Racial and gender diversity in the marijuana industry "is still lacking — especially in ownership and executive positions," according to MJBizDaily Research Editor Eli McVey.
While the industry has taken steps to improve, more is required from it, McVey noted.
With the national spotlight currently focused more intently on civil justice reform, changes could be on the horizon.
Minority business leaders say there are significant barriers in critical institutions that keep many from becoming significant players in the space.
Mark Slaugh, CEO of regtech company iComply, told Benzinga he feels he’s made a mark in the industry since launching in 2011 and can stand on his credentials. However, the power structures in place created a negative experience for him and other minorities in the space.
"Being a minority in cannabis, in Colorado, has not been the most positive experience and is quite isolating when I can literally count the number of minority cannabis business owners that I know on one hand," Slaugh said.
The CEO also reported instances where his attempts at collaboration have been dismissed, while also being targeted for hostile takeovers.
"I've never been offered investment, strategic partnerships, or a buyout that didn't try to take advantage of what I've built and hijack it for the purposes of privilege," he said. "While no one has been overtly racist, there seems to be a sense of elitism among a select few who are culturally different than myself."
Barriers exist in financial institutions as well.
Marie Montmarquet is a 13-year industry veteran and co-founder of MD Numbers Inc., a brand with a line of vertically integrated cannabis companies.
There is no blueprint for industry success in the nascent market, Montmarquet explained. However, minorities often face additional challenges due to a lack of capital and real estate.
“Most minorities do not have access to bank lending, lines of credit or other loan opportunities," Montmarquet said, citing how the issue spans across all industries.
The co-founder says she had been denied property and banking during most of her cannabis career.
Dhaval Shah, CEO of Lullaby Wellness, echoed similar sentiments, noting a lack of investment in minority ventures.
“Investors just aren't backing enough minority-owned businesses, and you see it everywhere," Shah said.
More To Be Done
There were respondents who reported feeling welcome in the space.
"The cannabis community has largely welcomed me with open arms,” said Rob Mejia, founder of the cannabis education platform Our Community Harvest and adjunct cannabis professor at Stockton University. “There is a feeling of excitement for the future, and I’ve been surprised by the amount of expertise and connections I’ve been able to access."
Still, there are oversights stemming from the failed drug war, says iComply's Slaugh.
"The cannabis community has to understand the impact of the war on drugs on Black and other communities most affected," he said. "Cannabis legalization is accelerating, yet the people most impacted by its prohibition are being denied access to a multi-billion dollar market and the opportunity to create generational wealth legally."
The CEO, who said many people like him grew up with families broken by marijuana-based prison sentences, said minority owners need more access to begin creating a level marketplace.
"Without access to education in legal market opportunities, investment and capital, and resources to run a cannabis business effectively, we are being marginalized to MSO companies and white wealth taking what we built," he added.
Others emphasized that having representation in all aspects of the market, from billboards to the boardroom, is required.
Martine Francis Pierre, a growth and marketing strategist, is a recent entrant to the sector. While building her marketing brand and establishing a hub for Black-owned businesses, she noted how numerous companies lack diversity in its leadership.
"Within weeks, I realized that the big issue so many of these major cannabis brands had came to being inclusive across the board," Francis Pierre said. "We're talking about corporate offices, but even more so when you scroll through Instagram or going through billboards. You do not see Black or brown faces."
Many respondents called for states to revise their cannabis programs, overhaul their licensing processes, and vet social equity programs to determine their actual impact on affected communities.
"The silver lining in the industry is that these points are being heard by local governments and, more importantly, entire states," noted iComply's Slaugh, who wants to see more people of color being educated on the market opportunity while receiving adequate assistance as their company develops.
“It’s simply not enough to provide the opportunity without the engagement of the people most impacted by the mistakes and detriments of the past," Slaugh said.
Montmarquet hopes to see more minority owners in the space as well. The co-founder noted that those entrepreneurs must be ready for the seemingly ever-changing cannabis industry landscape.
Montmarquet also offered some advice to business hopefuls.
“Educate yourself as much as you possibly can,” she said. “If you have researched the laws, permit process, regulations, costs, taxes etcetera, for the area you want to operate in, that will allow you to make decisions more confidently and faster.”
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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