Women & Minorities in the Marijuana Industry
Posted by Glenn Beierle on 12/06/2017 in Economics
Updated on December 21, 2017. Medical content reviewed by Dr. Richard Koffler, MD, Board Certified Physiatrist
The marijuana industry in the U.S. is growing despite the continued federal ban on cannabis. Several states allow medical marijuana usage through tightly controlled programs that bring health and renewed hope to patients. The industry itself is also bringing financial prosperity to regions of the country where the economy has been flat for years.
Existing somewhere between manufacturing and pharmaceutical, the expanding use of medical marijuana is spurring the development of a new industry. Cannabis production requires a collaboration of medical science and agriculture to isolate certain elements of the plant and combine them in hybrids to medical specifications.
Processing and dosing, as well as distribution, require the application of several more techniques including warehousing and logistics. Add the legal guidance required to operate a marijuana business within the newly minted laws of various states, and you can see how the marijuana industry has a positive effect on the labor market and business climate across the country.
A study recently published by Marijuana Business Daily attempts to analyze the economic impact of the marijuana industry on women and minorities. The findings of the study are an interesting reflection on the U.S. business environment, as well as how scientific innovation trickles down to various subgroups in our society.
Women in Cannabis
To properly gage the impact of the marijuana industry on women, the study looked at the number of female executives in marijuana-related businesses. A large portion of the money in any industry ends up with the executives, and the study looked at whether women were getting an equal share. Power and responsibility also come with those executive jobs.
At 27%, the number of executive positions in the cannabis industry held by women is slightly higher than the average in all other U.S. industries combined. Still, this average is down from 36% in 2015. Indications are there is some movement of male executives from traditional industries into the marijuana world. The negative stereotype of the marijuana industry is beginning to soften, and traditional male executives are beginning to see the industry as a viable option for career opportunities.
When considering the ancillary businesses to the marijuana industry, the statistics are much different. Almost half of the executive and leadership positions in companies that are ancillary to marijuana production are held by women. The only ancillary area where this isn’t true is in marijuana investment firms. Only 10% of those investment firms are led by female executives.
Companies that provide ancillary services to the marijuana industry are relatively easy to start — and they’re dominated by women. There are no licenses required because there’s no contact with the cannabis plant. The amount of start-up capital required for most of these firms is small, and many of these fields were already dominated by female ownership before the cannabis business was established.
Men are also starting ancillary businesses to service the marijuana industry, and they’re growing slightly faster. Only 40% of female-owned businesses servicing the marijuana industry are poised to expand in the next year, while 43% of their male counterparts are planning to reach new markets in the coming year.
Cannabis Industry Minorities
Tracking the number and importance of positions held by minorities in any industry is an indication of how that industry contributes to the overall economy. Like women, minorities tend to be under-represented at the top of most industries and generally hold lower-paying positions with less responsibilities. The marijuana industry is somewhat different.
It’s commonly understood that the war on drugs is disproportionally devastating to minorities in the U.S. They tend to be heavily represented in the low-income communities where drug abuse is more wide spread. Many people feel minorities are often the subject of profiling in law enforcement, particularly when they’re incarcerated more often and for longer sentences than white people with the same or similar drug charges.
The cannabis industry is having a positive impact on minorities when it comes to employment. Approximately 17% of executive positions in the industry are held by minorities. On average, only 13% of leadership positions in all other industries are held by minorities. The marijuana industry seems to present a slight advantage for minorities over other fields.
When it comes to female minorities, the cannabis industry presents a slight advantage overall. The number of female minorities in executive positions in the industry is just over 5%. The national average in all other industries is only 4.5%.
Business owners in the marijuana industry are more diverse than in other fields. Almost 20% of the business owners and founders in the industry are minorities. Women and minorities are becoming leaders on the cannabis industry and founding businesses that are ancillary to marijuana production.
Of the minority sectors studied, Asians have the smallest representation in executive or owner positions. Most of the minority groups are more engaged in the leadership of companies that supplement the marijuana industry rather than plant-touching businesses. By comparison, there are almost an equal number of whites in executive positions in hand-on cannabis businesses as there are in companies that provide ancillary services to the marijuana industry.
Impact of Marijuana Industry on Women and Minorities
Based on the results of this recent study, the marijuana industry represents hope for women and minorities to gain more prominent roles in business. Women and minorities are both more likely to obtain a leadership position in a company servicing the marijuana industry than other traditional fields.
The industry is growing quickly, and that also presents good news to women and minorities in the workforce. There will continue to be more opportunities in years to come while the cannabis industry continues to develop. Ancillary businesses to the marijuana industry are where women and minorities have the greatest impact on the industry right now — and there is certainly room for growth in the cultivation sector of the cannabis industry.
Already, male executives are leaving other industries to work in marijuana production. If this migration continues, we may, unfortunately, see the average number of female executives in the cannabis industry drop, keeping pace with all other industries.