THE CANNABIS INDUSTRY STILL LACKS DIVERSITY. IMPROVING ACCESS IS A JOINT EFFORT
With large cannabis companies reporting $1 billion in annual revenue and the big dispensary chains operating in more than a dozen states, it’s time to assess what the marijuana industry is doing to achieve social and economic equity, according to three insiders who spoke recently at the Fast Company Innovation Festival.
Today 23 states and the District of Columbia have enacted measuresto regulate cannabis for adult recreational use; 38 states license it for medical use. Data collected by Reuters shows that legal marijuana sales nationwide are expected to hit $25 billion this year, while analysts say the market is on pace to exceed $100 billion per year by 2030.
But a lack of diversity within the industry is an ongoing problem, while the war on drugs has disproportionately impacted the same communities that lack access. One frequently cited survey, by Marijuana Business Daily, found that 81% of cannabis business owners are white, roughly 10% identify as Black or Hispanic/Latin American, and 25% are female. Cities and states have launched different equity programs to close that gap, but these programs struggle because participants still lack financial resources and know-how.
eanne M. Sullivan, chief investment officer at the Arcview Group who has years of experience working in cannabis, says that while the first step typically involves lining up banking and institutional capital, “we don’t even have that, for the most part. You have to go to high-net-worth individuals, a few funds, maybe some family offices.”
Marijuana’s stigma and its prohibitive classification under the federal Controlled Substances Act are the primary causes: “Many corporations and institutional investors are not even allowed [to invest], because they have vice clauses that will not let them,” Sullivan says.
On a more optimistic note, she says the industry is perhaps witnessing a tide change; in late August, President Joe Biden’s Department of Health and Human Services recommended loosening federal restrictions on marijuana so that it isn’t a Schedule I drug. “We want it de-scheduled,” Sullivan makes clear, whereby someone could “just walk into CVS and buy something.”
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