The percentage of women and members of minority groups holding executive positions in the cannabis industry has returned to pre-pandemic levels after a significant drop during the past three years, according to a new report from MJBizDaily.
In 2019, MJBizDaily estimated that more than 36% of marijuana executives were women and 28% were from minority communities.
Whether by choice or not, people from both groups exited cannabis leadership positions in 2020 after the COVID-19 pandemic upended the world economy.
By 2021, women were estimated to account for only 22% of executive positions in the marijuana industry, while people from minority groups represented just 13%. That didn’t change much in 2022.
This year, however, diversity returned to the C-suite for reasons that have yet to be determined.
According to the 2023 report, “Diversity, Equity & Inclusion in the Cannabis Industry,” women account for 39% of marijuana executives and racial minorities 24%.
However, the state of women and people of color in business ownership has proved to be a different story, particularly for women.
Nonwhite ownership of cannabis businesses did grow this year grew to almost 19% from 15% in 2022, according to MJBizDaily survey data.
That is more in line with 2021, when people from minority communities were estimated to own more than 20% of marijuana businesses.
However, woman ownership of cannabis companies slid to 16% this year from an average of 21% the past two years.
The forces behind the shifts in leadership and ownership will take time to understand.
A post-pandemic return to normality could be the cause.
Or is it just a reflection of a struggling economy?
Or maybe a mix of both?
Either way, ownership is always evolving.
For example, are early entrants leaving the industry and being replaced by a new and very different group of owners?
Are there enough new opportunities for women and people of color?
The data can point us in the right direction, but the causes will be found in the stories of the participants.
Below is a sampling of individual states that monitor cannabis diversity, albeit it in different ways.
Colorado
At the state level, demographic data on marijuana businesses remains frustratingly limited.
Few states survey or track diversity in their cannabis programs, making it harder to understand the issues of diversity from state to state.
Colorado is an exception.
The state has been releasing employee and ownership license demographics since 2021.
As of July, the latest numbers available, 18.8% of cannabis license owners in Colorado described themselves as something other than Caucasian, or white.
That is an increase of almost 4 percentage points since the state began tracking.
Growth is often good, but the disparity between employees and owners is worth noting.
The percentage of nonwhite employees in Colorado marijuana businesses is almost double that of company owners.
Of the more than 30,000 registered employees working in Colorado’s marijuana industry, 35% describe themselves as something other than white.
This matches the latest census numbers, as the state is roughly 65% white.
Yet 81% of cannabis business owners are white.
Another way to look at this is through Colorado’s Hispanic population.
According to the U.S. Census, Colorado is 23% Hispanic, while Colorado’s Marijuana Enforcement Division reports that 18% of registered cannabis employees are Hispanic/Latino, though only 9% are owners.
New Mexico
A lack of demographic data and how the data is defined can make it hard to compare states.
According to New Mexico data, women account for 29.5% of that state’s cannabis business owners, while members of minority groups represent about 24%.
If these numbers seem high compared to other states, it stems from the way the state counts ownership.
Any person with at least a 10% ownership stake in a marijuana business license in New Mexico is included, whereas other states count only the majority owners.
Another example is Nevada, which includes management within its ownership numbers.
In 2023, women accounted for almost 28% of ownership/management positions in Nevada, while racial minorities were close to 24%.
Regardless of how it is counted, any data on diversity in the industry is better than none.
Time will tell if the positive gains in leadership will have a meaningful impact on the industry.
The free report, “Diversity, Equity & Inclusion in the Cannabis Industry,” can be downloaded here. (Full Story)