Female plant, all male executives – where have all the women gone in cannabis?
Gender equality in the cannabis industry is a goal worth reaching toward— but, as of right now, it’s a long way off. In 2019, women in cannabis held the most C-suite roles compared to traditional industries. But recent data shows that the number of women in C-suite roles shrinks yearly and that women are less likely to receive venture capital (VC) funding on cannabis proposals. Though what’s transpired over the last four years is disappointing, there are clear steps that the industry can take toward equity.
In the next decade, year after year, Gen Z will age into buying regulated cannabis products, and Gen Z women will continue growing into the largest consumer segment. A March 2022 Akerna data report revealed that in 2021, women took 38.3 percent of the market share, compared to 35 percent in 2019.
Headset data confirmed this upward trajectory, showing that women absorbed 0.27% of sales from men from January 2021 to December 2022. The buying power of women is growing, but when it comes to business owners and executives, the amount of women continues to shrink.
The “Diversity, Equity & Inclusion in the Cannabis Industry” report from MJBiz Daily Research examined the U.S. cannabis industry as of November 2022. Findings showed women executives taking up 36.8 percent of the industry in 2019, a number that was down to 23.1 percent in 2022. This data raises the question of why women in executive cannabis roles would dwindle as their market share increases.
The COVID-19 pandemic hit the U.S. in early 2020 and played a role in growing gender disparities in the workforce. It could have also fueled the exit of female executives in the cannabis space, though the research shows that lower-level roles saw the highest decrease of women during the early pandemic.
Where have all the women gone?
In 2021 Arcview released “Gender Disparity in the C-Suite,” detailing the exclusion of women from C-suite roles. Reasons include “tokenism,” when one woman (usually white) is placed in a public relations, marketing, or specialty role to perform diversity, when in reality, “The pathways that lead to those power positions, like President or CEO, are rarely offered to women in any significant way, thus limiting access to those positions.”
The report also cites a lack of mentorship for women in the space– and worse, predatory practices disguised as mentorship.
Women executives cite a lack of funding and honest investors as the most common barrier to entry. Nancy Whiteman of Wana Brands, a multi-state operating edibles brand, went on record about the difficulties of raising capital for a woman-led project. She claimed that women receive 30-40 percent less valuation than men on similar projects.
Whiteman told Yahoo Finance, “What has ended up happening is that as states have adopted more limited license models, it’s become much more expensive to get in the game. And so, it favors the people who’ve traditionally had access to capital, which are men — white men.”
Pitchbook data supported this testimony, revealing that women received 2.1 percent of VC funding across all industries in 2022. The data also showed that women who co-founded businesses with men received 16.3 percent.
The theory is that men often fund other men because they invest in people who look like them. In response, firms recruited women into private investment. But one study showed that women who seek VC funding from all female investors have difficulty meeting goals in additional fundraising rounds. After combing through all of this data and testimony, the root of the gender disparity seems systemic, with deeper foundations than the cannabis industry.
How can the industry recover?
While VC funding shrinks and female executives become less common–women are still a growing segment of the consumer market share. This bargaining chip could be a catalyst. If women spend their dollars on women-led brands in women-run stores, it could shift investment into equal territory.
“Gender Disparity in the C-Suite” recommended steps that companies can take toward equity, including establishing anti-bias and Diversity, Equity, and Inclusion Training, becoming an anti-racist organization, and setting aggressive goals for boosting women’s numbers. Increasing women’s numbers, the report states, requires leadership training, sponsorship, and high-profile assignments. These things are up to leadership, who oversee hires, promotions, and team diversity.
The report also cites the responsibility of white women to step into mentorship roles.
“White women in cannabis can take a step toward equity by recognizing that BIPOC women stand with them in seeking to achieve gender parity. We make progress towards gender parity when those who are not marginalized are able to courageously challenge systemic discrimination and oppression,” the report reads.
A few women-run organizations have taken steps towards achieving gender parity by these terms. For example, THC Staffing Group hosted two cohorts through a BIPOC mentorship program which sets people of color up for success in the industry.
Networking groups like Women Empowered in Cannabis (WEIC) are connecting diverse groups of women in the space and taking actionable steps toward equity. WEIC partnered with Panther Group to provide tools to increase funding for women-led businesses. The groups released this free guide as a resource for female entrepreneurs preparing for a fundraising round.
This issue is in a phase of advocacy and activation– meaning that people must accept that gender disparity exists in the cannabis space and take active steps to achieve equality. As the industry dismantles oppressive structures, it’s on people given the power (in this case, men, a majority of which are white) to speak up in meetings and advocate for women in their networks.