Diversity in the Cannabis C-Suite Returns to Pre-Pandemic Levels, Study Finds

Many female and POC executives left the cannabis industry during lockdown. Why did they go, and what made them come back?
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Diversity among cannabis executives has returned to pre-pandemic levels. At least, that’s according to a new study, which combined surveys and data reports, and found that, as of today, around 39% of business owners in the industry are women, while some 24% are racial minorities – a step up from 2021 (22% and 13% respectively), and similar to 2019 (36% and 28%). 

Although the study’s authors quickly mention a couple of possible explanations for this development – like layoffs, inflation, and consolidation – they stress that their goal was to learn if diversity levels went up, not why. This leaves us with two important questions that, even if they can’t be answered definitively, are still worth investigating: what caused so many women and people of color to leave the cannabis c-suite during the pandemic – a time when weed sales soared to an all time high – and what enabled them to come back now – in a time when the industry isn’t doing so well anymore?

Because women and people of color were adversely affected by the pandemic – losing jobs and suffering from a disproportionate number of medical complications thanks to America’s crooked health system – it follows that some of those adverse effects also applied to women and people of color working in cannabis. Think of a Black business owner being forced to leave the industry because of COVID-related health complications, or a female executive having to put aside her business to care for her children. 

Once out, it’s difficult for marginalized individuals to find their way back in. In an opinion piece published in the LA Times, Al Harrington, CEO of the Black-owned cannabis brand Viola, discusses a myriad of challenges African American entrepreneurs are subjected to because of the color of their skin. There’s limited access to financial resources, requiring them to use their own cash, and biased interest rates that make it almost impossible for fledgling companies to turn a profit. 

Another explanation for the temporary drop in C-suite diversity – as well as its delayed recovery – may be the inordinate amount of bureaucratic red tape that constricts new cannabis brands. The MJBizDaily study highlights the experiences of a number of executives, including one Madison Shockley who, when trying to open the Off the Charts dispensary in Los Angeles, waited a grueling three years before the city finally finished its building and safety inspection. 

Perhaps the drop in C-suite diversity is a statistical illusion – perhaps the absolute number of women and POC executives has remained somewhat consistent while that of white-owned businesses rose, bringing down the former’s overall proportion. Between 2019 and 2023, Illinois, Arizona, New Jersey, Montana and South Dakota have legalized recreational marijuana. As with any other industry, it’s often the biggest companies run by the most affluent people that get the first piece of the pie, followed by their smaller, often more diverse competitors. 

Another part of the equation could be the failure of some social equity initiatives, defined by the US Department of Cannabis Regulation as funding meant to address the “disparities in life outcomes for marginalized communities” that suffered during the War on Drugs. New York, a leader in equity, plans to establish a $200 million financing pool for startup costs and rental properties. Waiting for additional investors, the plan has yet to materialize – a delay that has severely stunted the growth of the city’s cannabis market. 

Equity initiatives in other states have been met with greater success. The MJBizDaily study spotlights Annu Khot, an Indian immigrant who, after qualifying for the program in Illinois, was able to launch Sociale Dispensary in suburban Chicago. “It’s exceeded our expectations,” Khot told MJBizDaily, which noted that between 25 and 30 of her employees were victims of marijuana arrests and incarceration. 

Also spotlighted is Alicia Deals, who became the first Black person to open a cannabis store in Arizona after winning the equity lottery. “It was more than survival of the fittest,” she said, reaffirming the struggles of marginalized businesses. “I was fortunate enough to partner with some big guys that didn’t want to take advantage of me.”

While it’s good to see diversity in cannabis on the rise, the industry has a long way to go before it can truly call itself diverse. This is not a particularly woke statement, even if it reads like one. The War on Drugs was devastating for the country’s lower classes, worsening the very issues it set out to eradicate. It took place during our lifetime, and was carried out by the politicians we voted for. As such, the state and its constitutions have a moral obligation to compensate the victims. 

Studies like this can help in this effort because they allow us see how far we have come and how much further we still need to go. Unfortunately, the outlet states, surveys at the state level remain limited, making it harder to paint a comprehensive picture of the national industry. If only for transparency’s sake, closed states should follow the example set by open ones like Colorado, which as of 2021 has been conducting detailed surveys on a yearly basis.  

“Are early entrants leaving the cannabis industry and being replaced by a new and very different group of owners?” “Are there enough new opportunities for women and people of color?” These are some of the questions the study tries to answer, and for good reason. With more information at our disposal, we will know not only the what of industry trends, but also the why

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