles across all American businesses, they claim 17 percent of leadership roles in the cannabis industry. Female minorities make up 5.3 percent of executives in the marijuana industry, up from 4.5 percent of the U.S. businesses average.
For nearly every sector of the marijuana industry, the portion of executive positions filled by women is higher than the national average for all businesses.
Women have found greatest success at ancillary service firms, where they:
- Own or have founded 43.3 percent of the companies
- Hold 42.0 percent of executive positions
- Occupy 35.5 percent of all leadership roles at medical marijuana or recreational marijuana retailers
- Own or have founded 33.3 percent of marijuana testing lab companies
Like women, minorities occupy a significantly higher percentage of executive positions in some sectors of the marijuana industry compared to all U.S. businesses as a whole. Minorities at wholesale cultivation businesses account for 24.1 percent of executive roles and make up 20.8 percent of leadership positions at ancillary firms.
Hurdles Minorities and Women Still Must Overcome
While women and minorities have found a unique level success in the U.S. marijuana industry, they continue to be vastly underrepresented in ownership and leadership roles.
White males still own a huge majority of the industry’s businesses, according to the Marijuana Business Daily report.
In the cannabis industry in 2017:
- 73.0 percent of executives are men
- 74.0 percent of owners are men
- 81.0 percent of owners are white
- 5.7 percent of owners are Hispanic
- 4.3 percent of owners are African American
- 2.4 percent of owners are Asian
The war on drugs continues to disproportionately affect people of color, as well. Despite roughly equal usage rates, black Americans are still 3.73 times more likely than white Americans to be arrested for marijuana.
This is significant because, in states that have legalized medical marijuana or adult use cannabis, many require that marijuana business license applicants have no criminal record, which disproportionately impacts people of color. Additionally, the typically expensive application and licensing fees disproportionately make it more difficult for minorities to start a business.
Priscilla Vilchis, CEO of a cannabis growing and manufacturing company operating in Nevada was earlier this year the only minority woman to receive preliminary approval for licenses in Los Angeles County.
Efforts to Address a Downward Trend
It appears that the executive structure of businesses in the traditional economy has begun to seep into the marijuana industry.
While the percentage of women holding executive positions at marijuana businesses is higher than the nation’s average for all businesses, the Marijuana Business Daily report found that it has fallen considerably over the past two years, from 36.0 percent in 2015 to 26.9 percent in 2017.
Financial site Bloomberg suggests that the precipitous drop in female representation could be related to the high start-up capital needed to obtain a license to grow, manufacturer or distribute cannabis products in states where it’s legal and the challenges of traditional banking and loan services. Men, the publication claims, often have more money to start with and thus better equipped to start a cannabis business.
Marijuana Business Daily attributes the dip in women to an influx of entrepreneurs and investors who have come to grab a piece of the booming industry. It also suggests that seasoned executives from other industries, predominately men, are now being selected to head cannabis businesses.
Unconscious bias could also be playing a factor in a lack of funding opportunities for women. Findings in a recent study by Harvard Business Review indicate that investors prefer business pitches presented by male entrepreneurs compared to those by female entrepreneurs, even when the pitch is the same.
There are efforts being made to entice more female and minority entrepreneurs, however. For example, Pennsylvania’s medical marijuana industry included a diversity requirement, and its Department of Health gave greater consideration to license applications that demonstrated the firms were diverse by including minorities, women, and veterans among their staff and financial backers.
Ohio’s law sets aside 15 percent of its medical marijuana-related licenses for minority businesses.
Massachusetts’ ballot initiative inserted language encouraging participation in the industry by those who had been “disproportionately harmed by marijuana prohibition and enforcement,” although it didn’t specify how that would be accomplished.
After unfairly targeting people of color for cannabis crimes even while medical marijuana was legal, the city of Oakland, California is now giving license priority to minorities who had been previously arrested.
Panels, such as the “Minority Leaders in Cannabis” event hosted by nonprofit Women Grow at Howard University earlier this year, are being put on in an effort to influence and encourage women and minorities to succeed in the cannabis industry.
Learn More about the Economic Impact of Marijuana Legalization
As of now, 29 states have legalized medical marijuana and eight have legalized adult use cannabis. In those with operational markets, the cannabis industry has offered an economic surge at both the state and local level, generating hundreds of thousands of jobs and opening new opportunities for entrepreneurs.
Jobs within the cannabis space are expected to soon exceed those offered by the manufacturing, utilities, and government industries.