True social equity in the cannabis industry is an aspirational goal that can and must be achieved. The nascent (when compared to other major industries) multi-billion dollar legal cannabis space in America includes participation from more states than ever but industry stakeholder diversity is trending in the wrong direction. This is a problem that can and must be dealt with.
Many movers and shakers in the cannabis space have gathered in Las Vegas for MJBizCon 2021 and MJ Unpacked. It’s an exciting time for tens of thousands of attendees who are ready to get back to the business of conducting business after an extended pandemic break. As the in-person gatherings ramp up, now is the perfect time to look back where the industry started, assess where it is today, and have uncomfortable but necessary conversations about how we get more people involved for the growth of the industry and long-term health of the country.
It is no secret that the war on drugs has negatively impacted communities of color more than others. As individual states design and open up their legal cannabis markets, implementing social equity programs to help offset inherent disadvantages that exist in securing capital needed to provide a more level playing field for interested cannabis entrepreneurs is a necessity. Some states have tried to create programs dedicated to closing that starting financial gap while others are still trying to establish their parameters as to how their social equity programs will operate.
MJBizCon CEO Chris Walsh touched on the topic of social equity and diversity during the opening session of MJBizCon 2021 in Las Vegas. The industry is not nearly as diverse as it could be. “It’s turning into every other industry, and in some cases, it’s worse,” said Walsh. “We all can accept this, acknowledge it and work to make this a more inclusive industry.”
The lack of diversity in cannabis also includes a large discrepancy between male and female personnel. According to a report from MJBizDaily, the percentage of executive positions held by minorities and women in the U.S. cannabis industry actually fell between 2019 and 2021. This happened despite states increasing their focus on improving racial diversity within the cannabis industry. That same article stated that competitive markets tend to favor businesses with white men in ownership and leadership positions primarily because of their established access to capital.
More executives from other mainstream business sectors entering the cannabis industry is only accelerating the increase of white men in power positions. Add in large multi-state operators (MSOs), that are not well-known for having diverse executives or boards, while some MSOs are quickly gobbling up available legal cannabis licenses in cultivation, manufacturing and retail in states from coast to coast, which all causes frustration and an uneasy feeling for many people.
The legal cannabis industry was supposed to be different as the idea of cannabis decriminalization meant freedom for those who have been hassled, arrested or jailed for previous cannabis consumption. Too many people are still being limited by fair access to funding and obtaining licenses. We are simply not there yet and won’t ever get there unless everyone has access to enter the game.
It is true that cannabis has made progress but for the industry to reach its full potential (even when full federal legalization occurs), aspiring cannabis entrepreneurs of all backgrounds must be welcomed with open arms and they must be supplied with the tools necessary to chase their cannabis dreams.
We’d like to hear your thoughts on this subject because Oster and Associates has been helping cannabis brands evolve since 2017 and other industries grow for more than 35 years. Please let us know how we can help you reach your cannabis business goals.