Medical Marijuana Zone

MJBizDaily released a report on October 4 called “Women & Minorities in the Cannabis Industry,” which reviews new statistics about female and people of color executives and business owners in the cannabis industry.

According to MJBizDaily’s findings, the percentage of women and minorities in executive level positions in the cannabis industry have dropped between 2019-2021. The national average of women who hold executive positions in the industry throughout the country is 29.8 percent, but over the past two years, women in those positions in the cannabis industry has fallen to 22.1 percent.

In 2019, approximately 36.8 percent of executive positions in cannabis were held by women. The U.S. Bureau of Labor Statistics suggests that the percentage of women in higher level positions in other industries is significantly higher, around 30 percent (in 2018, it was 21 percent).

Likewise, the percentage of people of color in executive positions decreased as well. Currently, only 13.1 percent of those positions are held by people of color, compared to 28 percent in 2019.

In the report’s introduction, MJBizDaily author Jenel Stelton-Holtmeier shares that in this third iteration of this report, much has changed in the industry. “However, racial and gender diversity in the marijuana industry is still lacking—especially in ownership and executive positions,” she wrote. “So too is the amount of hard data by which to benchmark the current state of diversity in the marijuana sector, understand the obstacles standing in the way of a more equitable industry and contextualize the initiatives states are putting in place to address the issue.”

The report was written with data collected from various governmental agencies, as well as statistics gathered by MJBizDaily surveys.

Representation of People of Color and Women in Cannabis Broken Down

The report covers 12 charts reflecting “deficiencies” in the industry’s diversity. On a national level, 19.9 percent of women own a cannabis business. Twenty-five percent operate out of Nevada, 19 percent in Colorado, 10 percent in Ohio and five percent Massachusetts, which makes a stark comparison between older markets, newer markets, and those that currently only support medical cannabis versus recreational cannabis industries.

The report also exhibits the breakdown of women in executive positions, the highest being at testing labs (53.9 percent), consumption lounges/events (48.1 percent), wholesale cultivators (40.1 percent) and ancillary service providers (39 percent). The lowest percent of women in certain roles includes investors, vertically integrated businesses and ancillary technology or products.

“The low rate of executive positions held by women at cannabis investment firms is worrisome, as access to capital has become a critical component of creating and running a successful marijuana company,” the report states. “While cannabis businesses could be started with only $50,000 five years ago, licensing alone in most markets will run into six figures today. With men accounting for such a large portion of leadership in cannabis investing—and possibly favoring management teams led by other men, whether consciously or unconsciously—female executives could have a tougher time raising money.”

Percentages of minority business owners remain small when viewing data collected from Colorado, Michigan and Nevada, according to this breakdown.

Asian American/Pacific Islander: Four percent in Colorado, 3.8 percent in Michigan and 6.3 percent in Nevada.

Black or African American: 2.7 percent in Colorado, 3.8 percent in Michigan and 5.1 percent in Nevada.

Indigenous: 0.4 percent in Colorado, 0.8 percent in Michigan and 2.5 percent in Nevada.

Latino: 7.7 percent of owners in Colorado, 1.5 in Michigan and 12.8 percent in Nevada.

White/Caucasian: 83.7 percent in Colorado, 79 percent in Michigan and 63 percent in Nevada.

“While the data is limited in scope and might not be an indicator of minority representation in the broader cannabis industry, it provides an accurate snapshot of the level of diversity in these three markets and shows a distinct difference in the effect early focus on diversity can have on building the market,” the report notes about the limited data available.

The number of minority executives has also changed. In 2017, the report shows the percentage of cannabis business led by minority executives at 16.8 percent, with a jump to 28 percent in 2019. As of 2021, that number has since decreased down to 13.1 percent, which is only 0.1 percent of the national average.

MJBizDaily suggests that the strong push for social equity could increase these numbers. “Social equity programs are a critical aspect of new regulated marijuana markets, and several of the first markets are looking for ways to fix this gap,” the report states. “But most programs have fallen short of their goals. Some of the contributors to these hurdles include licensing delays, challenges to how the policies are implemented and a lack of access to capital for economically disadvantaged communities.”

The second portion of the report identifies the challenges that minorities face in the cannabis industry, which includes the high price of entry in application and licensing fees, as well as other startup costs such as real estate, renovations, utilities and security necessities. The median household net worth of Black or African Americans ($24,100), Hispanic or Latino ($36,200), or those of other/multiple races ($74,500) is significantly lower than that of White individuals ($188,200).

The report concludes with the suggestion that two things need to change: access to capital must be increased, and social equity programs need to continue to be established. It recommends support for numerous organizations whose goals are to improve general access and social equity efforts.

The post Report Shows Decreased Percentage of Women and Minority Executives in Cannabis Industry appeared first on High Times.