Report: Women and minorities are still grossly underrepresented in the cannabis industry

By Natan Ponieman

There is a myth surrounding the legal cannabis industry. Forged from the ashes of an illicit business, cannabis is often seen as a space run by revolutionaries ready to challenge the injustices caused by the status quo.

This notion has often perpetuated the notion that cannabis and social justice are inseparable, two sides of the same coin. However, according to a recent report, the cannabis industry is no exception to the general under-representation of women and minorities throughout the US economy.

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“There is still a lack of racial and gender diversity in the marijuana industry — particularly in ownership and leadership positions,” the MJBizDaily research team’s report states.

Report author Jenel Stelton-Holtmeier notes that social justice initiatives are an inseparable part of cannabis legalization today, but the solution is still not magical.

Are women well represented when it comes to cannabis? Not really

According to the MJBizDaily report, only 19% of cannabis companies in Colorado, Massachusetts, Nevada and Ohio are owned by women. In the absence of reliable statewide data on this subject, the company used these states as examples to create a snapshot of the federal market.

In Massachusetts, that number is only 5%.

“Lack of access to capital remains a key challenge for women looking to start a plant-touching business, regardless of the market,” the report’s analysts wrote.

The amount of capital needed to start a plant-touching cannabis business can be in the six figures, and the networks of investors who can provide that amount of money can be difficult for women to tap into, the report found.

In 2021, the number of women in leadership positions fell below the national average for the larger US corporate landscape. This applies to almost all sectors of the industry.

RELATED: Is the Cannabis Industry Racist?

This trend had reached an encouraging peak in 2019 at 38.6%. However, the figure continued to decline to 22.1%.

The sub-sector where this figure is of most concern is the investment side of the industry, where “fewer than 5% of executive positions at cannabis-focused investment firms are held by women,” potentially leading to the difficulties in women’s access to capital noted above entrepreneur.

In terms of regular employment, including non-senior positions, women account for 41.9% of those employed in the industry, which is slightly below the national corporate average of 46.8%.

Minority groups also fall far below average when it comes to cannabis possession

The report covered Nevada, Colorado and Michigan to show different stages of growth in the cannabis industry, from maturity (Colorado) to nascent (Michigan).

In all three states, most businesses are non-minority owned, with white or Caucasian ownership accounting for 63% in Nevada, 79% in Michigan, and 83% in Colorado.

“Colorado, with its leadership in establishing legal cannabis markets, has not taken diversity into account when developing its programs.”

5 ways to avoid unhealthy marijuana habitsPhoto by rez-art/Getty Images

In New York, where adult-use cannabis was licensed earlier this year, there appears to be an intention to tip the balance, with a stated goal of giving 50% of adult-use licenses to social and economic justice applicants and 40% of the taxes to be awarded go to a reinvestment fund for community grants.

RELATED: Is cannabis living up to its commitment to inclusivity towards minorities?

California announced a similar program. Marijuana Moment reported that the Golden State is providing $100 million for grant programs to support marijuana social justice initiatives.

In 2021, minority executives also ranked very low on the charts, accounting for just 13.1% of total executive positions, in line with the average for all U.S. companies.

Only as a source of minority employment does the cannabis industry surpass the national average, with 32% of the workforce belonging to a minority group versus just 22% for the overall economy.

This article originally appeared on Benzinga and has been republished with permission.

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